No. 27 (2007)

When and what quantity shall we buy? Optimal cereal – acquisition strategies

Published November 15, 2007
Lajos Nagy
Debreceni Egyetem Agrár- és Műszaki Tudományok Centruma, Agrárgazdasági és Vidékfejlesztési Kar, Gazdaságelemzési és Statisztikai Tanszék, Debrecen


Nagy, L. (2007). When and what quantity shall we buy? Optimal cereal – acquisition strategies. Acta Agraria Debreceniensis, (27), 175-181.

For farm products, it is typical that goods appear in a certain period of time in gross; therefore, from the viewpoint of forestallers/users, it is an important question how much and when to buy and for growers how much and when to sell. Among the costs that have affects on income, we have to emphasize stockkeeping costs (i.e. cost of tied-up capital, ordering costs) and acquisition costs. The last one is very important, because we can
notice great divergences in prices for cereals associated with the significant seasonal factors for a given year, so acquisition prices affect substantially the evolution of our costs.
We can establish the strategies in two steps: setting up 2 models and interconnecting them. One means the strategies that differ from each other in ordering quantities and these comparative analyses. This model contains the analyses of seasonal effects and also the results that we apply in the model. The other one is a dynamical mathematical programming model which – by considering alternative investments – helps us to choose from the strategies in the previously mentioned model that one, which assures us maximum income. 


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