IDEAS home Printed from https://ideas.repec.org/a/ags/ajaeau/22812.html
   My bibliography  Save this article

Capital Budgeting, Intertemporal Programming Models, With Particular Reference To Agriculture

Author

Listed:
  • Rae, Allan N.

Abstract

Investment decision processes typically involve the selection of projects, the timing of their initiation and the determination of the amount to be invested in each time period. A linear programming model considered appropriate for solving such models is described, in which the multi-dimensional criterion function is expressed as a linear combination of the appropriately-weighted objectives. An empirical application is then discussed, the objectives of the firm being the maximization of tax-free cash and assets on hand at the end of the planning period. Finally, the appropriate length of the planning horizon, and some approaches to capital budgeting under non-certainty, are discussed.

Suggested Citation

  • Rae, Allan N., 1970. "Capital Budgeting, Intertemporal Programming Models, With Particular Reference To Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 14(1), pages 1-14, June.
    • Handle: RePEc:ags:ajaeau:22812
    DOI: 10.22004/ag.econ.22812
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/22812/files/14010039.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.22812?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. S. R. Johnson & K. R. Tefertiller & D. S. Moore, 1967. "Stochastic Linear Programming and Feasibility Problems in Farm Growth Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 49(4), pages 908-919.
    2. Laurel D. Loftsgard & Earl O. Heady, 1959. "Application of Dynamic Programming Models for Optimum Farm and Home Plans," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 41(1), pages 51-62.
    3. Gerald W. Dean & Michele De Benedictis, 1964. "A Model of Economic Development for Peasant Farms in Southern Italy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 46(2), pages 295-312.
    4. Pinhas Zusman & Amotz Amiad, 1965. "Simulation: A Tool for Farm Planning under Conditions of Weather Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 574-594.
    5. Kalman J. Cohen & Edwin J. Elton, 1967. "Inter-Temporal Portfolio Analysis Based on Simulation of Joint Returns," Management Science, INFORMS, vol. 14(1), pages 5-18, September.
    6. K. D. Cocks, 1968. "Discrete Stochastic Programming," Management Science, INFORMS, vol. 15(1), pages 72-79, September.
    7. William C. Merrill, 1965. "Alternative Programming Models Involving Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 595-610.
    8. Wilfred Candler, 1960. "Reflections on "Dynamic Programming Models"," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 42(4), pages 920-926.
    9. K. D. Cocks & H. O. Carter, 1968. "Micro Goal Functions and Economic Planning," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 50(2), pages 400-411.
    10. Dale Colyer, 1968. "A Capital Budgeting, Mixed Integer, Temporal Programming Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 16(1), pages 1-7, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nuthall, Peter L., 1980. "A Survey of Methods for Determining A Planning Horizon," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 48(01), pages 1-15, April.
    2. Mallawaarachchi, Thilak & Hall, Nigel H. & Phillips, Brian, 1992. "Investment in Water Saving Technology on Horticultural Farms," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(02-1), pages 1-14, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Baker, C.B. & Barry, Peter J. & Lee, Warren F. & Olson, Carl E. & Hochman, Eithan & Rausser, Gordon S. & Kottke, Marvin W., 1977. "Economic Growth of the Agricultural Firm," Western Region Archives 260636, Western Region - Western Extension Directors Association (WEDA).
    2. McInerney, J. P., 1971. "Development in planning techniques with a practical potential in the 1970's - other developments," International Farm Management Association Congress Archive 330454, International Farm Management Association.
    3. Jensen, Harald R., 1977. "PART I. Farm Management and Production Economics, 1946-70," AAEA Monographs, Agricultural and Applied Economics Association, number 337213, january.
    4. Hansen, B.R. & Oborne, G.T., 1985. "Redevelopment of fruit blocks in the riverland region: An intertemporal programming approach," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 27(2), pages 211-222.
    5. Renborg, Ulf, 1970. "Growth of the Agricultural Firm: Problems and Theories," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 38(02), pages 1-51, June.
    6. McCarl, Bruce A., 1986. "Innovations In Programming Techniques For Risk Analysis," Regional Research Projects > 1986: S-180 Annual Meeting, March 23-26, 1986, Tampa, Florida 271825, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    7. Kaiser, Harry M., 1988. "Simultaneous Production And Marketing Decisions Over Time: Discussion," Regional Research Projects > 1988: S-180 Annual Meeting, March 20-23, 1988, Savannah, Georgia 272841, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    8. Giardini, Giovanni, 1992. "The reform of the agricultural policy in the European Economic Community: an Italian farm simulation study," ISU General Staff Papers 1992010108000017587, Iowa State University, Department of Economics.
    9. Anderson, Jock R., 1972. "An Overview of Modelling in Agricultural Management," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(03), pages 1-12, September.
    10. Shrestha, Chandra M. & Debertin, David L. & Anschel, Kurt R., 1987. "On the Use of Alternative Objective Functions in Multiperiod Programming Models," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 269983, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Barry, P. J., 1971. "Financial Analysis of Expansion Alternatives for Cash Grain Farms in Ontario," Working Papers 244671, University of Guelph, Department of Food, Agricultural and Resource Economics.
    12. Marshall, Graham R. & Jones, Randall E. & Wall, Lisa M., 1997. "Tactical Opportunities, Risk Attitude and Choice of Farming Strategy: an Application of the Distribution Method," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(4), pages 1-21.
    13. Horowitz, Uri, 1974. "A dynamic model integrating demand and supply relationships for agricultural water, applied to determining optimal intertemporal allocation of water in a regional water project," ISU General Staff Papers 197401010800006990, Iowa State University, Department of Economics.
    14. Timothy J. Lowe & Paul V. Preckel, 2004. "Decision Technologies for Agribusiness Problems: A Brief Review of Selected Literature and a Call for Research," Manufacturing & Service Operations Management, INFORMS, vol. 6(3), pages 201-208.
    15. King, Robert P. & Robison, Lindon J., 1980. "Implementing Stochastic Dominance With Respect To A Function," Risk Analysis in Agriculture: Research and Educational Developments, January 16-18, 1980, Tucson, Arizona 271563, Regional Research Projects > W-149: An Economic Evaluation of Managing Market Risks in Agriculture.
    16. Williams, R. Lynn & Dillion, Carl R. & McCarl, Bruce A., 1992. "An Economic Investigation of Edwards Aquifer Water Use Tradeoffs," WAEA/ WFEA Conference Archive (1929-1995) 321395, Western Agricultural Economics Association.
    17. Trebeck, David B. & Hardaker, J. Brian, 1972. "The Integrated Use Of Simulation And Stochastic Programming For Whole Farm Planning Under Risk," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 16(2), pages 1-12, August.
    18. Acs, Szvetlana & Berentsen, Paul B.M. & Huirne, Ruud & van Asseldonk, Marcel, 2009. "Effect of yield and price risk on conversion from conventional to organic farming," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(3), pages 1-19.
    19. Sporleder, Thomas L., 1972. "Temperature Probabilities and the Bayesian No Data' Problem," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 4(1), pages 113-117, July.
    20. Lambert, David K. & McCarl, Bruce A. & He, Quifen & Kaylen, Michael S. & Rosenthal, Wesley & Chang, Ching-Cheng & Nayda, W.I., 1995. "Uncertain Yields In Sectoral Welfare Analysis: An Application To Global Warming," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(2), pages 1-14, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ajaeau:22812. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.