ECONOMIC OPTIMIZATION OF SOW REPLACEMENT DECISIONS ON THE PERSONAL-COMPUTER BY METHOD OF STOCHASTIC DYNAMIC-PROGRAMMING

A stochastic dynamic programming model is designed on the personal computer to determine the economic optimal replacement policy in swine breeding herds. This optimal policy maximizes the present value of expected annual net returns over a specified planning horizon, from sows present in the herd and subsequent replacement gilts. The model also calculates the total extra profit to be expected from attempting to retain an individual sow until her optimal lifespan instead of replacing her immediately. This total extra profit is an economic index which makes it possible to rank sows within a herd in terms of future profitability and, therefore, can be used as a management guide in culling decisions. The optimal replacement policy results in an average herd life of 5.5 parities. The corresponding present value of expected annual net returns per sow equals Dfl. 852. The maximum economic life of average producing sows emerges as nine parities. The optimal policy is most sensitive to the difference between the cost of a replacement gilt and the slaughter value of culled sows. Moreover, conception rates have a considerable effect on net returns, replacement rate and average herd life. All data can easily be adjusted to represent a specific herd or a different region of the world.