Simulating Demand for Rice in Owode Market, Offa L.G.A Kwara State
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Date
2013
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Publisher
Pakistan Society for Business and Management Research
Abstract
Estimating the optimal weekly demand (purchase) of rice in any market is one of the fundamental tasks in determining how much product should be purchased weekly and the expected value. Rice, one of the foods consumed which used to be a food of the highly privileged one before but occasionally consumed during important festivals by the less privileged ones some years ago has become a stable food that is consumed by almost all the households in Nigeria today. Its consumption is so high to the extent that the locally produced ones cannot meet the demand of the teeming population. Reports have it that the country spent a lot of its hard earned foreign reserves to import rice in order to meet the increasing domestic demands for it. Nigeria consumes 5.4 million MT of rice annually with #600 billions of which 1.6 Million MTS are imported. Nigeria is the largest importation of rice in the world, buying at least 2 million metric tones per year from exporting countries like China and Thailand, yet Nigeria fertile land and rich agro climate conditions could easily produce rice to feed the entire country and generate surplus for the region (USAID). According to This Day News Paper of 17th December, 2012, the Federal Government disclosed that $150 billion will be spent to meet Nigerians annual demand by 2050. The amount spent has been so colossal and alarming that there is a need to stimulate the demand for rice over certain periods of time to confirm the government assertion and claims, hence, this study. Specifically, the objectives of this paper are to generate a demand pattern for 25 weeks in Owode market, Offa Local Government, Kwara State, and estimate optimal weekly demand for rice and determine the expected value. The analytical tool used in this study is Monte-Carlo simulation model. Findings revealed that on the average, 523.6 bags of rice were demanded per week, and the expected value puts at 521.9 bags. The paper recommends and concludes that drastic and urgent action should be taken by the government to encourage locally produced rice in order to safe the country from spending so much foreign reserves on importation of rice.
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Keywords
Demand, Simulation, Monte-Carlo, Steady State
Citation
International Journal of Management and Administrative Sciences (IJMAS)