Awais Model Farms: Crop Decision

THE CONTEXT

Saeed Anwar, the sole proprietor of Awais Model Farms (AMF), had to decide whether to grow corn or cotton in the fall season. Although he knew the key parameters affecting the decision, he was not able to reach any conclusion because of the numerous uncertainties involved in the decision-making process. His son, Awais Saeed, tried to come up with an Excel model to help his father make the decision. Awais discussed the key uncertainties with experts (farmers) and gathered all the cost and revenue data. The decision maker, Saeed Anwar, wanted to ascertain which crop he should grow on the basis of greater expected profit.

THE DECISION

One fine evening in July 2014, Awais’s father Saeed Anwar was discussing at his dera which crop should be cultivated in the fall season. Saeed had already grown vegetables on 50 acres of his agricultural land, but he was unclear if he should grow corn or cotton on the remaining 50 acres. Some farmers had advised him to grow cotton because it gave higher profits; others suggested corn as it was less sensitive to weather conditions. Although Saeed had a long experience of farming, each time he faced a situation like this it confused him. Awais, an undergraduate management science student, offered to help his father make the right decision. Awais Model Farms (AMF) was located in Burewala, a small but important agricultural city in Punjab, Pakistan. AMF specialised in growing potatoes, wheat, rice, cotton, peas, tomatoes and corn. The farm produced high crop yields, which made it one of the most notable in the region. AMF had an operating profit of around PKR 75 lacs for the year 2013 and a net profit margin of 42.5 percent. Burewala was located in the temperate zone where the climate was generally arid, characterised by hot summers and cool winters. The temperature ranged between 42°C and 24°C in the fall. These temperature variations made heat-sensitive crops vulnerable to yield losses. In the monsoon season, there was heavy rainfall in the area. For the past half a century, no major flood had been reported in the region of Burewala.

Reference

Chatha, K.A., Talat, Z., Naeem, A., & Shaikh, S. (2018). Awais Model Farms: The Crop Decision. Asian Journal of Management Cases, 15(2), 110–116.
doi: 10.1177/0972820118780738

About the Author:

Kamran A. Chatha is Associate Professor at the SDSB. He teaches courses in operations strategy, supply chain management, project management, and decision analysis. He is the programme director for the executive programme on Roadmap to Manufacturing Excellence at the Rausing Executive Development Centre. His research interests include enterprise modelling, complex organisation design, business process development, and simulation modelling. His research has been published in the International Journal of Production Economics and International Journal of Operations and Production Management.

Email: kamranali@lums.edu.pk