STOCHASTIC-COMPUTERIZED-ACTIVITY-BUDGETING FOR SHEEP ENTERPRISES

Queensland Department of Primary Industries and University of Queensland Stochastic-computerised-activity-budgeting (SCAB) facilitates and extends the traditional gross margins analysis for sheep activities. SCAB is one of the very few computerised management aids so far developed for Australian farm management situations. In the deterministic mode SCAB calculates gross margins based on point estimates of all the relevant parameters. In stochastic mode it generates a distribution of pay-offs (gross margins) based on the manager's subjective probability distribution for the relevant major uncertain paramaters. The variance of this distribution of pay-offs represents a measure of the risk associated with the activity given the manager's current knowledge and expectations.