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Grain forecast refers to prediction of grain supply from the crop production. It involves monetary policy and analysis of market structure regarding selling and profit earning capacity through crop production. The present is based upon case study of Western Australian crop condition which is affected by frost. Moreover, the study covers microeconomics concept to identify financial situation that includes different policies related to overcome the issue. In addition to this, market structure and factors which put a direct impact on production and distribution of grain has been understood here.
Western Australian crop industry provides grain to UK and in the global market. At present, grain industry association is suffering from imbalances in production of crop due to spring frost (Clark, 2013). Therefore, economic theories can be applied to balance the production system such as business model, decision theory and new growth theory to implement productivity and profitability of grains. Some of these theories are explained as below:-
Decision Theory: It is a disciplinary concept to analyze the best decision for business organization. Under this theory, manager of grain industry can forecast further activities through applying strategic plans. It involves two tools to make decisions to solve the issue. These are normative and descriptive decision theories. Here, normative decision theory is related to recognition of the best decision (Gillingham and Palmer, 2014). It sets target to determine tools and methods for future development. Similarly, descriptive theory involves assumptions on the basis of which structural framework is prepared with description to reach the set target.
Real Business Cycle Theory:Different changes occur in business organization which are needed to be resolved. Under the same, decision maker prepares plans for bringing effectiveness in the entity. It aims to get constant growth in productivity and profitability. Moreover, government policies like fiscal and monetary plans affect the financial position of firm. Further, increase in interest as well tax rates reflects the economic position negatively. While on the other hand, decrease in rates influences monetary profile of grain industry. Hence, on the basis of these assumptions, crop production can be improved. It is helpful to prepare strategic plans and following action activities to bring efficiency in distribution of grain.
On the basis of recognition of past months, production manager of crop industry plans to apply both the above mentioned theories so harvesting can be done effectively. It proceeds to gain effective production of crop effectively to sustain organization's position in the market (Henderson, 2014).
Western Australian crop is affected due to frost in the state. By comparing current production from the last months, it flows in downward direction. By analyzing present situation, it is determined that current crop production is decreased by 11% as comparison to past month's production. Further, determined production situation indicates 17% down position in comparison to August month's forecasting due to spring frosts (Government of Western Australia, 2016). Therefore, the present situation of Australian crop production is reduced because of spring frosts in September and October. On the behalf of assumptions, grain industry association sets target to complete harvesting which will result in increasing the production (Luther and Cohen, 2014). Thus, organization aims to reach 9.04 million tons of white crop which is lower than last year's target of 9.2 million. While on the other hand, predicts to achieve 2.7 million tons which is 17% lower than forecasting of last month.
Decision maker of grain industry aims to apply decision theory and real business cycle theory to implement production of crop especially white crop and grains (Pensini, Rasmussen and Kempton, 2014). So, strategies are prepared for example, using technological ideas for developing grain production, completion of harvesting, utilizing good quality of seeds, management of adequate water for effective crop quality, etc. Thus, it is expected to reach the target with support of strategic ideas . Further, decision maker analyses action planning and its implementation to improve the productivity of crop.
Thus, on the basis of forecasting, decision maker predicts to gain 9.04 million tons of wheat crop and 2.7 million tons production of barley. Therefore, it can be said that production of both remains downwards. According to GIWA report, it has been analyzed that effect of frost would not be overcome till the harvest is completed. Therefore, current market position of grain production is analyzed to be lower level.
By applying both theories; decision and real business cycle theory, analyzer identifies current market situation of wheat and barley production. Effect of decision theory application presents effective decisions for increasing in productivity of grain as well as reduction of frost impact through completion of harvesting effectively (Zhang, Chen and Li, 2015). Hence, proper growth is achieved in production and distribution of crop. Moreover, adoption of changes like technological and operations of harvest activities remain effective to increase the efficiency of grain industry. Similarly, market structure is determined to be effective in as proper balance is created between production and supplement of crop. It is considered that distribution of crop increases in the UK market same as in global market. However, proper balance is created between export and import of grain. It is also beneficial for the economic growth of nation.
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The report has concluded that application of economic theories such as decision theory and business cycle play a great role in increasing the production of crop. Effective harvest and using qualitative seeds for crop increases financial profile of the firm. Moreover, proper management planning is recognized to influence the productivity and profitability of grain. Along with that manager of Australian crop production prepares strategic plans for effective balance between export and import activity is determined. Including this, various effective ideas are generates for applying economic theories are analyzed to increase production of crop effectively.
Books and Journals
Clark, J. B., 2013. Essentials of economic theory. Ludwig von Mises Institute.
Gillingham, K. and Palmer, K., 2013. Bridging the energy efficiency gap: Insights for policy from economic theory and empirical analysis. 7(2). pp.78-98.
Gillingham, K. and Palmer, K., 2014. Bridging the energy efficiency gap: Policy insights from economic theory and empirical evidence. Review of Environmental Economics and Policy. 89(5). pp.90-123.
Gohari, A. and et.al., 2013. Climate change impacts on crop production in Iran's Zayandeh-Rud River Basin. Science of the Total Environment. 442(6). pp.405-419.
Henderson, J. V., 2014. Economic theory and the cities. Academic Press.
Luther, W. J. and Cohen, M., 2014. An empirical analysis of the Austrian business cycle theory. Atlantic Economic Journal. 45(2). pp.153-169.
Pensini, A., Rasmussen, C. N. and Kempton, W., 2014. Economic analysis of using excess renewable electricity to displace heating fuels. Applied Energy. 131(2). pp.530-543.
Zhang, H., Chen, Y. and Li, T., 2015, May. Research of cigarette sales quantity forecast based on multiple linear regression model. In Emerging Economies, Risk and Development, and Intelligent Technology: Proceedings of the 5th International Conference on Risk Analysis and Crisis Response. 9(5). pp.180-187.
Government of Western Australia. 2016. [Online]. Available through: <http://www.dsd.wa.gov.au/about-the-state/quality-of-life/economy>. [Accessed on 11th January 2017].