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AN ALTERNATIVE SOLUTION TO LINEAR PROGRAMMING PROBLEMS WITH STOCHASTIC INPUT‐OUTPUT COEFFICIENTS
Author(s) -
Wicks John A.,
Guise John W.B.
Publication year - 1978
Publication title -
australian journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 0004-9395
DOI - 10.1111/j.1467-8489.1978.tb00342.x
Subject(s) - stochastic programming , linear programming , mathematical optimization , stochastic optimization , stochastic modelling , mathematics , computer science , stochastic process , function (biology) , statistics , evolutionary biology , biology
Deriving acceptable farm plans where input‐output coefficients are stochastic is a complex problem. Previous formulations have required many simplifying assumptions about the stochastic variables in the analysis. This paper presents an alternative approach based on the mean absolute deviation, which permits solution by a conventional linear programming algorithm whilst avoiding some of those assumptions previously required. The formulation also incorporates a stochastic objective function. Examples are provided using the situation of stochastic feed supply with reference to representative sheep‐grain farms on the Northern Tablelands of New South Wales. Results from these suggest that this alternative approach is a distinct improvement on earlier stochastic formulations which utilize linear programming algorithms.