Effective Cost Allocation in Agricultural Production Systems Using Absorbing Markov Chains and Bankruptcy Rules

Agricultural production systems are frequently affected by uncertainty, processing cycles, quality variability, and irreversible losses, leading to discrepancies between planned and actually available operational resources. This study proposes an integrated framework combining absorbing Markov chains and bankruptcy allocation theory to address endogenous scarcity in stochastic production systems. The production process is modeled using an absorbing Markov chain, where transient states represent operational stages and absorbing states represent successful completion or irreversible loss. The fundamental matrix is used to estimate the effective expected resource availability induced by the stochastic dynamics of the system. When this availability is insufficient to satisfy nominal operational requirements, the problem is reformulated as a bankruptcy allocation problem. Four classical allocation rules are evaluated and compared: proportional, constrained equal awards, constrained equal losses, and the Talmud rule. A stylized cocoa production system illustrates the proposed framework. The results show that the constrained equal awards and Talmud rules better preserve operational continuity under scarcity conditions. The main contribution lies in linking stochastic production modeling with normative resource allocation under endogenous scarcity.

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Publication Details

Journal
Mathematical and Computational Applications
Published
2026-06-24
DOI
https://doi.org/10.3390/mca31040112
Primary Topic
Supply Chain and Inventory Management
Type
article
Field-Weighted Citation Impact
0.00

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article

Effective Cost Allocation in Agricultural Production Systems Using Absorbing Markov Chains and Bankruptcy Rules

Manuel J. Campuzano, Rick K. Acosta-Vega, Samuel Alvarez-Cayón
Mathematical and Computational Applications
Supply Chain and Inventory Management
article

Effective Cost Allocation in Agricultural Production Systems Using Absorbing Markov Chains and Bankruptcy Rules

Manuel J. Campuzano, Rick K. Acosta-Vega, Samuel Alvarez-Cayón
article en

Abstract

Agricultural production systems are frequently affected by uncertainty, processing cycles, quality variability, and irreversible losses, leading to discrepancies between planned and actually available operational resources. This study proposes an integrated framework combining absorbing Markov chains and bankruptcy allocation theory to address endogenous scarcity in stochastic production systems. The production process is modeled using an absorbing Markov chain, where transient states represent operational stages and absorbing states represent successful completion or irreversible loss. The fundamental matrix is used to estimate the effective expected resource availability induced by the stochastic dynamics of the system. When this availability is insufficient to satisfy nominal operational requirements, the problem is reformulated as a bankruptcy allocation problem. Four classical allocation rules are evaluated and compared: proportional, constrained equal awards, constrained equal losses, and the Talmud rule. A stylized cocoa production system illustrates the proposed framework. The results show that the constrained equal awards and Talmud rules better preserve operational continuity under scarcity conditions. The main contribution lies in linking stochastic production modeling with normative resource allocation under endogenous scarcity.

Mathematical and Computational ApplicationsVol. 31(4)
University of Magdalena (CO)
Universidad del Magdalena
Zero hunger
Openalex Percentile: Top 5%
Supply Chain and Inventory Management
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