A simulation model for evaluating the long-term financial impact of different wine grape production systems
Year: 2015
Type: dissertation
Abstract: ENGLISH ABSTRACT: Agricultural production takes place in an uncertain and complex environment, with \nproduction the result of the culmination of a variety of factors within a greater system. \nConsequently, accounting for the influence of variables in the production system is very difficult, \nmaking it a daunting task for decision makers to make good decisions. In the wine grape \nproduction context, this problem is accentuated due to the capital intensive and perennial nature \nof investments, also giving rise to a path dependency. As a result it is essential to make \nstrategically sound decisions in order to ensure the long-term profitability and financial \nfeasibility of wine grape production. Decision making tools, like a model, can be of invaluable \nsupport for strategic decision making. A model is used to simplify reality, by imitating and \nsimulating the actual system as closely as possible. A simulation model was therefore developed \nfor this thesis to be able to evaluate the long-term financial impact of different wine grape \nproduction systems and to support strategic decision making. This model can be adapted to \nindividual farm specific features, scenarios and preferences, in the evaluation and analysis of \ndifferent investment and wine grape production system decisions. For this study, the nature of \nagricultural systems as well as qualities required by a simulation model, were investigated. The \nformer is followed by an investigation of the effect of the grapevine and trellis specific qualities \non the possibilities of the production system, as well as the implication of capital budgeting and \nfinancing considerations on the performance of the wine grape production system. In view of the \nabove, the model was then applied to simulate and evaluate different wine grape production \nsystems as well as a structural transition and expansion of wine grape production, for a simulated \nfarm in the Breedekloof region, South Africa. The model can be used for decision making and \nscenario planning purposes by wine grape producers and stakeholders in the wine industry.
Author: Pierre-Andre Rabie
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: Zero hunger
Open Access status: green
OpenAlex ID: W1599988227