Abstract
ABSTRACTA firm level simulation model (MARSIM) was developed to analyze the survival of different shrimp farm sizes in Texas. The model simulates the annual activities of a shrimp farm: production, finances, cash receipts, capital replacement and depreciation, cash flows, income taxes, balances, and growth. A firm is replicated 50 times over a 10‐year planning horizon. Random values for shrimp growth and survival, temperature, hurricanes, and prices received in each of 10 years are generated from multivariate empirical probability density functions (pdf) for these variables. For the analysis summarized here, a shrimp farm was simulated using 3 different size systems and 4 different pond sizes. Results indicate that higher rates of return and faster payback are associated with larger total farm size and larger ponds. For large farms (400 surface hectares), pond size becomes less critical to obtaining an acceptable rate of return to investment. The amount of time taken to construct a facility significantly impacts the rate of return. Hurricanes, prices, production, and temperature variation are also critical factors affecting the firm's returns and survival.
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