Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / Despite the dependence of more than three-quarters of a million households depending on cocoa for their living in Ghana, the production segment of the cocoa industry is fraught with significant challenges manifesting as low farm productivity. Various intervention programs to help farmers improve productivity at the farm level have been used over the past few decades. One of such programs is the Cocoa Abrabopa Program (CAA), which uses an integrated approach where farmers are supplied inputs made up of fertilizer, pesticides and fungicides as well as provided training and extension support services. The inputs are provided on credit and the producers repay the cost of these inputs upon selling their crop. This study sought to assess the results of the CAA in enhancing the net profits of its members over time. It used survey data collected over five years from members of the CAA program. The study used an econometric model to evaluate the demographic and production characteristics of CAA members on their net profits. The results show that male members in the CAA program had higher net profits that their female counterparts, about GHS 237.32 more. For every year increase in the member’s age, the net income increased by GHS 6.46, which was statistically significant at the 10 percent level. The crux of the study – the effectiveness of the CAA program in enhancing performance – was supported by the results. Participants who were two years in the program posted GHS 591.13 more net profit than those who were in their first year. Those who were three year and four or more years posted respectively GHS 1,211.04 and GHS 18,752.29 than those in the first year. All these were statistically significant at the 1 percent level. Thus, the CAA program is producing what it is expected to produce – enhancing the net profits of its members and doing so in higher levels with the duration of membership. The study also found that having a bank account produced a higher effect on net profits than being male, posting GHS 296.13 more net profit than not having a bank account. The econometric model specified and estimated was significant and the variability in all the independent variables in the model explained about 46 percent of the variability in net profits. The study recommends that the CAA program incorporates helping all its members open bank accounts as part of its offerings. It also recommends working with policymakers and community leaders across its operational areas to encourage investments in the education of females and elimination of the tenural rights discrimination that frequently confronts females in agriculture. It also recommends that an increased effort be made to expand membership of the CAA program to all cocoa producers in Western South because of the significant benefit of the yield effect of the region on net profit of CAA members in the region.

Master of Agribusiness / Department of Agricultural Economics / Keith Harris / Inefficiencies in a warehouse that operates multiple zones can create bottlenecks in the order fulfillment process. This study’s focuses on the exploration of potential bottlenecks in an agricultural aftermarket company’s order fulfillment process and its multi-zone warehouse. Order fulfillment includes stages of order processing, SKU picking and staging from the conveyor zone and the “H” zone, and the final packaging and shipping of the order within the Truck Freight Department. A review of the company’s EOP program, and the effects of the program, provides additional insight into our understanding of bottlenecks within a dynamic the system. In doing so, the research will extend the existing knowledge on warehouse management with multiple zones. The conclusion of this paper offers solutions that will alleviate the bottlenecks and improve the overall efficiency of the order fulfillment process within a multi-zone warehouse.

Master of Agribusiness / Department of Agricultural Economics / John A. Fox / The cost of wheat is the largest input cost for a flour mill, and as a result, profitability in wheat flour milling is determined in large part by milling efficiency – i.e., the amount of flour extracted per unit of wheat milled. In this project the objective was to quantify the influence of several measurable variables on flour mill efficiency. Data was collected from two commercial milling units of similar size. Linear regression was then used to estimate the relationship between flour yield and variables measuring grain characteristics and environmental factors. The analysis suggests that increasing ambient temperature and the occurrence of downtime both have a significant negative effect on flour yield. A significant difference in flour yield efficiency was also found between the two mills.

Master of Arts / Department of Economics / Dennis L. Weisman / The Internet is a network that consists of content providers and users connected to each other through the communication lines managed by network providers. Network neutrality rules are designed to protect independent content providers from unjust discrimination by network providers. This report explores the economic rationale for net neutrality rules, how the regulation should be enforced, and its potential effects on competition. The report finds that net neutrality encourages competition among content providers by subsidizing content provider access but concentrates the market for network providers by forcing network providers to compete primarily through price competition. It considers this to be a beneficial arrangement for economic growth, but observes that there is a potential for all sides of the market to be subsidized by advertiser fees. It also shows that despite the Federal Communications Commission's heavy involvement with network neutrality rules, these rules are actually based in a long history of antitrust regulation. It concludes, however, that the current regulatory environment is sufficient for enforcing net neutrality rules.

Master of Agribusiness / Department of Agricultural Economics / Arlo Biere / The purpose of the research reported in the thesis, here, is to quantify new value added possible in flour milling with the use of the SDmatic monitor, produced and sold by Chopin Technologies SAS. As an employee of Chopin, part of my responsibility is to market the SDmatic. The SDmatic was designed and is marketed to improve flour quality by providing automatic monitoring of starch damage in flour—damaged starch affects dough characteristics, which affects baking quality and the ideal damaged starch differs by type of bakery product. While the SDmatic is so marketed, Chopin, now, realizes that SDmatic might also benefit a flour miller by increasing operational efficiency of the mill, specifically by reducing the electrical energy used in milling. If that can be done, it would improve mill profitability, reduce energy demand and, thus, reduce the pressure on the climate and environment from energy production. To address that possibility, the thesis research studied the relationship between energy usage and damaged starch in the flour and, then, estimated the cost savings possible by using the SDmatic to mill flour to specifications most efficiently. Finally, those results were used to estimate the return on investment in the SDmatic from improved mill efficiency, alone. The research shows improvement in energy efficiency is definitely possible with better management and targeting of the level of starch damage in flour production. Such improved management is possible, today, because SDmatic dramatically reduces the difficulty and time required to measure damaged starch. Such monitoring has not been done in the past because of the cost and time involved with prior methods. SDmatic makes that possible and cost effective, now.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The literature shows that increases in incomes lead to changes in the allocation of income or expenditure shares to different food products. The purpose of this thesis is to identify the effect of income on expenditure share allocations among different food groups. The study was particularly interested in beans and how changes in incomes affect the share of bean expenditures. We used data from the 2010 Zambia Living Conditions Monitoring Survey (LCMS). The LCMS covers the whole country and provides segmentation of the respondents, across the region and rural versus urban. It also provides detailed information on the income and expenditure distributions of respondent households. This allowed for the achievement of the overall objective of this thesis: understanding how beans and other food products responded to income changes as well as other demographic and socio-economic variables. The food share is the proportion of total household income that was allocated to food. The results show that food averages about 40% of income but varied significantly across the four income groups. It was 92% for those earning less than ZMW300 per month and 37% for those earning between ZMW300 and ZMW750 per month. It was down to 22.6% for those earning between ZMW750 and ZMW2.1 million per month had a food share of total income of only 10.8%, similar to the average U.S. consumer. These averages were found to be statistically different across the income groups. We found that Zambians allocated about 40% of their food expenditure to cereals compared to 5% to pulses and 3.5% to beans. They allocated a higher proportion of their food expenditure to fruits and vegetables than to beans and/or to pulses. This shows that legumes are very low on the food hierarchy in Zambia. However, across income categories, it was found that consumers in the second income group (ZMW300 and ZMW750 per month) allocated the most of their food expenditure to beans, about 3.9%, while those in the highest income group (ZMW750 and ZMW2.1 million per month ) allocated the least, about 3%. The biggest influencing demographic factor for pulses and beans’ shares of food expenditure was locale, with urban consumers having about 1.1 and 0.8 percentage points higher share of food expenditures allocated to beans than rural consumers. The respective t-values were 15.58 and 16.96. All the demographic and socio-economic variables were statistically significant at or below the 5% level. There was no difference between the allocation of people in the highest income group and those in the lowest income group. The results suggest that if the long-term objective is to reap the nutritional benefits of beans, there may be value in focusing on two principal policy variables: education and income enhancement. However, because education is correlated with income, the benefits of undertaking this policy initiative would more than benefit the bean consumption. It should unleash across the economy a more productive workforce that understands the health benefits of its food choices.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / Order picking errors have an adverse effect on performance because they contribute to lost time, resources and customer loyalty. Therefore, it is imperative that organizations reduce errors as much as possible. However, organizations cannot effectively reduce errors until they understand the factors that determine and influence them and can isolate the sources of those errors. Product distribution at Frito Lay is very critical in the supply chain activities of the company and understanding and managing the level of errors that occur at the distribution phase of operations is critical for the firm’s long term sustained competitiveness. This study examines Frito Lay’s order filling processes and how order volumes affect the level of errors. The company uses two types of order picking technologies: prepick and bulk order, conventionally also known as pick-to-light and voice-pick technology respectively. The main objectives of the study are: (a) to examine the impact of size of volume processed at the distribution center on errors recorded for each order pick technology and (b) the impact of regional and seasonal differences across Frito Lay’s distribution network. The data pertaining to pre-pick volume, pre-pick error, bulk volume and bulk error were collected for ten consecutive quarters time period ranging from first quarter of 2009 to the second quarter of 2011 and across 16 divisional distribution centers in four regions of the U.S. The data were organized into a panel for analyses using Stata® 12.1. With no a priori foundation for choosing any particular structural equation form, a number of structural equations were estimated and compared to consistency with economic theory and internal consistency. Two different sets of models were estimated: one for each technology. The regression results from the analysis from the pre-pick order picking technology models showed the quadratic model was the “best” model, whereas the linear model turned out to be the “best” structural form for bulk order picking system. This research provides valuable information to management in attempt to address errors in the order fulfillment system. Because errors may be human, and these human errors may emanate from lack of knowledge or poor skills, they can be addressed with training and education. The human errors may also be a result of processes in the plant. These could be addressed by the reconfiguration of processes and educating people about those processes. Finally, the errors may be motivational, leading to poor focus in executing responsibilities. To address these types of errors, management may choose to implement both positive and negative incentives. Positive incentives will provide rewards to employees who meet error reduction targets that are established at the beginning of certain periods. Negative incentives may include penalties for exceeding pre-specified error thresholds. The Frito Lay system would benefit more from this research if the data had included human resource demographic data as well as economic information. It would have allowed the research to estimate the effect of errors on the economic performance of the different distribution centers and help determine the economically optimal level of errors at the different centers.

Master of Agribusiness / Agricultural Economics / Vincent R. Amanor-Boadu / The rapidly changing economic environment in the Democratic Republic of Congo (DR Congo) offers significant opportunities for businesses. The food and agribusiness sector is one of the major opportunities for growth given that increasing incomes are going to enhance the food and nutrition security needs of an increasing segment of the population. Animal protein in the form of chicken meat and eggs are relatively inexpensive and offer an opportunity for entry and differentiation in a markets located in DR Congo’s largest cities of Kinshasa and Kananga. This thesis uses the case of Z-CO Farm in DR Congo to explore the strategic opportunities for small-scale egg production in a low-income but growing country. Having been in operation for a number of years, Z-CO Farms has been producing chicken eggs for the general consumer market. This thesis explores the opportunity to differentiate the market that Z-CO Farms targets with the view to enhance its competitiveness, expand the market boundaries and create new value for customers that produce significant rewards. The off-take for the project is the creation of Blue Ocean markets for chicken eggs in a market that is increasingly exposed to food safety risks by assuring consumers a safe product. This project, when implemented, would be the first in DR Congo. However, would it be profitable? Under what conditions would it be profitable? We employ three primary methods to answer the foregoing questions. First, we evaluate the literature and the available secondary data. Second, we use an economic and financial model to develop the foundation for conducting the analyses for assessing the feasibility of building a small-scale table egg production system to address the emerging higher income consumers in DR Congo. We draw on the blue ocean strategy eloquently presented by Kim and Mauborgne for insight and guidance in building a unique product and service offering for the identified markets in Kinshasa and Kananga. We assess four strategies: the base scenario of the current market conditions where Z-CO maintains its commodity red ocean engagement in the market; innovating its feeding program for the birds; pursuing a market segmentation program whereby it offers high value food safety value proposition to the middle and upper-middle class of consumers; and a combination of a feed innovation and market segmentation initiative. The results show that while the first two strategies returned a positive net present value (NPV) in Kananga, they failed in Kinshasa. This is because of the level of competition in Kinshasa compared to Kananga as well as the cost of operations in the two locations. The results also show that while the remaining two strategies were profitable in both markets, they offered higher NPV and internal rates of return in Kananga than in Kinshasa. The best outcome in operating in both cities involved the fourth strategy, producing a combined NPV of about $493,867. The principal driver for this superior performance in Kananga is cost of feed. There is, therefore, value in thinking about how to leverage this cost advantage in Kananga to enhance the profitability in Kinshasa because of the population and income advantage in the latter. The study provides insights for the management of Z-CO to pursue their future investment planning and in selecting the locations and size of their operations to maximize their NPV and IRR. It also identifies the principal sources of risks that Z-CO’s management must avoid or effectively manage to achieve their desired business outcomes.

Master of Regional and Community Planning / Department of Landscape Architecture/Regional and Community Planning / John W. Keller / During the Industrial Revolution, economist Alfred Marshall published his classic book entitled Principles of Economics, in which he suggests that the external economies of scale (positive externalities) produced by the clustering of many small innovative businesses could rival the internal economies of scale achieved by a few large vertically-integrated businesses. The distinction between these two models of industrial organization, one based on many small innovative firms and the other based on a few large conglomerated firms, is the basis of cluster development theory. This distinction has been further developed in the economic development literature through the significant contributions of Schumpeter (creative destruction), Jacobs (necessary inefficiency), and Porter (diamond model). Modern cluster development theory expands upon the work of these classic theorists. Contributions relevant to this study include Markusen’s cluster typologies, Press and Feldman’s cluster lifecycle phases, Munnich’s rural knowledge cluster framework, and Doloreux’s case study of a rural innovation system. This case study applies the lessons of cluster development theory to an emerging cluster of businesses in Wamego, Kansas that share the common Wizard of Oz theme. While this cluster is not a “traditional” cluster (it does not benefit from positive externalities relating to product or process), it does create positive marketing externalities that significantly affect the local economy. This report names the cluster (Oz Cluster), identifies the typological structure of the cluster (hub and spoke), profiles the key actors and decisions which are shaping this emerging cluster, and concludes with lessons learned from the Oz Cluster and alternative scenarios for further cluster development. The Oz Cluster model of economic development demonstrates how communities can profit from niche-based tourism. Such economic development must focus on the establishment and growth of regionally competitive businesses with strategic competitive advantages. Alternative scenarios for further cluster development include: 1) expand the Oz theme; 2) diversify the cluster; and 3) maintain current level of success.

Master of Agribusiness / Department of Agricultural Economics / Arlo Biere / The objective of this thesis is to examine the factors that a producer will want to consider when choosing the milk cooling and storage system for the dairy farm. The two systems studied are the traditional, on-farm, bulk tank system and the more recently developed, direct tanker loading system that uses glycol chilling plates. As a long-term investment, the choice of the refrigeration and storage system will have an impact on at least four dimensions of the dairy business. The capital cost of the milk cooling/storage system can range from 2% to 5% of the total capital investment in the farm. Milk cooling costs can also account for as much as 25% of the farm’s total electric costs. The system selected can also have an impact on the hauling charges and the hauling charges can account for as much as 10% of the dairy’s gross revenue. Lastly, the storage system selected may influence the range of markets available to the producer as not all processors accept milk from farms using direct tanker loading. Using an economic engineering approach, three hypothetical farm sizes were considered: milking 700, milking 1,400, and milking 2,100 cows. Capital and operating cost data were collected from three major dairy equipment manufacturers that service the Upper Midwest. Capital expenses for each size farm were priced for conventional bulk tanks and then also priced for glycol plate chiller systems that load directly into tanker trailers. The comparison of annualized costs of ownership for all three farm sizes shows only minor differences in the two systems. For the 700 cow farm, a direct tanker loading system saved 0.24% over the total capital investment; for the 1,400 cow farm, a direct tanker loading system saved 0.97%; and for the 2,100 cow farm, a direct tanker loading system saved 1.19%. Thus, differences in hauling charges, which will vary with each situation, become critical to the choice. Because the overall cost of the two systems are so close, one can expect that the peripheral and non-economic issues may be much more influential on each producer’s decision. Given the known differences in hauling charges, one can conclude that for the 700 cow farm, conventional tanks would be the preferred choice. For the 1,400 cow farm and the 2,100 cow farm, the determining factors come down to the differences in hauling charges and long-term goals for the farm business.