Economic efficiency in plant operations with special reference to the marketing of California pears

Abstract

services-actually operate. Incorporation of modifications in the conventional theory then provides a more workable base for studies of cost and efficiency.

The Measurement of Efficiency Relative to a Frontier Production Function

“…A considerable degree of neutral and nonneutral economies of scale was observed over the smallest plants, and a considerable range of moderate economies was followed by slight diseconomies in the largest plant. The correlation of efficiency to plant and environmental characteristics also provides an alternative to N erlove's [8] suggestion of adjusting for such factors prior to estimating efficiency. The analysis of technological advance indicated a shift of the production function with the construction of new plants.…”

“…The shape of the expansion path need not be specified prior to estimation. Thus the reservations expressed by Aigner and Chu [1] and Nerlove [8] concerning the model's general applicability can be eliminated. In this regard, Aigner and Chu noted that a production function estimated with this technique would not conform to the Law of Variable Proportions.…”

Discontinuous Plant Cost Function and a Modification of the Stollsteimer Location Model

“…The discontinuity of a cost function may occur even in the short run, due to plant segmentation and discontinuous variation in the rate of output [2,4] or due to the various combinations of variable factors with different degrees of divisibility [11]. In the long run, the discontinuity of the plant cost function results technically from the indivisibility of durable equipment.…”

Short-Run Supply of Services. The Case of Soybean Processing

“…Where plant output ceases to expand before marginal costs turn up and where prices remain above such costs, some large bottleneck to expansion is implied which would cause a steep rise in marginal costs. For perceptive analyses of the behavior of costs, see Hirshleifer [8] and French et al [5]. Rising marginal costs may have different causes in different industries.…”