Using market intelligence for the opportunistic shipping of fresh produce

Hector Flores and J. Rene Villalobos

International Journal of Production Economics, 2013, vol. 142, issue 1, 89-97

Abstract: The main goal of this paper is to develop an opportunistic shipment policy that increases a farmer's commercialization reach within a secondary market with minimal or no capital investment, once a base market has been established. Basically, the operation would consist of sending fresh produce items into a secondary market (from the base) whenever momentary price differentials allows two-market transactions with a high probability of profit. A theoretical model is developed that maximizes potential operational revenues based on arbitrage opportunities existent within two-market structures. Ultimately, the validity and applicability of this model is demonstrated through the application of a case-study. The results of the case-study show that using the decision-making strategy defined by the proposed theoretical model cannot only increase the long-term profits of two-market operations but can also lower the profit variability, in comparison to only commercializing in a single base market.

Keywords: Opportunistic shipments; Fresh produce; Market integration; Perishable commodities; Agricultural marketing (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:142:y:2013:i:1:p:89-97

DOI: 10.1016/j.ijpe.2012.10.012

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