Research on the Management Strategy from the Perspective of Profit and Loss Balance

Abstract

The management of pig farms is an issue with the actual background, to improve the profitability, there is an urgently need for farms to optimize the business strategy. This paper aims at pig breeding management issues, using break-even analysis, multivariate statistical analysis and condition forecasting method to establish the model of profit and loss balance. Through the analysis of reserving quantity, breeding time and other indicators, this paper calculated the average litter size per sow per year under the balance of profit and loss, the number of piglets selected as breeding pigs and the number of female pigs kept. According to the price prediction curve, with the principle of no loss, this paper obtained the maximum profit under the conservative business strategy. Besides, sensitivity analysis was carried out under different confidence levels of the forecast pig selling prices, and the management strategies for farmers with different risk preferences were worked out.

Keywords: Business Strategy, Break-Even Analysis, Pig Breading, Sensitivity Analysis.