AN OPERATIONAL APPROACH TO CROP FORECASTING

1. INTRODUCTION It is a strange coincidence that my first and almost last consultancy assignment happened to be in the same area mentioned in the title of this paper. Year 1957 I had just joined Hindustan Lever Ltd (HLL) as a covenanted manager to set up first ever Operations Research Department not only in HLL but also in the entire Indian industry. In the first briefing meeting with Mr. Prakash Tandon, the then Co-ordinating Director to whom I was reporting, Mr. Maurice Zinkin, the then Foods Marketing Director, and Mr. David Orr, the then Soaps and Detergent Marketing Director, I was given the following brief: Vasant, we spend over 40% of our sales revenue in buying oils and oilseeds (mostly groundnuts) for both our vanaspati and soaps businesses. Size of the crop and its subsequent movement from the farmers to the traders and oil-mills affects the pricing pattern. The price not only depends on the size of the crop but also on its movement in the market and market sentiment. The government conducts scientific crop cutting experiments to forecast the crop size, but even to get preliminary results we have to wait for one year. The entire crop is sold within a few months of the harvest. We have to buy the products when prices are lowest, so that our average purchase price is within reasonable limits. Can you help us to devise an operational method of estimating the crop size even before the crop is fully harvested, so that we can take timely decision as when and how much to buy. Year 2000 My statistician friend and colleague working for Jain Irrigation Systems Ltd (JISL), approached me and told me that Mr. Bhanvarlal Jain, the Chairman of the group would like to meet me in Jalgaon, Maharashtra, where their plant and head office is located to discuss certain issue concerning their operations. I met Bhanvarlalji and he said: Dr. Patankar, you are a management consultant with OR cum statistics background. I want your help in solving our problem. We have just entered the food processing business with export in mind. Our key concern is the judicious purchase of our raw materials, which are subject to high price fluctuations, not only year-to-year but also and more so within a year. Can you help us develop an operational method of crop forecasting so that we can project the likely price pattern in the future? We are interested to begin within two crops: white onions and mangoes.

What Methodology should Dr. Patankar follow to forecast supply requirement of this company?