In this study, an activity analysis model is developed for the purpose of determining the optimum period of production at a chain of sugar-cane processing plants in Australia and the optimal transport network flows of sugar-cane and raw sugar in a regional environment. Explicit treatment is given to discrete variations in sugar-cane quality which affect revenue at each plant in each time period considered. Optimal solutions to three market configurations open to a multi-facility monopolist - spatio-temporal quality competition, spatial quality competition and pure competition - are obtained.
Two general conclusions emerge from the study. Firstly, for given industry output, opportunities for substantial increases in realized industry net revenues do occur when explicit consideration is given to input quality variations relative to industry net revenues associated with treating inputs as homogeneous. Secondly, the identification and estimation of a stable seasonal quality cycle for sugar-cane enabled the specification of a finite planning horizon within which it is possible to optimize operations.