Agroindustrial project analysi

AN OVERVIEW 5ing factory must contend with a supply-and-demand imbalanceand problems of inventory management, production scheduling,and coordination among the production, processing, and marketingsegments of the farm-to-consumer chain.PerishabilityUnlike the raw material used in nonagroindustries, biological rawmaterials are perishable and often quite fragile. For this reason,agroindustrial products require greater speed and care in handlingand storage, which can also affect the nutritional quality of foodproducts by reducing the damage or deterioration of the raw material.VariabilityThe final distinctive characteristic of agroindustries is the variabilityin the quantity and quality of raw materials. Quantity isuncertain because of weather changes or damage to crops or livestockfrom disease. Quality varies because standardization of rawmaterials remains elusive, even though there have been advancesin animal and plant genetics (this is in sharp contrast to the extensivespecifications for standard materials used in other manufacturingindustries). These variations exert additional pressure onan agroindustrial plant's production scheduling and quality-controloperations.In addition, two other characteristics should be emphasized, althoughthey are not unique to agroindustries. The raw materialin agroindustries is usually the major cost component. Thus, procurementoperations fundamentally shape the economics of theenterprises. Many agroindustrial products are also necessities, andgovernmental interest and involvement in agroindustrial activitiesconsequently will often be high, thereby making social, economic,and political considerations particularly relevant to project analysis.A Force for DevelopmentAgroindustry contributes significantly to a nation's economic developmentfor four reasons. First, agroindustries are a nation'sprimary method of transforming raw agricultural products into