Capacity management in agricultural commodity processing

• Main Authors: BOYABATLI, Onur, NGUYEN, Jason (Quang) Dang
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2022
• Subjects: Capacity management; Multi-product firm; Commodity risk management; Spot market; Agriculture; Dynamic programming; Processing; Storage; Agribusiness; Operations and Supply Chain Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6940
• Institution: Singapore Management University

This chapter examines the capacity investment decisions of an agricultural processing firm that produces a commodity output and a byproduct using a commodity input. We model the firm’s problem as a finite-horizon stochastic dynamic program where the firm makes one-time input processing capacity and...