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Description
This thesis develops a low-investment marketing strategy that allows low-to-mid level farmers extend their commercialization reach by strategically sending containers of fresh produce items to secondary markets that present temporary arbitrage opportunities. The methodology aims at identifying time windows of opportunity in which the price differential between two markets create an arbitrage opportunity for a transaction; a transaction involves buying a fresh produce item at a base market, and then shipping and selling it at secondary market price. A decision-making tool is developed that gauges the individual arbitrage opportunities and determines the specific price differential (or threshold level) that is most beneficial to the farmer under particular market conditions. For this purpose, two approaches are developed; a pragmatic approach that uses historic price information of the products in order to find the optimal price differential that maximizes earnings, and a theoretical one, which optimizes an expected profit model of the shipments to identify this optimal threshold. This thesis also develops risk management strategies that further reduce profit variability during a particular two-market transaction. In this case, financial engineering concepts are used to determine a shipment configuration strategy that minimizes the overall variability of the profits. For this, a Markowitz model is developed to determine the weight assignation of each component for a particular shipment. Based on the results of the analysis, it is deemed possible to formulate a shipment policy that not only increases the farmer's commercialization reach, but also produces profitable operations. In general, the observed rates of return under a pragmatic and theoretical approach hovered between 0.072 and 0.616 within important two-market structures. Secondly, it is demonstrated that the level of return and risk can be manipulated by varying the strictness of the shipping policy to meet the overall objectives of the decision-maker. Finally, it was found that one can minimize the risk of a particular two-market transaction by strategically grouping the product shipments.
ContributorsFlores, Hector M (Author) / Villalobos, Rene (Thesis advisor) / Runger, George C. (Committee member) / Maltz, Arnold (Committee member) / Arizona State University (Publisher)
Created2011
Description
Every year, more than 11 million maritime containers and 11 million commercial trucks arrive to the United States, carrying all types of imported goods. As it would be costly to inspect every container, only a fraction of them are inspected before being allowed to proceed into the United States. This dissertation proposes a decision support system that aims to allocate the scarce inspection resources at a land POE (L-POE), to minimize the different costs associated with the inspection process, including those associated with delaying the entry of legitimate imports. Given the ubiquity of sensors in all aspects of the supply chain, it is necessary to have automated decision systems that incorporate the information provided by these sensors and other possible channels into the inspection planning process. The inspection planning system proposed in this dissertation decomposes the inspection effort allocation process into two phases: Primary and detailed inspection planning. The former helps decide what to inspect, and the latter how to conduct the inspections. A multi-objective optimization (MOO) model is developed for primary inspection planning. This model tries to balance the costs of conducting inspections, direct and expected, and the waiting time of the trucks. The resulting model is exploited in two different ways: One is to construct a complete or a partial efficient frontier for the MOO model with diversity of Pareto-optimal solutions maximized; the other is to evaluate a given inspection plan and provide possible suggestions for improvement. The methodologies are described in detail and case studies provided. The case studies show that this MOO based primary planning model can effectively pick out the non-conforming trucks to inspect, while balancing the costs and waiting time.
ContributorsXue, Liangjie (Author) / Villalobos, Jesus René (Thesis advisor) / Gel, Esma (Committee member) / Runger, George C. (Committee member) / Maltz, Arnold (Committee member) / Arizona State University (Publisher)
Created2012