ABSTRACTGROWER DECISION SUPPORT TOOL FOR CONVERSION TO A HIGH-EFFICIENCY TART CHERRY ORCHARD SYSTEMByJacob McManus This thesis utilizes an asset replacement model to determine the optimal time period to transition from an existing standard orchard to a proposed high-density orchard system. The tart cherry industry in Michigan is the foundation for an empirical example, allowing for estimation of variables essential to the asset replacement model. The marginal net revenue approach is used to determine the optimal time period for asset replacement by comparing anticipated marginal net returns of the existing orchard to the expected discounted net returns of the proposed orchard system. Given the innate uncertainty of parameters inherent in tart cherry production, yield is stochastically estimated to evaluate the economic returns. Results indicate that asset replacement of an existing tart cherry orchard with a high-density orchard system should occur before the traditional orchard removal time period. The anticipated returns of an existing orchard are less than that of the expected net returns of the proposed high-density orchard. This model is the first asset replacement approach developed for an individual tart cherry grower to determine if, and when, to replace existing orchards with a high-density orchard system.
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