Abstract
Fruit tree lease contracts are a prevalent economic practice in Indonesia, especially within rural communities. This study addresses the challenge of establishing equitable contract prices for both lessees and tree owners, specifically by integrating the inherent uncertainties associated with crop yield and fruit price fluctuations. To achieve this, we develop and employ two distinct models: Fixed-Time Discount Model (FTD) and the Dynamic-Time Discount Model (DTD). Each model is mathematically formulated, leveraging a Poisson distribution to capture yield uncertainty and a Uniform distribution to represent fruit price variability. Through computations, we evaluate the impact of key parameters - average yield (λ) and harvest limits (KN) - on contract pricing and the resulting net lessee profits. Our findings reveal that the DTDM exhibits greater sensitivity to parameter variations compared to the other models. This research provides a practical and robust framework for structuring fair and efficient fruit tree lease contracts, contributing to more equitable agricultural agreements.
Recommended Citation
Abdurakhman, Abdurakhman; Sihabuddin, Agus; Wijaya, Kurniawan Chandra; Purnaningrum, Evita; and Maruddani, Di Asih I
(2025)
"Valuing Fruit Tree Lease Contracts Under Uncertainty: A Probabilistic Framework for Fair Pricing,"
Iraqi Journal for Computer Science and Mathematics: Vol. 6:
Iss.
3, Article 39.
DOI: https://doi.org/10.52866/2788-7421.1308
Available at:
https://ijcsm.researchcommons.org/ijcsm/vol6/iss3/39
