Economic simulation to support investment decisions in pig farming

The study described in this thesis focuses on the development and use of a model that simulates the consequences of long-term investment decisions in pig farming. The thesis is composed of six parts. Chapter 1 deals with a basic review of the literature on strategic planning under risk and uncertainty. A computer-based model for strategic pig farm planning, the Investment Simulation Model (ISM) was developed and described in chapter 2. ISM is a stochastic simulation model, which uses data of the individual farm and also data representing the average Dutch pig farm. Chapter 3 analyzes the effects of the input variables on the outcome of the response variable for the distinguished strategies, using a stochastic approach for these inputs in the experimental design. They were formalized in a regression metamodel for each replacement strategy. Chapter 4 describes an evaluation procedure that was developed for testing ISM under operational use. In chapter 5 the expected economic consequences of farm expansion plans on future economic viability were estimated for 24 pig farms, using ISM. The concluding chapter provides a general discussion about the choices that were made in modelling the strategic planning process, the experiences gained, and the possibilities for future research.