Abstract
This chapter includes a study case of investment decision-making based on the genetic algorithm (GA) results about optimizing the profitability of fattening-sheep farming. This work begins with the simulation of the farming system considered, taking into account statistic records and the experience of sheep farmers to represent the real system’s complexity. As most of these factors have an inherent uncertain behavior, probability distributions have been included to represent them. Regarding the economic analysis, the Monte Carlo simulation results for a chosen alternative were used to estimate the initial investment, cash flows and net present value (NPV). Finally, a GA was performed to maximize the NPV and to support the decision about the best alternative according to the setting of key factors such as: initial number of ewes, type of breed, type of sale, and planning horizon. These determine the rest of the variables behaviors, for example: initial number of rams, land area required, mortality rate, proliferation and prices in market, to name just a few. In conclusion, simulating the fattening-sheep farming system considering its uncertainty in the economic analysis and maximizing the NPV with a GA allowed the investment decision-making for this project to be based in the analysis of all possible scenarios, identifying the one that would produce the best profitability.
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Notes
- 1.
Fish and seafood consumption is excluded for this estimate.
References
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Acknowledgments
This work was supported in part by the Division of Research and Postgraduate Studies of the Technological Institute of Orizaba.
Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food, State of Veracruz Delegation, Fortin District for facilitating all the information about sheep farming in the region.
All the expert people that helped to understand the fattening-sheep farming system, but their names are omitted to avoid forgetting someone’s name.
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Appendix
Appendix
1.1 Glossary
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Sheep: Singular and plural general name to refer lambs, ewes, rams, and wethers as a whole.
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Lamb: A sheep either male or female younger than 1 year.
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Ewe: A female sheep older than 1 year.
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Ram (occasionally called tup): A male sheep older than 1 year.
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Wether: A castrated male sheep older than 1 year.
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“On-the-hoof” type of sale: Sheep are sold by weight without any further process.
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Carcass type of sale: Sheep are slaughtered to produce meat, obtaining about 50% of the live animal weight.
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Semiextensive system: Sheep are tended during the day and they get supplementary food in feeding troughs at the end of the afternoon.
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del Pilar Angulo-Fernandez, I., Aguilar-Lasserre, A.A., Gonzalez-Huerta, M.A., Moras-Sanchez, C.G. (2013). Investing in the Sheep Farming Industry: A Study Case Based on Genetic Algorithms. In: Ao, SI., Gelman, L. (eds) Electrical Engineering and Intelligent Systems. Lecture Notes in Electrical Engineering, vol 130. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-2317-1_28
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