Costs, Risks, And Contracting Strategies For European Union Traceability Requirements

Topics:
Outsourced Services
Tags:
European Union,
Integrator,
Management,
Strategy,
Testing Strategy
Source:
North Dakota State University

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Overview: A stochastic simulation was developed to determine the marginal cost and a testing strategy (test location and test intensity) for an integrator conforming to the European Union traceability. Integrator's cost, the United States' risks, and premiums were determined for export of non-genetically modified (non-GM) wheat from the United States to Europe. The optimal testing strategy is the one that maximizes utility of the integrator's costs. Cost components include certified seed, certification and auditing, testing, traceability, quality loss, cost differential between GM and non-GM products, and a risk premium. Adventitious commingling is defined stochastically. Results indicate that traceability requirements can be conformed to with reasonable buyer and seller risk at a total cost in the area of 169 cents (c)/non-GM bushel.

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Format: PDF | Size: 475KB | Date: Aug 2004 | Pages: 122

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