Production, marketing, and financial decision making in a dynamic and stochastic environment /
Production and marketing decisions from value-added
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| Format: | Thesis Book |
| Language: | English |
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[Place of publication not identified] :
[publisher not identified] ;
1994.
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| Subjects: | |
| Online Access: | http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=741945551&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Summary: | Production and marketing decisions from value-added production processes and the management of financial structure are modeled in a dynamic and stochastic framework. First, the optimal production and marketing decisions for a representive nursery operation producing ornamental plants from container-based production systems are determined and factors influencing the decisions are analyzed. A stochastic dynamic programming model is developed to capture the existence of a value-added serial-stage production process with multiple products and intrayear dynamics. The results suggest three-gallon production is generally preferred to one-gallon production because of the price premiums associated with three-gallon production. Further, taxes play an important role in determining the optimal production and marketing decisions while discounting plays a minor role. Markovian analysis indicates the transition probability matrices are periodic making long ran generalizations of the decision process difficult. The specified production process is determined to be the cause of the periodicity. Second, the optimal level of debt capital for risk averse sole proprietors operating in a dynamic and stochastic environment is investigated. Using stochastic optimal control theory, a series of models are developed, analytically solved, and the control and state time paths simulated. The results indicate the importance of including a motive for bequest and choosing the appropriate type of relative risk aversion in accurately characterizing the dynamic behavior of the state and control paths. Additionally, because wealth changes are endogenized in the specified models, it is determined the Pratt definition of risk aversion is no longer a single argument function with a spatial interpretation. Contrary to the literature, a changing relative risk aversion model specification can capture the empirical regularity of a concave time path of debt use. |
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| Item Description: | Vita. "Major Subject: Agricultural Economics". |
| Physical Description: | viii, 130 leaves : illustrations ; 28 cm. Issued also on microfiche from University Microfilms Inc. |
| Bibliography: | Includes bibliographical references. |