A Note on the Analysis of Time Cost by Difference of Transaction System in the Agricultural Wholesale Market of Korea

Abstract

Problem statement: The purpose of this study is to prove objectively that the market-wholesaler system, introduced to agricultural wholesale market in Korea for the first time, has better operational efficiency than the existing auction system. From an analytical viewpoint, we estimated the time value of two transaction systems at the agricultural wholesale market using the calculation methods of the congestion cost and the accumulation cost, and estimated the operational efficiencies divided by product family and item. Approach: We used data from the Statistical Resource of Agricultural and Marine Wholesale Market by Year for the research conducted in this study. Results: As a result, we were able to analyze and conclude that the market-wholesaler system had a relatively lower time cost than the auction system by utilizing the time required from the agricultural carrying-in to the preparation for sale by the transaction system at the agricultural wholesale market and calculating the total time cost for 16 main items into the amounts. These results prove that the market wholesaler system has a better efficiency than the auction system. Conclusion: Therefore, if the market-wholesaler system can be enlarged and introduced into Korea’s 32 agricultural wholesale markets as the policy implicates by the study results, we can conclude that the transaction efficiency within the agricultural wholesale market will be better and it will contribute to enhancing the efficiency of the whole agricultural and fishery distribution industry.