COMPUTER SIMULATION MODEL FOR STRATEGIC MANAGEMENT DECISIONS RELATED TO YUMA, ARIZONA CITRUS ORCHARDS (POLICY, OPTIMIZATION, OPERATIONS).

Abstract

This research assisted the Yuma, Arizona citrus orchard manager in his strategic planning for achieving a low-cost position in a focused segment of the citrus industry. Citrus growers in the Yuma district are faced with major changes in their competitive environment and must adopt new strategic plans in order to continue to compete effectively in what has recently become a global industry. Since the planning horizon for new citrus orchards is in excess of 20 years, a long range planning model was developed to aid in evaluating alternative operating strategies. This research established the interrelatedness of water, nitrogen, and phosphorous relative to the yields of Valenica Oranges, Lisbon Lemons, and Redblush Grapefruit on Rough Lemon, Sour Orange, and Troyer rootstocks. A computer simulation model was used to evaluate optimal operating policies for a variety of resource prices and market conditions. The methodology utilized in development of the simulation model was unique in that it emulates individual tree performance from the time of planting until maturation. Four operating strategies were investigated and the profit maximizing and cost minimizing strategies were found to be significant. Evaluation of market selling prices indicated that the profit maximizing strategy was optimal except at very low market prices where the cost minimization strategy was optimal. Price sensitivity for water and fertilizer resources was investigated. Operating strategies were not affected by water price increases over the foreseeable future, however, price changes in nitrogen and phosphorous were found to affect the optimal operating strategy primarily through the substitution of manure in the system. Existing horticultural practices in the Yuma growing area were confirmed by the research. Additional optimal operating strategies were suggested relative to market prices. The long run policy decision making process for orchard managers was enhanced.