The main objective of this study was to estimate the costs associated with different storage levels of maize for the National Cereals and Produce Board (the NCPB), the grain marketing agency of the Kenyan government. / Four storage level scenarios were considered. The first involved a zero-supply security scenario, where the model was required to simply satisfy the demand in each period. The second, third and fourth respectively, involved two, three and four months supply security scenarios, where the model was required to purchase grain equivalent to the demand for those periods. Scenario two, providing two months supply security was not discussed because it posted results similar to scenario one. The hypothesis that a stocks management model can be developed to be used by the NCPB in order to determine the optimal quantities of maize that it handles every year, while minimizing costs, was partly supported under scenarios one and three. However, despite the reduction in costs under scenario one, the lack of inventory and foreign trade was seen to increase the risks and uncertainties associated with variations in production, especially under cases of short supply. Similarly, the lack of foreign trade under scenario three was postulated to increase risks and uncertainties in periods of low production. Under scenario four, the results involved foreign trade, and inventory was positive for most years. However, these results were suboptimal and thus unreliable for policy decisions. Nevertheless, results under this scenario were very similar to the actual performance of NCPB for the period 1980 to 1990. / The results of this study show that external trade may not be the solution to a strategy of cost minimization. It was concluded, therefore, that the present strategy of self-sufficiency may be the better alternative. (Abstract shortened by UMI.)

No description available.