An analysis of geographic and product diversification in crop planning strategy

Abstract

An empirical study of the factors that influence the optimal degree of geographic and product diversification to use as a risk mitigant in agriculture planning is carried out using a simple crop planning optimisation model that maximises the expected profit.The factors considered include the distance between the available plots, the amount and variability of spoilage risk, the yield variability and the variance in the produce selling prices. We propose a new metric, based on the entropy concept, for quantifying the geographic diversification. The degree of geographic and product diversification of the optimal plan, as well as the profit level, the overall percentage of demand satisfied and the number of plots unused, are studied. The results show that the optimal combination of the two types of diversification (geographic and product) are dependent on the specific scenario considered, and the factor that has the largest influence on the degree of geographic and product diversification is the separation between the plots. A similar effect is in the variance of the selling prices. Also, as the geographic diversification of the optimal solution increases so does its product diversification and its profit level. The profit level decreases significantly as the separation between the plots and the average 2 spoilage risk increases. Other effects that are worth mentioning are the reduction in the percentage of demand satisfied as the separation between the plots increases, and when the variance in the selling prices increases.

Pelatihan Pembuatan Sosis Rendah Lemak sebagai Upaya Mendorong Diversifikasi Usaha Koperasi Serba Usaha Tandangsari dan Masyarakat Desa Cinanjung, Kabupaten Sumedang

“…Produktivitas usaha pengolahan hasil ternak masih dapat ditingkatkan salah satunya dengan diversifikasi usaha dan produk. Menurut Villa et al (2019), diversifikasi usaha merupakan upaya untuk mencari dan mengembangkan produk atau pasar baru atau keduanya dalam rangka mengejar pertumbuhan angka penjualan dan profit serta penganekaragaman produk atau bidang usaha yang dilakukan untuk memaksimalkan profit. Produktivitas usaha pengolahan hasil ternak dapat dilakukan salah satunya dengan cara pelatihan keterampilan bagi anggota Koperasi Serba Usaha (KSU) Tandangsari yang bertanggung jawab di bidang produksi dan pemilihan bahan baku dan masyarakat Desa Cinanjung dengan jumlah anggota koperasi sebanyak 2,365 orang (Rahayu et al, 2022).…”

The Application of Waqf and Endowment Fund Based on the Principles in the Sharia Maqashid Pillar Society

“…By diversifying products or services, companies can protect themselves from competing companies. In the case of dairy cattle in a slow-growing market, diversification allows companies to take advantage of surplus cash flows to finance which products have more market prospects (Villa, Adenso-Díaz, and Lozano 2019). When a company reaches a certain point in its evolution, founders, investors, and executives often plan and implement growth strategies, such as diversification (Sun, Peng, and Tan, 2017).…”

“…According to a study by Villa et al, diversification of products and services can increase a company's competitiveness. Focusing on one or two customers can limit a company's thinking and growth prospects (Villa et al 2019). In addition, it can happen where one big customer of a company may not be on the cutting edge of market needs because the products offered are not relevant to what they want.…”

Recent Evolution of Perennial Crop Farms: Evidence from Dak Lak Province, Vietnam

“…In Spain, diversification is as a crop planning strategy for geographic area and products. (Barham and Weber, 2012;Villa et al, 2019). Nonetheless, the Government should attend quality of certificate farms instead of increasing quantity.…”