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3747. Optimal floor price for e-auction of a seasonal crop
Invited abstract in session WC-18: Facilities Routing and Planning in Developing Countries, stream OR for Development and Developing Countries.
Wednesday, 12:30-14:00Room: 42 (building: 116)
Authors (first author is the speaker)
| 1. | Sundaravalli Narayanaswami
|
| IIM Ahmedabad |
Abstract
A Miniratna company of the Government of India, under the Ministry of Textiles (ministry, henceforth) has been serving in the field of marketing of cotton for last five decades. As a sovereign function of Government of India, the organization undertakes Minimum Support Price (MSP) operations to safeguard the cotton farmers from any distress sale and offers its cotton stocks through e-auction on regular basis to meet out the demand of quality cotton to domestic textile Industry at competitive rates. In this paper, an objective model to decide the variety-wise optimal floor price of daily e-auction of cotton is developed and presented. Before the model was proposed and developed, a team of subject matter experts and top management of of the organization considered the (i) variety-wise prevailing prices of cotton in Indian market, (ii) general price behaviour of international market and (iii) previous days’ variety-wise sale rates over & above the floor price and decided the floor price for daily auction. The organization currently uses the optimal floor pricing model to scientifically determine the floor price for the 15 odd cotton varieties grown in India and traded globally in the e-auction mode.
Keywords
- OR in Agriculture
- Practice of OR
- Problem Structuring
Status: accepted
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