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"Turtle Diagram" as a Tool of Forecasting in the Management of Production

Risk in Agriculture -Literature Review

Article · January 2021

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Albanian j. agric. sci. 2021;20 (1): 36-40 Agricultural University of Tirana

RESEARCH ARTICLE (Open Access)

"Turtle Diagram" as a Tool of Forecasting in the Management of

Production Risk in Agriculture - Literature Review
ARIF MURRJA1*, SADIK MALOKU2, MAKSIM MEÇO1
1
Faculty of Economy and Agribusiness, Agricultural University of Tirana, Tirana – Albania
2
Faculty of Life and Environmental Sciences, University “Ukshin Hoti”, Prizeren, Kosovo
*Correspondingauthor Arif Murrja; E-mail: [email protected]

Abstract
The "turtle diagram" is a well-known instrument in the theory of auditing and risk management. We will adapt
this ISO-9001/2015 instrument to use it in forecasting production in agriculture, as one of the risk management
tools in agricultural businesses. The sources of risks in agricultural businesses are numerous. To manage these
resources in risk theory know several tools. These tools are: (i) Information; (ii) Forecast; (iii) Diversification;
(iv) Excess capacity and reserves in inputs and output; (v) Lease agreements; (vi) Orders and contracts; (vii)
Institutional instruments; (viii) Insurance; and(ix) Government.
The paper will focus on the "forecasting tool" in agricultural manufacturing businesses. This tool will be
designed according to the "turtle diagram". This design visually combines factors, needs and outcome
(production).
Keywords: diagram, risk, output, tool, specific, forecast.

1. Introduction
1.
Risk management is vital and important for the Production
risk
success of agricultural businesses. Among the main
5. Human
risks faced by entrepreneurs of agricultural businesses resource
Management 2. Market
of risk
is the risk of production. Agricultural producers are risk
risk in
businesses that buy factors and turn them into results, agricultural
hoping that their value is worth more than the total business
3.
value of inputs. Some businesses, especially industrial 4. Legal
Financial
risk
ones, have the luxury of knowing exactly how much risk
can be produced with a number of factors (Drollette,
Source: Presentation of the authors
2009). Producers in agriculture do not have that Figure 1.1 Diagram of specific risk management in
luxury. Agriculture is dangerous (Kahan, 2008: 10). agricultural businesses

1.1 Specific risks Komerak et al. (2020) have inventoried scientific

articles on production risk, market risk, financial risk,
Risk management in agricultural businesses focuses legal risk, and human resource risk. In their study we
on specific risks. Specific risks are: production risk, find 2’160 articles on production risk; 434 market risk
market risk, financial risk, legal risk and human items; 79 articles on legal risk; 66 items on financial
resource risk (Kyna Kurtis; A.M. Turay; Kahan 2008; risk; and 60 articles on human resource risk. The
Crane et al., 2013). distribution of the number of studies for the period
1974-2019 is presented in Figure 1.2 "Venn diagram"
(Koremakect., 2020).

*Corresponding author: Arif Murrja; E-mail: [email protected]

(Accepted for publication )
ISSN: 2218-2020, © Agricultural University of Tirana
 Murrja at al. 2020

Suorce: Komerak, De Pinto, Smith 2020:4.

Figure 1.2Venn diagram for distribution of the number of studies across five types of risk between 1974 and 2019.

1.2 Sources of production risk in agriculture to recognize and manage production risk. Summary
Table 1.1 presents all sources of negative risks and
Production is the main source of income in their exposure forms.
agriculture. It is therefore important for entrepreneurs

Table 1.1Sources and forms of production risk

No. Resources Forms or types

1 Bad weather Floods, droughts, frost, hail and wind.
2 Natural disasters Earthquake, fire, landslide, etc.
3 Diseases Plant and animal diseases.
4 Pests Insect, flying, wildlife and weed.
5 Breakdowns in machinery and equipment Old, co-owned, new but unqualified to use.
6 Health and well-being of the workforce Older age, accident, illness and low family income.
Failure to discover cultivars and breeds of hybrids,
7 Uncertainty of agriculture as a life science
pesticides and medicines.
Biological cycle limitation, physiological maturity,
8 Biological cycle
commercial maturity, etc.
The increase of the price of the factors of production and the
9 Market fluctuations
decrease of the price of production.
10 Globalization Free trade agreement.
Source: Presentation of the authors
understanding of "tools" help investors manage
production risk.
1.3 Production risk management tools in
The “tools” for managing production risk in
agriculture
agriculture are: Information; Forecast; Divesifikimi.
We have many "tools" available to help farmers, Excess capacity and reserves in inputs and output;
agribusiness and agro-industry investors manage Lease agreements; Orders and contracts; Institutional
production risk. The use of risk management "tools" instruments; Insurance and Government.
depends on the situation and ability. Knowledge and
 Murrja at al. 2020

According to the ISO standard, the "turtle diagram" is

a visual tool that shows all aspects of a process,
1.Inform- including inputs, results, measurement criteria, and
9. -ation
Government
2.Forecast other important information that helps improve the
efficiency of organizational processes. Regarding the
8. The tools of 3.Diversif
Insurance use of the "turtle diagram" in audit and risk
management -ication
of risk management processes, researchers point out its
of production 4.Capaciti importance. According to Guo et al. (2019) the "turtle
7.
Institutional es of
Instruments surplus
diagram" is used to control the quality of production
6. 5.Lease
Order and agreements
and improve the economic benefits of enterprises,
contracts while Ruswanto and Saroso (2018) emphasize that
using this diagram is performed risk analysis.
Dementyev and Semenov (2017) take as a solution,
Source: Presentation of the authors
the standard for vehicle manufacturers ISO 16949.
Figure 1.3 Production risk management tools in The ISO 16949 approach to process description
agriculture differs from that of ISO 9001; which focuses on the
needs of the client, not the process itself. To
Our study will analze forecasting as one of the means implement this approach in utility companies it is
of managing prodiction risk. Prodictionforestast will proposed to use process processes "octopus" and
be schematized according to the “turtle diagram”. "turtles".The octopus model takes into account eight
factors (Pereira, Severo, and Fontoura 2012).
2. Literature Review

Source: Michael Abildgaard Pedersen, 2018:154

Figure 2.1 ISO 9001:2015-Model of a prosess-based quality management system, showing the links to the clauses of
this International Standard

3. Results and Discussion functions and levels within the agricultural business.
The organization and operation of the "turtle diagram"
The "turtle diagram" displays the entire production is very simple. The diagram consists of six areas,
forecasting process, as well as harmonizes the which predict the production process, creating the
communication of the stages related to the respective image of the turtle body.
 Murrja at al. 2020

Source: Presentation of the authors

Figure 3.1 “Turtle diagram” as a forecasting tool in agricultural production

The areas are: can reflect the characteristics of their process. The
The first area in the center, on the left of the diagram, proper forecasting process to exchange is schematized
predicts the factors of production, which include: according to the turtle body and the criteria, factors,
natural resources (climate, water, sun, agricultural results, etc. are easily identified. The diagram helps
land, pastures, forests, etc.); capital invested in owners, investors and executives execute sales
agricultural business (cash, inventories, biological effectiveness that minimizes negative risks.
assets, machinery, equipment, etc.) and debts or loans
taken by the business. 5. References
The second area at the top left of the diagram,
predicts the plans, that: what, how much, how, where
1. Abdullahi Hyssein, Kai Cheng (2017), “An
and when will we plant? Forecasts are detailed not
only in the type of crops, trees, animals, birds; but Investigation on the Engineering Process
also in quantities, days, weeks, months of the year and Oriented Approach to Aerospace Quality
in the place and / or places where the business is Assurance Compliance in Manufacturing
located. SMEs” pp. 456-458.
The third area at the bottom left of the diagram 2. Adam M. Komarek, Alessandro De Pinto,
provides methods for selecting new factors and Vincent H. Smith (2020), “A review of types
technologies to minimize risk; selection of low risk
of risks in agriculture: What we know and
activities; and system flexibility.
The fourth area at the top right of the diagram, what we need to know”(https://
provides human resources for all production processes doi.org/10.1016/j.agsy.2019.102738, pp. 4-7.
and business levels (managers, consultants, 3. A.M. Turay (2015), “Agribusiness Risk &
specialists, economists and workers). Risk Management: Taking Care of
The fifth area at the bottom right of the diagram Business” http://kysu.edu/ëp-
predicts operational and strategic decision-making. content/uploads/2015/11/Agribusiness-Risk-
Many agricultural production processes mature
Management.pdf., pp. 3-25.
rapidly and require rapid decision-making, and some
processes, such as buying long-term assets and 4. Andrey S. Dementyev, Viktor P. Semenov
obtaining long-term loans, require slower decision- (2017), “Implementation of the process
making. approach used in the automotive industry
The sixth area in the center on the right predicts based on ISO 16949 in service
quantity, quality and cost of production. Getting companies”DOI: 10.1109/EIConRus.2017.79
predictable results means a good risk reward. The goal
10810, pp.1-10.
is to spend as little as possible to earn as much as
possible. 5. David Kahan (2013 reprint), Managing risk in
farming E-ISBN 978-92-5-107544-9 (PDF),
4. Conclusions pp. 10-12.
6. Laurence Crane, Gene Gantz, Steve Isaacs,
Forecasting as a risk management tool is very Doug Jose, Rod Sharp (2013), “Introduction
complex. The "turtle diagram" is a convenient tool to to Risk Management”
predict in an agricultural businesses. Through it we
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