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SIMULATION MODELS FOR THE SPECIFICATION OF FARM INVESTMENT PLANS
Author(s) -
Dalton G. E.
Publication year - 1971
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1971.tb01727.x
Subject(s) - investment (military) , task (project management) , capital investment , process (computing) , computer science , capital budgeting , simulation modeling , operations research , action (physics) , agriculture , capital (architecture) , economics , risk analysis (engineering) , microeconomics , business , engineering , finance , project appraisal , management , physics , archaeology , quantum mechanics , politics , political science , law , operating system , history , ecology , biology
The implicit assumption of the methods currently advocated for the appraisal of investment plans on farms is that the main task is to choose the “best” course of action given a number of alternatives. The specification of these alternatives is a difficult task since there are many ways of performing farm operations because of the heterogeneity of fixed capital. It is proposed in this paper that investment opportunities may become more apparent by building simulation models of existing farming systems. Such models, it is claimed, should assist in identifying points where improvements can be made. The process of harvesting grain on U.K. farms is used to illustrate the suggestion. Some problems of using the simulation technique are also discussed.