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A simulation model for evaluating the long-term financial impact of different wine grape production systems
ENGLISH ABSTRACT: Agricultural production takes place in an uncertain and complex environment, with production the result of the culmination of a variety of factors within a greater system. Consequently, accounting for the influence of variables in the production system is very difficult, making...
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| Format: | Thesis |
| Language: | en_ZA |
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Stellenbosch : Stellenbosch University
2015
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| Summary: | ENGLISH ABSTRACT: Agricultural production takes place in an uncertain and complex environment, with
production the result of the culmination of a variety of factors within a greater system.
Consequently, accounting for the influence of variables in the production system is very difficult,
making it a daunting task for decision makers to make good decisions. In the wine grape
production context, this problem is accentuated due to the capital intensive and perennial nature
of investments, also giving rise to a path dependency. As a result it is essential to make
strategically sound decisions in order to ensure the long-term profitability and financial
feasibility of wine grape production. Decision making tools, like a model, can be of invaluable
support for strategic decision making. A model is used to simplify reality, by imitating and
simulating the actual system as closely as possible. A simulation model was therefore developed
for this thesis to be able to evaluate the long-term financial impact of different wine grape
production systems and to support strategic decision making. This model can be adapted to
individual farm specific features, scenarios and preferences, in the evaluation and analysis of
different investment and wine grape production system decisions. For this study, the nature of
agricultural systems as well as qualities required by a simulation model, were investigated. The
former is followed by an investigation of the effect of the grapevine and trellis specific qualities
on the possibilities of the production system, as well as the implication of capital budgeting and
financing considerations on the performance of the wine grape production system. In view of the
above, the model was then applied to simulate and evaluate different wine grape production
systems as well as a structural transition and expansion of wine grape production, for a simulated
farm in the Breedekloof region, South Africa. The model can be used for decision making and
scenario planning purposes by wine grape producers and stakeholders in the wine industry. |
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