Evaluation of break-even point and gross margin economic risks in producing winter oilseed rape
¹Czech University of Life Sciences Prague, Faculty of Engineering, Department of Machinery Utilisation, Kamýcká 129, CZ–16521 Prague 6 – Suchdol, Czech Republic
²Union of Oilseeds Growers and Processors, Na Fabiánce 146, CZ–18200 Prague 8–Březiněves, Czech Republic
*Correspondence: mimra@tf.czu.cz
Abstract:
The economic result of growing winter oilseed rape is influenced by a number of variables, such as natural influences, input prices and the used technology. One of the ways to improve the business’s profitability is to use the experience and knowledge provided by consulting companies. This paper analyses two data series covering the period of 5 to 10 years regarding specific selected key parameters for companies using the counselling services of the Union of Oilseeds Growers and Processors in Prague (UOGP) and some other companies that make no use of these services (OTHERS).
For the selected key parameters, the risk analysis of reaching the gross margin and the break-even point was conducted with the aid of the Monte Carlo stochastic simulation method. The results of the calculations show that the companies using UOGP consulting achieve on average, at the same level of risk, a gross margin higher by 30% and their break-even point is lower by 11%. Taking advantage of the knowledge and services provided by a consulting company has positive economic benefits, and it increases the competitiveness of companies.
Key words:
counselling and consulting services, Monte Carlo method, risk analysis