Operational and Financial Decisions Within Proportional Investment Cooperatives

• 成果类型: Article
• 署名作者: Qian, Xiaoyan; Oisen, Tava Lennon
• 署名单位: Dongbei University of Finance & Economics; University of Auckland
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.2018.0762
• 发表日期: 2020
• 页码: 546-561
• 关键词: cooperative; proportional investment; finance and operations; COORDINATION; RISK

摘要

Problem definition: We explore the coordination of operational and financial decisions of proportional investment agricultural marketing cooperatives, where members' (farmers') equity is required to be in proportion to their patronage (i.e., produce supplied). Academiclpractical relevance: In a cooperative (co-op), operational and financial decisions are inseparable because the co-op's investment capital is linked to its economic transactions with members. We include unique features of co-ops into an analytical model and derive some key results that are different from those for investor-owned corporations. Methodology: In the presence of yield and market uncertainty, we model this situation using a Markov decision process wherein the decisions of processing quantity interact with the financial decisions of retained earnings and short-term loans. The objective is to maximize the expected present value of the aggregated farmers' payments over a finite horizon. Results: (1) Characterization of the properties of the value function and the optimal policy; (2) explicit expressions for the deterministic yield dynamic program, wherein a myopic policy is optimal; and (3) identification of financial risks associated with uncertain market and yield. Managerial implications: The results provide insight into a coop's decision making, cash position, and risk management.