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Professor Tava Olsen (University of Auckland): Modelling Contracts and Incentives in Agricultural Cooperative Supply Chains

Tuesday, 23 May 2017
12:00 to 13:00
Room 452, Durham University Business School

In agricultural marketing co-operatives (co-ops), a group of farmers, or growers, collaborate under a single cooperative organizational structure to process and market their products.

The trade-offs faced within the supply chain are often different to those faced by traditional investor-owned firms. For example, most co-ops pledge to take all product produced by farmers, rather than being able to place specific orders with suppliers. Further, operational and financial decisions become inseparable because capital investment decisions are linked to the co-op's economic transactions with its members. This is particularly true for so-called proportional investment co-ops, where farmers' equity is required to be in proportion to their patronage. That is, farmers who supply a greater quantity of the given product are required to supply a proportionately higher amount of equity for the co-op. Supply yield uncertainty adds another dimension to the difficulty of coordinating the supply chain. In this talk we consider contacts and incentives in the agricultural supply chain. We present two specific models. The first is a game-theoretic model when farmers’ efforts lead to higher quality. The second is a Markov decision process wherein the decisions of processing quantity interact with the financial decisions of retained earnings and short term loans.

Speaker bio
Professor Tava Olsen is the Ports of Auckland Chair of Logistics and Supply Chain Management and the Director of the Centre for Supply Chain Management at the University of Auckland Business School. Prior to joining Auckland, she was Professor of Operations and Manufacturing Management in the Olin Business School at Washington University in St. Louis, which she joined after serving as an Assistant Professor in the Department of Industrial and Operations Engineering at the University of Michigan, Ann Arbor. Professor Olsen received her B.Sc. (honours) in Mathematics from the University of Auckland and her Masters in Statistics in 1992 and Ph.D. in Operations Research in 1994, both from Stanford University. Professor Olsen’s research interests include supply-chain management; pricing and inventory control; and stochastic modelling of manufacturing, service, and healthcare systems. Professor Olsen is currently an Associate Editor for Management Science, Operations Research, and Manufacturing and Services Operations Management (M&SOM), is a senior editor of Production and Operations Management, and is the Topical Editor for Supply-Chain Management for the Wiley Encyclopaedia of Operations Research and Management Science. She is a past president of the Manufacturing and Service Operations (MSOM) society and has been awarded the Auckland Business School’s sustained research excellence award. Among other journals, her publications have appeared in Management Science, Operations Research, and M&SOM. She has a GoogleScholar h-index of 22. Professor Olsen has been awarded over $2 million dollars of external funding over her career, including being a recipient of the prestigious NSF CAREER award and RSNZ Marsden grant.

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