Predicting the Producers' Involvement in Dairy-Food Supply Chains Using Logit and Probit Models

Abstract

Sustainable procurement is critical to the production system of any manufacturing firm. It becomes a complicated affair when the suppliers are marginal and small in their capacities and do not necessarily have business skills to understand and support the processing needs of the firms. In this context, the study would like to explore the critical issues in dairy production and supply in rural areas in a socially responsible supply chain. The variables, due to their ordinal and binary nature, are tested using logit and probit and the outputs are compared for the model accuracy. The study found that regular income opportunity, remunerative price, provision for better income and savings and provision for skill development are some of the key variables likely to increase their involvement in milk production and supply in cooperative based dairy-food supply chain. On the contrary, distance (nearness to home), technical expertise, fodder supply etc., though important, still less likely to impact their involvement in the supply chain.