Modeling Operations of a Custom Hiring Center Using Agent Based Modeling and Discrete Event Simulation

Custom Hiring Centers (CHCs) for agricultural equipment and services are being promoted by the Government of India and various state governments. CHCs are important part of the complex agricultural system. They are beneficial to the community as small and marginal farmers, instead of having to purchase costly machines, can rent the machines as needed. Key factors that affect profitability are the type and number of equipment hosted by the CHC. Each piece of equipment entails a sunk cost as well as maintenance cost. However, since most agricultural operations are time sensitive, the demand is concentrated in time, and having too few pieces of equipment would entail inability to serve the demand and lost revenue. This paper presents a model to simulate the operations of a CHC, under varying scenarios, in order to estimate its profitability. The model uses a combination of Agent Based Modeling (ABM) and Discrete Event Simulation (DES) approaches. Farmers and equipment are modelled as the agents in the system while the CHC operations are modelled using DES approach. The use of the model is also demonstrated with the help of an example. The results showed that even for one combination of equipment, the profitability varies a lot. This significant variation in profitability arises from variation in the percentages of areas under different types of crop, as well as the inherent variation in crop growth rates, readiness of individual fields for particular operations within the seasonal window, as well as propensity of individual farmers to wait for CHC equipment if not immediately available. Results also demonstrate that simulation is useful to model CHC operations in a complex agricultural system and take informed decision about number and types of equipment to buy.