Use of Simulation in Evaluating Management Policies under Uncertainty: Application to a Large Scale Ranch

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Abstract
Price and weather environment and decision-making processes are simulated for a large California range-feedlot operation; then DYNAMO programming is used to write the equations and to obtain the equivalent of 400 years of data by simulations on an electronic computer. Formulation of expectations of prices are the main managerial policies tested in the article, but the technique has broader applications to policies and decision making under uncertainty. A comparison among simulated net incomes is made over the period 1954–1963. It is concluded that relatively naive price forecasting methods are sufficiently accurate for the feeder buying decision considered here.