Profit optimization for cattle growing in a randomly fluctuating environment

Abstract

A class of stochastic differential equation models was applied to describe the evolution of the weight of Mertolengo cattle. We have determined the optimal mean profit obtained by selling an animal at the cattle market, using two approaches. One consists in determining the optimal selling age (independently of the weight) and the other consists in selling the animal when a fixed optimal weight is achieved for the first time (independently of the age). The profit probability distribution can be computed for such optimal age/weight. For typical market values, we observed that the second approach achieves a higher optimal mean profit compared with the first one, and, in most cases, even provides a lower standard deviation.