A novel, Value-Focused-Thinking based, approach for modelling agro-industrial decisions under scarce information

Abstract

Agro-industrial decision-making is hampered by several, variously-natured, uncertainties. As uncertainty reduction is expensive, the decision modelling process for these industries must strive to use all available information. However, said inclusive effort should be accompanied by an effort to keep modelling assumptions transparent. This work shows the development, from a Value-Focused Thinking perspective, of a model to assess alternatives for improving the operation of a cattle fodder producer. Modelling starts by analyzing and structuring the owner's objectives and proceeds by systematically characterizing, via value judgments or probability distributions, the connections between structured objectives. Constructing the model over a blueprint of connected objectives allows a faithful representation of the understanding of the system behavior while the methodical, one-connection-at-a-time, modelling procedure renders the assumptions used to operationalize each connection visible, facilitating their replacement if more information becomes available. The modelling approach put forward here can support industrial decision making with limited information.

Decision-Analytic, Simulation-Based Model for Plantation Management Under Uncertainty in a Competitive Environment

“…The customer preference model is developed using Keneey's VFT, which has been used elsewhere to analyze agroindustrial decisions (Chew-Hernández et al, 2019). At a given time, the product available in the market consists of Q F (mass units) of the farmer's product and Q A and Q B (mass units) from competitors A and B, respectively.…”