AUSTRALIAN WHEAT STORAGE: A DYNAMIC PROGRAMMING APPROACH Report as inadecuate




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Dynamic programming is used to examine whether Australia should store wheat for subsequent sale at higher prices. The dynamic programming model is developed assuming that the demand for Australian wheat is perfectly elastic at the world price. An important consequence of this assumption is that the algorithm used in computing the optimal policy takes a very simple form. It is concluded that interest rate and wheat price in the following season are the major determinants of storage policy. When prices are stable, rule-of-thumb policies, such as storing when prices are below average, are sub-optimal.

Subject(s): Marketing

Issue Date: 1978-08

Publication Type: Journal Article

PURL Identifier: http://purl.umn.edu/22715 Published in: Australian Journal of Agricultural Economics, Volume 22, Number 2-3 Page range: 158-174

Total Pages: 17

Record appears in: Australian Agricultural and Resource Economics Society (AARES) > Australian Journal of Agricultural Economics





Author: Alaouze, Chris M. ; Sturgess, Neil H. ; Watson, Alistair S.

Source: http://ageconsearch.umn.edu/record/22715?ln=en







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