Value-at-Risk in Bakery Procurement
This case study applies value-at-risk methods to a bread baking company to illustrate how it can be used by a commodity processor in reporting risk, evaluating risk reduction alternatives, and setting risk limits. Results indicate that value-at-risk can be a useful tool for managing the price risk exposure in this agricultural processing firm. It provides a single measure of risk exposure and accounts for the multitude of inputs that are correlated and impact the firm's risk. Value-at-risk provides an effective tool in setting risk limits, but should be complimented with management goals, competition, and conduct within the industry. Copyright 2007 American Agricultural Economics Association
Year of publication: |
2007
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Authors: | Wilson, William W. ; Nganje, William E. ; Hawes, Cullen R. |
Published in: |
Review of Agricultural Economics. - American Agricultural Economics Association. - Vol. 29.2007, 3, p. 581-595
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Publisher: |
American Agricultural Economics Association |
Saved in:
freely available
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