DIE GENERERING EN GEBRUIK VAN KUMULATIEWE WAARSKYNLIKHEIDSVERDELINGS VIR DIE EVALUERING VAN DIVERSIFIKASIE AS RISIKOBESTUURSWYSE IN DIE WINTERTONGEBIED

Cumulative probability distributions (CPDs) of a few financial criteria were generated with the aid of the FARMS model and used to evaluate diversification as a method of risk management by Winterton farmers. Given the management abilities of the farmer, the efficiency of risk management is influenced by the composition of fam,ing enterprises, the interaction between the enterprises and the debt-burden situation. The use of CPDs serves to portray the uncertainty and nature of the outcome as well as the financial implications of the inclusion of altemative enterprises clearly. Since the decision maker is familiar with the total width of outcome of the financial criteria, the probability of a specific required outcome level being realised can be detem,ined. ln addition the model can be used to evaluate cash and credit flow interactively in the decision-making process. With the assistence of the model and the use of the method of approach different management strategies can be evaluated at farming level.


Other Titles:
THE GENERATION AND USE OF CUMULATIVE PROBABILITY DISTRIBUTIONS FOR THE EVALUATION OF DIVERSIFICATION AS A METHOD OF RISK MANAGEMENT IN THE WINTERTON AREA
Issue Date:
1996-12
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/267977
ISSN:
0303-1853
Language:
English
Published in:
Agrekon, Volume 35, Issue 4
Page range:
245-251




 Record created 2018-02-07, last modified 2018-04-02

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)