Optimizing pig marketing decisions under price fluctuations

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Optimizing pig marketing decisions under price fluctuations. / Pourmoayed, Reza; Relund Nielsen, Lars.

I: Annals of Operations Research, 2020.

Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avisTidsskriftartikelForskningpeer review

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Pourmoayed, Reza ; Relund Nielsen, Lars. / Optimizing pig marketing decisions under price fluctuations. I: Annals of Operations Research. 2020.

Bibtex

@article{81c3b6d5f22941b88374fa4f3af018a3,
title = "Optimizing pig marketing decisions under price fluctuations",
abstract = "In the manufacturing of fattening pigs, pig marketing refers to a sequence of culling decisions until the production unit is empty. The profit of a production unit is highly dependent on the price of pork, the cost of feeding and the cost of buying piglets. Price fluctuations in the market consequently influence the profit, and the optimal marketing decisions may change under different price conditions. Most studies have considered pig marketing under constant price conditions. However, because price fluctuations have an influence on profit and optimal marketing decisions it is relevant to consider pig marketing under price fluctuations. In this paper we formulate a hierarchical Markov decision process with two levels which model sequential marketing decisions under price fluctuations in a pig pen. The state of the system is based on information about pork, piglet and feed prices. Moreover, the information is updated using a Bayesian approach and embedded into the hierarchical Markov decision process. The optimal policy is analyzed under different patterns of price fluctuations. We also assess the value of including price information into the model.",
keywords = "Bayesian updating, Herd management, Markov decision process, Pig production, Price fluctuations",
author = "Reza Pourmoayed and Lars Relund Nielsen",
year = "2020",
doi = "10.1007/s10479-020-03646-0",
language = "English",
journal = "Annals of Operations Research",
issn = "0254-5330",
publisher = "Springer New York LLC",

}

RIS

TY - JOUR

T1 - Optimizing pig marketing decisions under price fluctuations

AU - Pourmoayed, Reza

AU - Relund Nielsen, Lars

PY - 2020

Y1 - 2020

N2 - In the manufacturing of fattening pigs, pig marketing refers to a sequence of culling decisions until the production unit is empty. The profit of a production unit is highly dependent on the price of pork, the cost of feeding and the cost of buying piglets. Price fluctuations in the market consequently influence the profit, and the optimal marketing decisions may change under different price conditions. Most studies have considered pig marketing under constant price conditions. However, because price fluctuations have an influence on profit and optimal marketing decisions it is relevant to consider pig marketing under price fluctuations. In this paper we formulate a hierarchical Markov decision process with two levels which model sequential marketing decisions under price fluctuations in a pig pen. The state of the system is based on information about pork, piglet and feed prices. Moreover, the information is updated using a Bayesian approach and embedded into the hierarchical Markov decision process. The optimal policy is analyzed under different patterns of price fluctuations. We also assess the value of including price information into the model.

AB - In the manufacturing of fattening pigs, pig marketing refers to a sequence of culling decisions until the production unit is empty. The profit of a production unit is highly dependent on the price of pork, the cost of feeding and the cost of buying piglets. Price fluctuations in the market consequently influence the profit, and the optimal marketing decisions may change under different price conditions. Most studies have considered pig marketing under constant price conditions. However, because price fluctuations have an influence on profit and optimal marketing decisions it is relevant to consider pig marketing under price fluctuations. In this paper we formulate a hierarchical Markov decision process with two levels which model sequential marketing decisions under price fluctuations in a pig pen. The state of the system is based on information about pork, piglet and feed prices. Moreover, the information is updated using a Bayesian approach and embedded into the hierarchical Markov decision process. The optimal policy is analyzed under different patterns of price fluctuations. We also assess the value of including price information into the model.

KW - Bayesian updating

KW - Herd management

KW - Markov decision process

KW - Pig production

KW - Price fluctuations

UR - http://www.scopus.com/inward/record.url?scp=85086773016&partnerID=8YFLogxK

U2 - 10.1007/s10479-020-03646-0

DO - 10.1007/s10479-020-03646-0

M3 - Journal article

AN - SCOPUS:85086773016

JO - Annals of Operations Research

JF - Annals of Operations Research

SN - 0254-5330

ER -