Modelling of investment decisions on technical support of agricultural enterprises

Abstract

Introduction. Limited availability of machinery for agricultural enterprises, as well as the high intensity of its use, is accompanied by a decrease in investment activity in the agricultural sector. This necessitates a rational choice of suitable source of investment for technical upgrading and minimising of investment costs of business entities. The purpose of the article is modelling of making optimal decisions in the process of investing in technical support of agricultural enterprises under the conditions of their limited access to investment resources. Results. The authors of the article have developed a dynamic economic and mathematical model to optimise investments in the renewal of existing facilities at agricultural enterprises. The use of this model will facilitate further rationalisation of economic decision-making on the allocation of investment resources through time. The study was conducted in respect of investments in the purchase of beet harvesters that would be used in the area of 2,000 hectares. The possibility of buying the Ukrainian machinery as well as the equipment of foreign production was considered. The problem can be solved by means of four optimisation criteria: 1) minimum cost of the investment project on the purchase of equipment; 2) minimum cost of the project including operating costs with the use of equipment; 3) minimum cost of the project in terms of investments which should be taken from external sources when using depreciation deductions for the investment; 4) minimum cost of the project in terms of investments which should be taken from external sources when using depreciation deductions for the investment and taking into account operating costs. According to the criteria of optimisation, the authors have developed the best plans of investment by the years of the investment project. It has been found that, based on the criterion of cost minimisation, buying of different types of machinery made in Ukraine is preferred despite its lower productivity. We determined that the possibility of taking into account operating costs in cash flows does not change the final optimal structure of the planned number of machinery, affecting only the total cost of the investment project - USD 326,400 and USD 620,100. In the first case, the optimal investment plan provides for the purchase of all machinery during the first year of the project; the second case covers a period of four years. The budget of capital investment reduces the implementation of the investment project due to the accumulation of external resources - USD 244,800 and USD 538,500 with or without operating costs, respectively. For these two alternatives, a minimum value of the investment program is also achieved when buying machinery only of the Ukrainian production. Moreover, the need to take borrowed funds occurs only during the first year of the project, in the amount of USD 244,800 in both cases. Conclusions. This economic and mathematical model allows agricultural enterprises to establish investment volumes needed for the purchase of any particular type of equipment for agricultural production. Choosing the most appropriate source of investment can minimise investment costs and establish a rational investment portfolio under certain requirements and restrictions. This will allow agricultural enterprises to plan investments in the renewal of their facilities with regard to the production by the best option, given the productivity of agricultural machinery and the planned sowing areas. У статті розроблено динамічну економіко-математичну модель оптимізації інвестування технічного забезпечення аграрних підприємств. Визначено отримані альтернативні варіанти реалізації інвестиційного проекту, що оцінюються за чотирма критеріями оптимізації. Застосування запропонованої моделі дає змогу аграрним підприємствам оптимізувати прийняття господарських рішень щодо розподілу в часі інвестицій у придбання будь-якого окремого виду техніки для виробництва сільськогосподарської продукції та обрати найбільш прийнятне джерело інвестування, що, при дотриманні певних вимог і обмежень, дозволяє мінімізувати інвестиційні витрати та сформувати раціональний інвестиційний портфель.