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A Sequential Programming Model of Growth and Capital Accumulation of a Farm under Uncertainty
Author(s) -
Yaron D.,
Horowitz U.
Publication year - 1972
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1239160
Subject(s) - curse of dimensionality , production (economics) , linear programming , bankruptcy , dual (grammatical number) , computer science , extension (predicate logic) , investment (military) , time horizon , horizon , capital (architecture) , state (computer science) , economics , mathematical optimization , operations research , microeconomics , mathematics , artificial intelligence , algorithm , finance , art , geometry , literature , politics , law , political science , programming language , archaeology , history
Advantages of the sequential approach to making decisions under uncertainty are well known. However, the relatively detailed analysis involved, when applied to empirical problems, faces the “cure of dimensionality.” In 1955 Dantzig offered a model of sequential programming under uncertainty which combined the merits of linear programming and sequential analysis. This paper presents an extension of Dantzig's model intended to reduce the dimensionality difficulty by introducing the distinction between long‐run (primarily investment) and short‐run (current production) planning. This paper also includes treatment of uncertainty in terms of eliminating plans which may lead to severe failures (bankruptcy) at any sequentially conceiveable state over the planning horizon.