An Empirical Approach for Optimizing the Production Structure of a Farm Using the Linear Programming Model

Leonida Emilia Baciu, Vincentiu Veres, Maria Mortan and Angela-Eliza Micu
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Leonida Emilia Baciu: Babes-Bolyai University of Cluj-Napoca, Faculty of Economics and Business Administration, Cluj-Napoca, Romania
Vincentiu Veres: Babes-Bolyai University of Cluj-Napoca, Faculty of Economics and Business Administration, Cluj-Napoca, Romania
Maria Mortan: Babes-Bolyai University of Cluj-Napoca, Faculty of Economics and Business Administration, Cluj-Napoca, Romania
Angela-Eliza Micu: Ovidius University of Constanta, Romania

Economics and Applied Informatics, 2023, issue 3, 87-94

Abstract: The production structure of farms has a great importance in the context of Romania where there are many mixed farms and most of them have problems of economic viability. Optimization of the production structure is essential in ensuring the viability of farms therefore our study focuses on applying the model of linear programming for the optimization of the production structure. The model was applied to a case study where the optimization was performed from different perspectives by using various economic indicators such as the standard output, gross margin, profit per hectare and production costs. The results have shown that the optimal structure differs depending on the farms’ medium and long-term objectives. As a result of the analysis for the proposed scenarios, to increase the efficiency, the use of the category of youth under 1 year old must be abandoned and the cattle for meat category should be developed. Gross margin was found to be the most suitable indicator depending on which the optimal production structure should be modeled.

Keywords: gross margin; production structure; optimization; farm structure (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2023:i:3:p:87-94

DOI: 10.35219/eai15840409366

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