Determining the Optimal Selling Time of Cattle: A Stochastic Dynamic Programming Approach

Susana Mejía () and Andrés Ramírez Hassan ()

No 13679, Documentos de Trabajo de Valor Público from Universidad EAFIT

Abstract: The world meat market demands competitiveness and optimal livestock replacement decisions can help to achieve this goal. We introduce a novel discrete stochastic dynamic programming framework to support a manager’s decision-making process of whether to sell or keep fattening animals in the beef sector. In particular, our proposal uses a non-convex value function, combining both economic and biological variables, and involving uncertainty with regard to price fluctuations. Our methodology is very general, so practitioners can apply it in different regions around the world. We illustrate the model’s convenience with an empirical application, finding that our methodology generates better results than actions based on empirical experience.

Keywords: Decision Analysis; Farm Management; Simulation. (search for similar items in EconPapers)
JEL-codes: C51 C61 Q12 (search for similar items in EconPapers)
Pages: 22
Date: 2015-07-09
New Economics Papers: this item is included in nep-dge and nep-ore
References: Add references at CitEc
Citations:

Downloads: (external link)
https://repository.eafit.edu.co/handle/10784/7349#.VetHmJ1Vikp

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000122:013679

Access Statistics for this paper

More papers in Documentos de Trabajo de Valor Público from Universidad EAFIT Contact information at EDIRC.
Bibliographic data for series maintained by Valor Público EAFIT - Centro de estudios e incidencia ().