Copyright is owned by the Author of the thesis. Permission is given for
a copy to be downloaded by an individual for the purpose of research and
private study only. The thesis may not be reproduced elsewhere without
the permission of the Author.
APPLICATIONS OF MATHEMATICAL PROGRAMMING
ON FOUR NEW ZEALAND HORTICULTURAL HOLDINGS
by
.1-,.N. RAE
Thesis Presented in Partial Fulfilment of the Requirements for the Degree
of
Master of Horticultural Science in
Massey University
November
1968
ACKN OVJLEDG EM ENT S
The author wishes to thank his two supervisors, Professor W.V.
Candler and his successor, Professor A.R. Frampton, for their advice and encouragement received during this study. Special thanks are due to Professor Candler who obtained a solution to the quadratic
programming study of Chapter 5 at Purdue University, Indiana, U.S.A.
But for a lack of time a solution to the quadratic programme of Chapter
6
would have been obtained from the same source.The author also wishes to express his thanks to the four
horticulturalists who willingly gave of their time to allow the various programming models to be constructed.
Thanks are due to tiesdames J . Bishop and .M. Clifford for typing, and to the library staff for their assistance in obtaining references.
Finally, thanks are due to members of the Horticulture Depart- ment, Massey University, with whom the author had discussions from
time to time.
CH.Ai=-T.iR 1 1. 1 1. 2 1-3
1. 4
CH .• .r-T.,.,..R 2 2 .1
CONTENTS
INTRODUCTION ~ND TH~ciIS CUTLINE
Introduction
Objectives of the 0tudy The Approach to the Study
Some Co[r1mon Criticisms of Nathematical Programming for .ortl culture
1. 4 .1 1.4.2
1.4.4
Problems of price and yield variability Methods of overcoming price aad yield
variability
The problem of lack of farm records Problems ~eculiar to process vegetable
production An Outline of the Thesis
A DESCRirTION OF LINE2.R .-,.ND ,tUADR .... TIC i-ROGR,-Jv.'.MING
Linear frogramming 2.1.1
2.1.2 2.1.2.1 2.1.2.2 2.1.2.3 2.1.2.4 2.1.2.5 2.1. 3
2.1. 4
2.1.5 2.1 .. 6
2.1 . 7
2.1.8 2.1.9 2.1.10
Introduction The assum_ptions
The linearity assumpti on The additivity assumption The non-negativity assumftion Single-value expectations The convexity assum~tion The objective function The a cti vi ties
The restraints
The non-negativity requirement
A summary of the linear programme problem Disposal activities
The valuation of resources
Linear programme solutions and their interpretation
Page 1 1 2- 3
4 4
4
5
6 6
8
88
9 9 9 10 10 10 11 11 12 12 12 12 13
2.1.11 Sensitivity analysis 15
2.1.11.1 Stability of the optimum plan to price
changes 15
2.1.11.2 The limits to which non-basic activities
may enter the basis
16
2.2
2.3
CHAFT:C:R 3
Quadratic rogramming 2.2.1.
2.2.2
2.2.3 2.2.4 2.2.5 2.2.6
2.2.7 2.2.7.1 2.2.7.2 2.2.7.3 2.2.7.4
Introduction
Statement of the quadratic programming problem
The related lagrangian problem The partial derivatives
The related linear programming problem An algorithm for solving quadratic
programming problems
Interpretation of the solution Real activities in the basis Real ~ctivities not in the basis Imputed values of scarce resources Resources in disposal
Risk Programming 2.3.1
2.3.2
2.3.3 2.3.4
2.3.5
Introduction
Some examples of stochastic errors in horticultural production data
An outline ofrisk programming A measure of risk
Mathematic_l statement of the risk programming froblem
LIT E:,R l .aOGRnMMING ND PROFIT MAXIMIS.'-.TICN N ,,N GT~.KI HORTICULTUal,L HOLDING
3.1 Introduction
3.2 ~ Descrii tjon oft~~ Holding 3.2.1
3. 2.2 3. 2-3
3.2.4
3. 2. 5 3. 2 . 6
3.2.7
Location s~ze Leased land
Glasshouse area Cropping ~ractice Soil ty}Jes
Rainfall and irrigation Disease problems
3.3 The Restraints 3.3.1
3.3.2
3. 3 . 3
3.3.4
3 . 3 . 5
Problems of timing of production Freehold land (restraints R1-R7) Leased land (restraints R8-R15)
Labour availability (restraints R16-R39) Cropping limits (restraints R40-R52)
19 19 20 22
22 25 25 25 25
25 25 25
27 28
30
32
35 35 35 35 36 36 37 37 39 3'3 40 42
3.4
3,5
The Activities 3.4.1
3,4.2 3.4.3
3.4 . 4 3.4 . 5
3.4.6
3.4 . 7
3.4.8
3.4.9
3.4.10 3.4.11 3.4.12 3.4.13
3.4.14
Production on leased and freehold land Cauliflower (P1)
Cucumber (P2) Tomato (P3) Lettuce (P4)
Pumpkin (P5 and P10) Rhubarb (P6)
Soleil d'Ors (P7) Lettuce (P8)
Carrot (P9) Cucumber ( P11) Cabbage (P12) Cauliflower (P13)
Glasshouse cucumber (P14) The Objection Function
3. 5
.1 3.5.2 3.5.2.1 3.5.2.2 3.5.2.3 3.5.33.5 . 3 .1
3.5.3.2
3.5.4
3.5.4.1 3.5.4,2
3.5.5
Introduction
Calculation of gross margins Expected prices and yields Variable costs
Gross margins
Perennial crops and discounting Present value of rhubarb (P6) Present value of Soleil d'Ors (P7) Calculation of annuities
Rhubarb (P6) annuity Soleil d'Ors (P7) annuity Overhead costs
3.6 Input-Output Coefficients
3.6.1 Freehold land restraints 3.6.2
3.6 . 3 3.6.4 3 . 6.4 . 1 3. 6 . 5
Leased land restraints Labour restraints
Cropping limit restraints The glasshouse r estraint (R52) Dominated restraints
3.7 The Basic Matrix
43 43
44 44 45
46 46 46 46
47
47
47
48
48 48 49 49 50
50 52
52 54 54
56
59 59
60 60 61 61 61 63
65
65 66
66
3 . 8
3. 9
The Solution
68
3. 8. 1 68 3.8. 2 3. 8. 2. 1 3 . 8.2. 2 3. 8. 3 3. 8. 4 3 . 8 . 4. 1 3.8 . 4. 2 3. 8. 5 3. 8. 5. 1 3 . 8.5 . 2 3. 8.5.3
The cropfing programme
Corn_p1rison of the linear programme solution with the grower's plan Comparison of activity levels Com~arison of pr ofits
Stability of the o~timum plan Unused resources
Land Labour
Value of resources Land
Labour
Cropping l imits
68 68
713.8 . 5 . 3 . 1
The tomato cropping limit A Parametric Solution71
73 73 74 75 75
76 76 7777
3.9 . 4
The reason for comfuting al ternative plans
77
Parametric linear programming 77 Activity levels i n the parametric
solution 79
Resource values in the ~arametri c solution 79 Su~~lementary, complementary and
competitive relationships within the
parametric solution
82
3 . 10
Adopti on by the Grower of a Linear rrogramme Solution3.10 . 1 3. 10 . 2 3.10 . 2. 1 3 .1 0 . 2. 2 3. 10 . 2.3 3. 10 . 3 3. 10.3 . 1 3 . 10.3.2 3 . 10.3 . 3 3 . 10 . 4 3 . 10.4 . 1 3.1 0. 4.2
Introduction
Comparison of the adopted plan with the grower's plan
Comparison of activity levels Comparison of profits
Comparison of resource requirements Stability of the adopted plan
Stable components of the plan Unstable components of the plan Crop which may become profitable Unused resources
Land Labour
86
86
88
88
91 9193
9495
95
96
3.10.4 .2.1
Overhead labour3 .1 0 . 4 . 2.2
Replanting ferennial crops Value of resourceG3 .1 1
Increased 1rofits and T&xation3 . 12
Gro,ver 's Comments on the 1 rogramming Solutions3 .12.1 3.12 .2
3 .1 2.4
CH •
.:..1
T....R 4Physical plans
Hesource dis~os&l levels .::>hadov; iJrices
Further com~~nta on .he udo~ted ~lan I:rV.c...3TLc.N1 I:~ f...,..:(t,N1~LiL CRC10 - J. C · • .t IT . .'.,.L BUDG:TIXG , DTE"iT..;:,iFORAL LL~ r:.. R .t-ROG1id.;;'i£
4 . 1
Introduction4. 1 .1 4.1.2 4.1.3
The reason for ~n intertem~oral a~proach Brief review of intertem~oral
pr ogramming in f~rm lll3.nagement An outline of the intertemporal
programming m~trix
4 . 2
De&cription of the Holding4.2 . 1
4.2.2
4 . 2.3 4.2.3 . 1
4.2.4
4 . 2 . 5 4. 2 . 6 4 . 2 . 7
~ocation and size
?re~~nt cro1~ing ~r~ct~ce Future crG;:in6 ~rcctice
Treatment of tre young aprle ~~i
young as¥araguF cror~ ir. the model Intercro.t-·ping
Soil tyres Irrication
Disease 1·0 blems
4 . 3
The Restraint~4.3 .1
4.3.2
4 . 3 . 3
4. 3 .4
4.3.5
4.3 . 6 4 . 3 . 6.1 4. 3 . 6 . 2
4 . 3 . 6 . 4
Land Laoour
CrofS grown under contract for processing
Restrict ions on fresh market crops Rotation restraints
Cash and taxation restr~ints
Treatment of cash flows in the model Tax-free ea 'b avail abJ.e at the
btl!,ir.ni •• g of the development period Net revenue from the young apple and
asparagus crops
idthdrawals of tax-free cash
97 97 98 98 101 101 102 103 105
107 107 107
108
110 110 110 . 112
113
114
114
114115
115115
115 117119
122122
124 124 125126
127
4,3,6.5
Tax-deductible overhead costs128 4. 3.6.6
Total tcix-deductible expenditures129
4. 3.6.7
Taxation limits129
4. 3. 6.8
Summary of cash and taxation restraints131 4. 3. 7
Objective function accounting restraints131
The i cti vi ties
4 . 4.1 4. 4 . 2 4. 4. 3 4. 4.3 . 1 4. 4. 3.2 4 . 4. 3 . 3.
4 . 4. 3 . 4 4. 4. 3. 5 4 . 4 . 3 . 6 4. 4. 3.7 4. 4. 3 . 8 4. 4.3.9 4. 4 . 3 , 10 4. 4 . 4 4. 4. 4.1 4. 4. 4 ..
24. 4 . 5 4. 4. 5.1 4. 4. 5 . 2 4. 4. 6 4. 4. 6. 1 4 . 4 . 6 . 2 4. 4 . 6. 3 4. 4. 6. 4 4 . 4. 7 4. 4 . 8 4. 4 . 8. 1 4. 4 . 8. 2 4. 4 . 9 4. 4 . 10
Introduction
Intercropping activities Annual cropping activities Tomato
Green bean Beetroot Potato
Pea Carrot
Broad bean-kumara Kumara
Mangold Ryegrass
Existing perennial plantings Old as:i;;aragus
Old peach
New plantings of perennials .Asparagus
Apple
Land transfer activities Annual cropl and transfer Asparagus land transfer Peach land transfer Fallow
hCtivities to hire labour
Taxation and tax-deductible expenditures Taxation transfer activities
Tax-deductions transfer Bank activities
Final tax-free cash and final assets Input-Output Coefficients
131
131
132
132
132
133
133
133
134
134
134
134
135
135
135
135
135
136
136
136
137
137
137
137
137
137
138
138
138
139
139
139
4. 6 4. 7 4 . 8
4 . 5. 1 4. 5. 2 4. 5.3 4. 5 . 4 4. 5. 5 4. 5 . 6 4. 5 . 7 4 . 5. 7 . 1 4. 5. 7 . 2 4. 5. 8 4. 5. 8 . 1 4. 5. 8. 2
Introduction Land restraints Labour re~troints
Process era~ reotralnts Fresh market era~ restraints Rotaticn re~triints
Cash &nd taxation reatr~i~t3
Gener~l de~cri~ticn of coefficients Derivation of margin~l t~x r~tts
Objective function accounting reatr~ints General descriftion of coefficients Der:vation of asset values
4. 5. 8. 2 . 1
Introduction4. 5. 8 . 2.2
The procedur e adofted4. 5 . 8.2 . 3
Optimum re~lacement times4. 5 . 8 . 2. 4
Calculation of asset values The Objective Function'I'he Basic Natrix The .:iolution
.• para.me Lric solution rlctivity levels: ~lan
4
139 140 142 143 145 145 147 147 149 150 150 152 152 153 153 155 156 158 158 158 162 4.8 . 1
4. 8. 2 4. 8. 2 . 1 4. 8.2 . 2
Intercro~~ed and annual cropping activities
162
~erennial crops and land transfer
activities
163
4. 8. 2. 3 4. 8. 2. 4 4 . 8. 3 4 . 8. 4 4 . 8. 5 4 . 8 . 5. 1 4 . 8 . 5 . 2 4 . 8 . 5 . 3 4 . 8 . 5 . 4 4. 8 . 5 . 5 4. 8 . 6
Activities to hire labour Cash flows nd t~xation
Value of the objective function: Plan
4
Resource~ in dis~os&l: ~lan 4 Value of resources: Plan 4 Introduction
Annual cropland restraints Labour restraints
Process ~nd fresh market crop restraints Tax-free cash restraints
Opportunity costs of growing excluded crops: Plan
4
Effect of Varying the Length of the Pla~ning Horizon
Discussi on on the Programming Results
164 165 168 168
170 170 171 171
172 173
174
176
177
4.10.1 4.10.2 4.10.3
CHJ.f'Tl:.R 5
Physical plans and problems with changed contracts
Resource use and disposal levels
Problems associated with the variability of input-output coefficients
Value of resources Summary
~U,;'i.DR""TIC
I -_
OGRA.i',1NING.,rD
PROFIT K,.XIMI.::i.~.TI01·Introduction
The Ap~roach ~dopted The Restraints
5.3.1 5.3.1.1 5.3.1.2 5.3.1.3 5.3.2 5.3.3 5.3.4
Glasshouse restraints
Propagating-house (restraints R1-R13) Growing-house (restraints R14-R26) Shade-house (restraints
R27-R36)
Labour (restraints R37-R41) Land (restraint R42)
Summary of resource supplies on the hypothetical nursery
The J.cti vi ties
5 .
4.1 5.4.2 5.4.3 5.4.4 5.4.5 5.4.6 5 .. 4.7 5.4.8 5 .. 4.9 5.4.10 5.4.11 5 .. 4.12 5.4.13 5.4.145.4.15 5.4.16 5.4.17
Telopea speciosissima (P1) Acacia baileyana (P2)
Passiflora 'Crackerjack' (P3) Banksia grandis (P4)
Photinia robusta (P5) Eucalyptus ficifolia (P6) Stachyurus praecox (P7)
Cistus purpureus 'Brilliancy' (P8) Protea cynaroides (P9)
Tibouchina grandiflora (P10) Azalea indica 1Salmonea' (P11) Viburnum japonicum (P12)
Rhododendron 'Christmas Cheer' (P13) Weigela florida variegata (P14) and Forsythia 'Karlsax' (:f!5)
Azalea occidentalis (P16) Magnolia stellata (P17)
Callicarpa dichotoma (P18) and Hypericum 'Hi dcote Gold' (P19)
177 179
183 183 185
186 186
186 187 188
189
190 190 191 191
191 192 192 192 193 193 193 193 194 194
194
195 195 195
196
196
5. 6
5.7
5.9
Input-Output Coefficients 5. 5.1
5.5.2 5.5.3 5.5.4 5.5.5
Problems of multi-period production Glasshouse restraints
Labour restr&ints Land restr&int
Dominated restraints
Matrix of ~ctivity Resource Requirements The Objective Function
5.7.1 5.7.2 5.7.3 5.7.4 5.7.5
Introduction
Estimation of the demand functions Vari.able costs
Total net revenue objective functi on Overhead costs
The Solution
5.8.1 Introduction
5.8.2 Comparison of the optimum plan and the nurseryman's plan
5.8.2.1 Production levels ~nd prices 5.8.2.2 Comparison of net revenue
5.8.2.3 Comparison of resource requirements 5.8.2.3.1 Glasshouse restraints
5.8.2.3.2 Labour and land restraints 5.8.3 Resources in disposal 5.8.4
5.8 . 5
Value of resources
The cost of including non-basic activities i n the optimum plan Comments on the ~uadratic Programming Model
and Results
5.9.1 Extension of the model to represent actual situations
Incorporation of demand cross-effects into the quadratic programme
Problems associated with the demand curves
Shadow prices and resource disposal levels
CHAI-TER 6 RISK FROGRAHLING 1.ND FRESH VEGETABLE PRODUCTION
6 . 1 6.2
Introduction The Restraints
6 . 2.1
6.2.2
Land
Labour availability
196 196
198
198
200 201 201 203 203 203 205 208 209 209 209 210 210 213 213 213 216
216
216 217
218
218 219 220
222
222
223 223 224
6 . 3
6. 4 6 . 5
6.6 6. 7
6 . 2. 3
Rotations ~nd cropping limits The ilcti vi ties6 . 3 . 1 6 . 3 . 2 6.3 . 3 6 . 3 . 4 6 . 3 . 5 6. 3 . 5.1 6 . 3 . 5.2 6. 3 . 6 6 . 3. 7
Production on freehold and leased l and
$pring carrot and parsnip Crown .i1w.upkin
Bu ttercui pull:pkin .::;_nd butt ernu t pumpkin Brassica activities
Winter c2uliflower and Jinter cabbage Spring cauliflower and Spring cabbage ,Vint er lettuce
Spring lettuce In.i1ut-Output Coefficients The Objective Function
6 . 5 . 1 6. 5 . 2 6 . 5 . 3 6 . 5.5 6 . 5 . 5.1 6 . 5 . 5.2 6.5.5 . 3 6 . 5 . 6
Introduction
Activity prices and yields Variable costs
Activity net revenues
Net revenue variances and covariances The variance of activity net revenues The covariance of activity net revenues The variance - covariance matrix
Overhead costs
Construction of the Initial Risk Programming Mat~ix
The Haximum Risk Solution
6. 7 . 2 . 3 6. 7. 3 6 . 7. 4
Introduction
Com.i1arison of the maximum risk solution with the grower's plan
Comparison of activity levels
Expected net revenue and net revenue variance
Comparison of resource requirements Value of resources
Marginal opportunity costs
q. 8 Summary CHAPTER 7
of the Risk Programming Model
SUMMARY OF R:SSULTS :1.ND COMMENTS ON
NATHEMATIC.1-1.L PROGRAMMING IN HORTICULTUHE Introduction
The Linear Programming Applications
225 227 22?
227 227 227 227 227
228
228
228 228
230 230 230 233 233 234 234 236 237 237
238 239 239
239 239 240
242
242 244
245
247
247
247
The Quadratic Programming Applications The Fotential of Mathematical Frogramming
in the New Zealand Horticultural Advisory Service
7 . 4. 1
The general use of programming techniques7. 4. 2
The use of farm records7. 4. 3
The role of market intelligence7 . 5
ConclusionsA~l-ENDIX A D,\.TA l<ELJ.TING TO THE INTERT.1:,K1.·CR;..L LIN.2.,'...R FROGRi<_t,Tivit. OF CH.i-.FTr.R 4
A.1 Frice, Yield and Variable Cost Estimates for Annual Crops
A.2 Price, Yield and Variable Cost Estimates for Perennial Crops and their Optimum Replacement
A.2.1 Apple
A . 2. 2
,'.i.sparagus A.2.3 PeachA.3 Part of the Basic Matrix
1u .t'E~DIX B D;..T_-1. OF TH.L'., R:i::SK rHOGR1-J,frlING HGD:C:L OF CH;,.t:-T.2:R 6
B.1 Description of the Data
249
250 250 251 252 253
254 254
257
257258
261
263
Table
2.1 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20
3.24 3.25 3.26 3.27 3.28 3.29 3.30
LIST OF TABLES
Initial Simplex Tableau for Quadratic Programming Labour Restraints and Supply
Cropping Limit Restraints Price and Yield Assumptions Variable Costs
Gross Margins
Variable Costs - Rhubarb (P6) Present Value of Rhubarb (P6) Variable Costs - Soleil d'Ors (P7) Present Value of Soleil d'Ors (P7) Overhead Costs
Labour Input - Lettuce Activity (P8) The Basic Matrix
The Cropping Programme
Comparison of Activity Levels and Farm Profits Between the Optimum and the Grower's Plan Gross Margin Stability Limits
Land in Disposal Labour in Disposal Land Shadow Prices
Cropping Limit Shadow Prices
The Parametric Solution - Activity Levels and Farm Profits
The Parametric Solution - Value of Scarce Resources The Adopted Cropping Programm~
Comparison of Activity Levels and Farm Profits Between the Adopted and the Grower's Plan
Land Requirements of the Adopted and the Grower's Plan Labour Requirements of the Adopted and the Grower's Plan Gross Margin Stability Limits - Adopted Plan
Price Limits - Adopted Plan Yield Limits - Adopted Plan Land in Disposal - Adopted Plan Labour in Disposal - Adopted Plan
Page
23 41 43 51 53 54 55 56 57 58 60
64 6769 70 72 73 74 75
76
80 83
86
87
89 90 92 93
94
95
96
3.31 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9
4.10 4.11
4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20
4.21
4.22 4.23 4.24
4.25
4.26 4.27 4.28 4.29
4.30
Impact of Taxation on Increased Profits Schematic Representation of the Basic Matrix Process Crop Contracts
Land Restraints
Labour Requirements of Maintenance Work and the Young Apple and Asparagus Crops
Labour Restraints
Process Crop Restraints Fresh Market Crop Restraints Rotation Restraints
Tax-Deductible Overhead Costs Cash and Taxation Restraints
Objective Function Accounting Restraints Land: Input-Output Coefficients
Labour: Input-Output Coefficients
Rotation Restraints: Input-Output Coefficients
Cash and Taxation Restraints: Input-Output Coefficients Marginal Tax Rates
Objective Function Accounting Restraints:
Input-Output Coefficients Asset Values of Perennial Crops The Objective Function
Price Limits of the Final Assets Activity
Crop Activity Levels Which Vary in the Parametric Solution
Values of the Objective Function in the Parametric Solution
Intercropped and Annual Cropping Activities - Plan 4 Perennial Crops and Land Transfer Activities - Plan
4
Labour to be Hired - Plan
4
Cash Flows and Taxation - Plan 4 Resources in Disposal - Plan 4 Labour Shadow Prices - Plan 4
Shadow Prices of Process and Market Crop Restraints - Plan 4
Marginal Opportunity Costs of Growing Non-Basic Crops - Plan 4
Labour Restraints
Labour Input-Photinia (P5)
Planting Methods and Land Requirements
100
111 112
116
120 121 121 123
124
128 130
131 141 144 146 148
150
151 156 157 159
160
161
162
163 165
166 169 172
173
175
190
199
200
5.4 5. 5 5.6
5.75.8 5.9
5 .11
5.12 5.13 6 .1 6.2
6.3
6.46 . 5 6 . 6
6.7
6.8 6.9
6 .10
6.11 6 .12
6 .13
6 . 14
A.1
A.2 A.3 A . 4 A .5 A, 6 A.7 A, 8
B.1 B.2
Activity Resource Requirements and Resource Supplies The Demand (Average rtevenue) Functions
Variable Costs
Output and Prices for the Optimum and the Nurseryman's Plan
Fropagating-House Requirements of the Optimum and the Nurseryman's Plan
Growing-House Requirements of the Optimum and the Nurseryman's 1-lan
Shade-House Requirements of the Optimum and the Nurseryman's Plan
Land and Labour Requirements of the Optimum and the Nurseryman's Plan
Value of Resources
Marginal Opportuni ty Costs Labour Restraints and Supplies Cropping Restraints
Activity Resource Requirements and Resource Supplies Wholesale I-rice and Quantity Sold - Crown Pumpkin Prices, Yields and Gross Revenue - Crown Pumpkin Net Revenue - Crown Fumpkin
Activity Net Revenues
Variance of rictivity Net Revenues Overhead Costs
Comparison of Activity Levels Between the Maximum Risk and the Grower's Plan
Expected Net Revenue
Resource Requirements of the Maximum Risk and the Grower's flan
Value of Resources
!-1.arginal Opportunity Costs Gross Revenue
Variable Costs Revenue, Costs Revenue, Costs Revenue, Costs Sub-Matrix a Sub-Matrix g Sub-Matrix h
from Annual Crops of Annual Crops
and Optimum Replacement:
and Optimum Replacement: and Optimum Replacement:
Quantities Sold, Acreages and Yields
Apples Asparagus Peaches
Average Net Wholesale }'rices, Yields and Gross Revenues
202 206 207
211 213 214 215
215
217 218 225 226
229
231 232 233 234
235
237240
241
243
244244
255 256 259
260
26 4
265
266
268
B . 3 B . 4
Figure 2.1 2.2 3.1
3 . 2
Variable Costs
The Net Revenue Variance - Covariance Matrix
LIST C.f FIGURES
hn E - V Indifference Jystem
Expected Income as a Function of Income Variance Activity Land Requirements
The Farametric Solution
270 271
Page
29
29
38
81