- 3. DATA USED The break-up of the national supply and demand of beef in South Africa into different regions presented problems because of a paucity in the data. The old development regions were therefore used as observation units. The specific reference points in each region was chosen atler consideration was given to the findings of Eales (1979), the centrality of each point and economic factors such as transport costs. In order to estimate the impact of different macroeconomic variables on the optimal distribution of beef a
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- The pioneering work can be found in Takajama and Judge (1971). Theoretically, the model operates with the objective function of minimizing transport costs talcing into account supply and demand capacity, as well as domestic and world prices. An advantage of such a model is that the effect of international trade can easily be introduced into the model without changing its structure substantially. The model considers effects of tariffs as well as the effect of exchange rate changes on the optimal flow of beef. The model is short run in nature, since the demand, location and size of plants etc., are talcen as given and will permit producing and flow activities. This cost minimizing transport model was developed on Garns 386, a mathematical computer programme (For a detailed discussion of the transport cost minimizing model and underlying assumptions see Jooste, 1996).
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