Integrated Optimization of Procurement, Processing and Trade of Commodities in a Network Environment

We consider the integrated optimization problem of procurement, processing and trade of commodities over a network in a multiperiod setting. Motivated by the operations of a prominent commodity processing firm, we model a firm that operates a star network with multiple locations at which it can procure an input commodity and has processing capacity at a central location to convert the input into a processed commodity. The processed commodity is sold using forward contracts, while the input itself can be traded at the end of the horizon. We show that the single-node version of this problem can be solved optimally when the procurement cost for the input is piecewise linear and convex, and derive closed form expressions for the marginal value of input and output inventory. However, these marginal values are hard to compute because of high dimensionality of the state space and we develop an efficient heuristic to compute approximate marginal values. We also show that the star network problem can be approximated as an equivalent single node problem and propose heuristics for solving the network problem. We conduct numerical studies to evaluate the performance of both the single node and network heuristics. We find that the single node heuristics are near-optimal, capturing close to 90% of the value of an upper bound on the optimal expected profits. Approximating the star network by a single node is effective, with the gap between the heuristic and upper bound ranging from 7% to 14% for longer planning horizonshttp://deepblue.lib.umich.edu/bitstream/2027.42/55417/1/1095-Anupindi.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/55417/4/1095-Anupindi_2010.pd

PROCUREMENT STRATEGIES: IMPACTS OF QUALITY RISKS IN HARD WHEAT

Analytical models were developed in this paper to evaluate cost/risk tradeoffs of three alternative procurement strategies in the case of hard red spring (HRS) wheat. Results indicate a naive strategy has the lowest expected cost, but a high probability of not conforming to end-use requirements. Two alternative specifications for the constant share strategy result in higher probabilities of meeting requirements, but at higher costs. The opportunistic strategy results in a higher probability of meeting requirements than either of the other two alternative strategies at a comparable cost.Crop Production/Industries,

E-COMMERCE IN AGRICULTURE: DEVELOPMENT, STRATEGY, AND MARKET IMPLICATIONS

Marketing,

Continuity and change: land and water use reforms in rural Uzbekistan. Socio-economic and legal analyses for the region Khorezm

Decades of Soviet rule have left a heritage of environmental and social problems in Central Asia. The demise of an entire ecosystem at unprecedented pace, the 'Aral Sea Syndrome', is the most prominent of the undesired outcomes of the focus on agricultural production that has dominated land and resource use and continues till today. The international outcry over this ecological crisis has delegated other - and maybe more urgent - problems to a second pane. Rural livelihoods are rapidly deteriorating, unemployment is high, and rural poverty widespread. Ecological aspects, although strongly affecting everyday life in rural areas - such as water and soil salinity and environmental pollution - are not the fore most concern to the local population, as the economic survival is the more pressing need. Nevertheless, it is exactly in this situation where the larger part of the population exploits the natural resources further rather than preserving the ecological basis as a natural means of the local land’s productivity. Table of contents: Preface and acknowledgements; Peter Wehrheim, Anja Schoeller-Schletter, Christopher Martius. Chapter 1: Farmers, cotton, water, and models - Introduction and overview; Peter Wehrheim, Christopher Martius. Chapter 2: Organizing agricultural production - Law and legal forms in transition; Anja Schoeller-Schletter. Chapter 3: A model-based analysis of land and water use reforms in Khorezm: Effects on different types of agricultural producers; Nodir Djanibekov. Chapter 4: Optimal crop allocation and consequent ecological benefits in large scale (shirkat) farms in Uzbekistan's transition process; Ihtiyor Bobojonov, Inna Rudenko, John P. A. Lamers. Chapter 5: Where has all the water gone? Marc Müller. Chapter 6: Analysis of water use and allocation for the Khorezm region in Uzbekistan using an integrated economic-hydrologic model; Tina Schieder, Ximing Cai. Chapter 7: Problems and perspectives of water user associations in Uzbekistan; Darya Hirsch (Zavgorodnyaya). Chapter 8: Barriers to technological change and agrarian reform in Khorezm, Uzbekistan; Caleb Wall. Chapter 9: Analysis of agricultural markets in Khorezm, Uzbekistan; Ihtiyor Bobojonov, John P. A. Lamers. Chapter 10: Cotton, agriculture, and the Uzbek government; Marc Müller --

Achieving food security in a cost effective way

"This study evaluates the domestic and international trade and marketing policies in India and analyzes the effects of deregulating domestic markets and liberalizing external trade on the food grain sector. Historically, India's food policy has involved heavy government intervention in all aspects of the food grain market pricing, procurement, stocking, transport and marketing. The Food Corporation of India (FCI) is the principal parastatal agency responsible for marketing food grains within the country and controls nearly 50 percent of the grain markets. An analysis of the performance of the FCI, however, reveals enormous and mounting costs of operations that present a huge financial burden for the Government of India (GOI). This study offers a comparison of the costs and functioning of the FCI with that of private traders, in order to suggest policy options for reform. The results show that private traders operate at costs lower than those incurred by the FCI in both storage and trade, despite several controls and restrictions imposed upon them. Therefore, the finding from this study is that there is a strong case for reform from the efficiency point of view." From Author's Executive Summary

The development of a conceptual rural logistics system model to improve products distribution in Indonesia

Purpose: The role of speculators in distributing products across rural areas is increasing the poverty rate in Indonesia. Therefore, this study aims to develop a conceptual framework of the rural logistics system model to influence the welfare and sustainability of farmers. Design/methodology/approach: Conceptual framework was used to evaluate logistics and supply chain networks. The method consists of developing stages based on four components, namely network structure, management, resources, and business processes. Furthermore, it also proposed the management function of the rural logistics system models. Findings: The model of a rural logistics system obtained in this study consists of 1) a trade related to the network of business, 2) a freight, related to the flow of goods, and 3) management functions related to crucial activities in rural logistics management. Research limitations/implications: This model is conceptual, therefore, future studies must accommodate optimizing models to predict the performance of rural logistics systems when they are applied in Indonesia. Practical implications: This study promotes the actors in intermediaries of the rural logistics system to synergize the distribution of goods effectively and efficiently. It also reduces the role of speculators in product distribution in form of availability and price in rural areas. Social implications: This model is a strategy to achieve the Rural Sustainable development Goals (Rural-SDGs) agenda and complements the Blueprint of The National Logistics System. Originality/value: There are fewer studies in rural logistics compared to other fields such as agricultural logistics, food logistics, disaster logistics, etc. Therefore, this study organizes the actors in the rural logistics network and plans management functions for the efficient distribution of products across Indonesia. It also raises the awareness of logistics management to improve the welfare of rural communitiesPeer Reviewe

Impacts of agricultural trade and market liberalization of food security in developing countries: comparative study of Kenya and Zambia

The introduction of agricultural reforms has debatable effects on food security in developing countries. This research investigates how such effects influenced maize supply in two developing countries which were among the first to introduce agricultural reforms. Conclusions from the research suggest that agricultural reforms led to mixed results. This may be attributed to the sometimes stop-go nature of reform implementation. The mixed results are reflected in the weak maize output response to price changes. Overall country economic conditions, state of agricultural development can be attributed to the pace of response, hence effect on agricultural supply. Elasticity of maize output to changes in price and acreage are strongly significant in maize output for the case of Kenya. Both restricted models of maize production suggest that prior to the introduction of reforms acreage, prices and alternative crops were more elastic when simulated with Zambian data than with Kenyan data.food security, agricultural reforms, elasticity of supply, International Relations/Trade,

Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks

The global food sector faces extraordinary risks from the twin challenges of water scarcity and water pollution. Growing competition for water, combined with weak regulations, failing infrastructure, pollution and climate change impacts threaten the sector's water security and contribute to a water availability emergency that was recently ranked the world's "top global risk" by the World Economic Forum.This report examines how water risks affect the profitability and competitive positioning of 37 major food sector companies in four industries: packaged food, beverage, meat and agricultural products. It evaluates and ranks these companies -- the majority of which are U.S. domiciled and publicly-traded -- on how well they are positioned to anticipate and mitigate these risks, as well as contribute to improved water resource management.The report provides recommendations for how analysts and investors can effectively evaluate food sector companies on their water risk exposure and management practices. It also provides recommendations for how food companies can improve water efficiency and water quality across their operations and supply chains to reduce risks and protect water resources

Russia’s Chemical and Petrochemical Industries at the Eve of WTO-Accession

Although Russia’s WTO-accession is foreseeable, there are still deficits in the literature on its concrete effects on the sectoral and regional levels. In this paper we analyse effects on Russia’s chemical and petrochemical sectors (CPS), which are, unlike for example its oil and mineral gas industry, rarely in the focus of public attention. On the basis of an extensive examination of these sectors’ current condition, we expect serious problems for them to emerge in the nearer future, the perhaps most serious and most puzzling problem being under-investment. Our analysis is based on data provided by GOSKOM-STAT/ROSSTAT, Russia’s official statistics institute. The authors like to thank Henning P. Jørgensen for valuable comments on an ear-lier version of the paper.Russia, chemical and petrochemical industries, WTO

The economic and environmental factors of water in arid regions: Study of the rural water use in Northern Darfur Region, Sudan

We develop hypothetical policy scenarios in this part of the paper which are simulated using a product-by-industry economic-ecological model to investigate their impacts on water and other ecological commodities. Results are expected to contribute to the establishment of alternative policy options for water resources management and sustainable economic development in the area. The impact of economic development on the environment is now a global issue and cannot be ignored. However, the extent of these impacts at local and regional levels in less developed countries (LDCs) is not fully understood. Unlike the rich industrialized countries where development is large-scale and the impacts associated with immense consumption of fossil fuels are basically in the form of environmental pollution, development in the LDCs is rather at a small-scale and the nature of impacts is often in the form of severe resource depletion (World Bank, 1992; Lesser, et al., 1997). Therefore, the challenge of sustainable development in these poor countries is an urgent matter of concern (WRI, 1992). This concern can be investigated from two perspectives, economic development and environmental degradation.Arid, Regions, Water Scarcity, Sudan, Darfur, Input Output, Economics, Environmental Factors