A Truncated Maximin Approach to Farm Planning under Uncertainty with Discrete Probability Distributions

Yoshihiro Maruyama

American Journal of Agricultural Economics, 1972, vol. 54, issue 2, 192-200

Abstract: A method is presented for solving linear programming problems under the assumption that input-output, restraint, and functional coefficients follow a discrete joint probability distribution. This may be a rather plausible assumption in some uncertain farm planning contexts. The objective function is formulated in terms of variance and/or expectation. Special attention is given to the most adverse outcomes with respect to both the functional value and side constraints. Parametric analysis can be used to determine trade-offs among the functional value, the adversity level, the tolerance probability, and the probability of infeasibility. Finally, the proposed method is applied to a farm problem.

Date: 1972
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:54:y:1972:i:2:p:192-200.

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