BIBLIOGRAPHY


FRANCIS, DANTE T. APRIL. 2011, Measuring Performance in the Spot Market Chains
for Potato. Benguet State University, La Trinidad, Benguet.

Adviser: Leopoldo N. Tagarino, MRSM (Agribusiness)

ABSTRACT


Most of the chain actors moderately agree on the statements related to product quality
satisfaction in measuring performance. Respondents moderately agree on the reliability of
potatoes with regards to its quality while they strongly agree on their satisfaction to fulfill orders
and deliveries when needed. Results revealed that chain actors significantly differ as to; always
achieving their production/procurement/delivery targets, their satisfaction to fulfill the orders and
deliveries when needed and the reliability of potatoes supplied in the market. On the flexibility
performance, majority of the farmers and wholesalers gave extreme responses (undecided, and
moderately agree) on buyers and sellers has little conflict to their business transaction. Test
statistics shows that chain actors significantly differ on responses on all the statements related to
flexibility except statement number three. Regarding to efficiency performance; farmers, trucker-
wholesalers, wholesaler-retailers and retailers strongly agree on exerting effort to reduce the cost
of production/procurement. Majority of the trucker-wholesalers strongly agree on scheduling of
deliveries to meet the time in the market for the reason that they were the one who really
assigned for this task. Test statistics findings shows that chain actors significantly differ on
responses in all the responsiveness statements.

In order to have a good performance, chain actors must reclassify the potato to meet
product quality satisfaction. Establishment of business to business relationship especially trust
must be observed and there should be communication to have a good bonding of each actor to

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avoid opportunistic creditors. As to the flexibility, buyers must have an advanced notice in
accordance with the quality and volume to be procured to give an ample time to suppliers in
order for them to supply what they want. Moreover, chain actor’s responsibility to deliver potato
must be always on time. Chain actors must also act on demand/complaints of buyers related to
quality/quantity for the improvement of business transaction.

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1

INTRODUCTION


Rationale

Cordillera Administrative Region particularly Benguet and Mountain Province is
the major producer of potato in the Philippines. It supplies eighty five percent (85%) of
the total requirement of the NCR (Gayao and Sim, 2000). Majority of the producers bring
their product to the spot markets like trading posts and sell to traders such as assembler
wholesalers, wholesalers and retailers (Sim and Tagarino, 2009).
In the year 2005, Benguet potato production is 44,922 metric tons with a
production area of 2,762 hectares (ha) compare with Mt. Province which was the second
major producer, produces an 8,101 metric tons with an area of 733 ha. However, Benguet
decrease its production in the year 2006 from 44,922 metric tons to 43,800 metric tons
with a decreased in production area from 2,762 ha to 2,707 ha. Moreover, Mt. Province
makes to increase its production from 8,101 metric tons to 8,360 metric tons with an
increase of production area at about 9 ha. The two major producer doubled their
production in the year 2007 from 43,800 (Benguet, year 2006) to 84,622 metric tons with
a production area of 2,712 ha and Mt. Province from 8,360 metric tons (year 2006) to
17,371 metric tons with a production area of 1,072 ha (DA-BAS, 2008).
Marketing includes all the various post harvest activities in the transformation of
commodity sold by the farmers then purchase by buyers. The most obvious aspect of
transformation is a change in physical appearance or form (Fred, 2004). Studying market
activities allows us to weigh their loss, benefits and flaws more efficiently and
effectively. In addition, marketing enables concerned and affected individuals to improve
their marketing practices in order to attain the maximum level of income (Salbino, 2006).
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Performance measurement fulfills a crucial role in the development of supply
chains as it can direct the design and management of the chain towards the required
performance. It is the key instrument to discuss and evaluate the effectiveness of
(potential) chain partnership. The number of publication on performance measurement
has increased significantly in the last decade (eg. Beamon 1999., Lohman et al., 2004 and
Gunasekaran et al., 2004). This is mainly because of member of fundamental changes in
the business environment especially in agri-food chains. Consumers in Western-European
markets have become more demanding in place new demands on attributes of food such
as quality (guarantees), integrity, safety, diversity and associated information (Vorst,
2004).
The agribusiness and food chains are transforming from commodity system
organized via spot markets towards a vertically coordinated food system. This leads to
competition between individual firms (Christopher, 1998; Lambert and Cooper, 2000).

Statement of the Problem


1. What are the performances of the actors in the spot market chain for potato in
terms of: product quality satisfaction, flexibility, efficiency and responsiveness?
2. What are the differences in performance among the actors in the spot market
chain?


Objectives of the Study

1.
To assess the performance of the actors in the spot market chain for potato
in terms of: a. product quality satisfaction, b. flexibility,
c.
efficiency
and
d.
responsiveness.
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2.
To determine whether there are differences in performance among the
actors in the spot market chain for potato.

Importance of the Study
The study would provide the needed information about the performances of actors
specifically to determine the efficiency, flexibility, responsiveness and product quality in
the spot market of potatoes. To look also for the differences among chain actors in potato
spot market.

Scope and Delimitation of the Study
The study focuses on the spot market of potatoes. Specifically on the efficiency,
flexibility, responsiveness and product quality satisfaction of chain actors in the spot
market of potatoes.
The limitations associated in this primarily relate:
1.
The potato spot market or wet market supply chain operations.
Institutionally initiated potato supply chains that involved highly organized firms would
not considered.
2.
The unknown number of target groups of respondents; the multiple
functions (especially the traders) in the marketing process and the non-accommodating
traders to give information.
3.
The chain actors involved in production and market transactions on potato
in the region were the major focused of this research and exclude the other actors
involved in the type or variety of potato from the other regions.
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4.
The research locations covered the limited to major production and
marketing areas of potato in Cordillera Administrative Region (CAR) and Metro Manila.
5.
The analysis focused on the objectives and framework of this research.





















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REVIEW OF LITERATURE

Background of the Study
Pricing is considered by many to be the key activity (Daplian, 2001) within the
free enterprise system. Product price influences wages, rent, interest and profits. That is
the price of the product influences the price paid for the factors of production like labor,
land, capital and entrepreneurship. Price is the basis regulatory of economic system
because it influences the allocation of those factors of production, high cost of wage
attracts labor; high interest rates attract capital, and so on. In the allocation of scarce
resources price determined would be produced (supply) and who would get the product
that was produced (demand).
In the Philippines, losses incurred during shipping, storing and distributing of
commodities were extremely high. Scientific packing and refrigeration of fresh vegetable
have not been practiced widely despite of many factors which would help in the fast
deterioration of fresh vegetable like insects, bacteria, fungi and excessive heat and
mechanical injuries with either crush or infect fresh vegetable thereby reducing the
market price considering also the transportation facilities and road conditions especially
here in the CAR (Buena, 2004). Potato marketing system are composed of eight major
types of participants namely (1) potato producers; (2) input suppliers; (3) growers; (4)
traders; (5) transporters; (6) processors; (7) institutional buyers; (8) household consumers
(FRLD, 1995).
In the frame of this study, supply chain and networks was defined as the
interconnected business of individuals, operating independently, but dependent from each
other on the supply of goods and services. In essence, the fresh vegetable production and
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marketing flow is regarded as a supply chain and this was largely due to the involvement
of a number of people or business entities performing different tasks until the product
reaches the consumers. The people (individuals, business entities) are the chain actors
that undertake different functions from production to assembly to distributions and
retailing of vegetables. The business is independently managed with intra– and inter-
organizational relationships. In the exchange processes, there involve bi-directional flow
of products (materials and services) and information through the interactions of people
with either formal or informal relationships. Moreover, these individuals are largely
interdependent on the supply of products, thus with assumed coordination mechanisms to
facilitate marketing transactions.
The impact of supply chain linkages on operational and business performance has
been the subject of a number of empirical studies. These studies have encompassed a
variety of supply chain definitions, performance measures and methodologies (Fynes et
al., 2005). For instance, Carter and Ellram (1994) found that supplier involvement in
product design has a positive impact on product quality using a case study design.
Narasimhan and Jayaran (1998) examined relationship between sourcing decisions,
manufacturing goals, customer’s responsiveness and manufacturing performance using
structural equation modelling. They found that integrating supply chain activities
involves aligning sourcing decisions to achieve manufacturing goals in terms of
dependability, flexibility, cost and quality. Likewise, Carr and Pearson (1999) found that
strategically managed long-term relationships with key suppliers can have a positive
impact on financial (as distinct from manufacturing) performance. Kaynak and Pagán
(2003) using stochastic frontier modelling, found that characteristics internal to the firm
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such as top management commitment to purchasing and supply management had a
positive effective on production efficiency. Also, Salvador et al. (2001) found that when
buyers and suppliers interact on issues related to material flows and quality, there are
significant effects in terms of speed and delivery punctuality. More recently, Tan et al.
(2002) develop a comprehensive set of supply chain practice and supply chain
performance metrics and found that while some practices had a positive effect on
performance, others had an adverse effect.
There would be a common view within a chain with respect to its own behavior,
also regarding its impressions of outside expectations. Dominant scientific disciplines
describing and explaining behavior of chains are marketing science and economics. Other
disciplines that are contributing to the behavioristic view were psychology, law,
environmental sciences, ecology, ethics, food safety, sociology, and among others.
Research questions refer to e.g. determination and requirements of chain behavior,
measurement of behavior e.g. performance, determination of relevant indicators related to
the actual circumstances, management tools instrumental in dealing with perceptions,
etc.. In practice benchmarking of chains is an important tool for chain analysis (Beers et
al., 1998).
A product is created by a set of activities with precedence relations between them
executed and directed by organizations within the production chain. The way these
activities are organized, managed and controlled among several actors (e.g. companies)
were the focus of the institutional approach in chain studies. The linkages between the
actors are primary subject of study. The institutional perspective deals with the
interaction between organizations in the chain, e.g. the way contracts are managed, the
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pricing processes, exchange of information, coordination and control of physical flows
etc. Dominant scientific disciplines working within the realm of this perspective are
organization and management theory and business economics. Other sciences involved
are law, information science, transaction theory, management science, logistics etc.
Scientific issues to be researched were directed towards type of linkages, effectiveness
and efficiency of linkages, conditioning of linkages etc. (Beers et al., 1998).
Performance measurement was used to help direct the allocation of resources,
assess and communicate progress towards strategic objectives and evaluate managerial
performance (Ittner and Larcker, 2003). It helps also the manager to identify good
performance, helps to make tradeoffs between profit and investment, provide means to
set strategic targets and ensures that managers are aware when to get involved if business
were distracting (Nelly et al., 1994).
According to Theodoras et al. (2005) despite the importance of measuring
performance in obtaining competitive advantage in the supply chain, relatively little
research has been undertaken to provide a thorough understanding of measuring and
improving performance in the food industry.
A knowledge gap between farmers and processors about e.g. business practices,
product supply, quality expectations therefore, farmers and processors pose different
questions to improve supply chain performance which leads them to run the risk of miss-
specifying each other’s decision process (Le Heron, 2001).
Performance measurement as defined by (Nelly et al., 2005) is the process of
quantifying the efficiency and effectiveness of an action, a performance indicator is a
measure used to quantify the efficiency and effectiveness of an action. According to
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Coeli et al. (2005) a natural measure of performance is a productivity ratio: the ratio of
outputs to inputs, where larger values of this ratio are associated with better performance.
While there are many indicators of performance that can be deployed in an organization,
there were a relative small number of dimensions which contribute more than
proportionally to success or failure in the market, which were Key Performance Indicator
(KPI’s).
Performance measurement of any activity should be designed to bring about
improvement in that activity, highlighting variances over time, and enabling a more
efficient allocation of resources (Geanuracos and Meikklejohn, 1994).
Performance can be characterized cost factor and service factor. In the cost factor
the cost of inventory, transportation, facilities and handling cost and information
infrastructure and the service factor consider the response time, product variety, product
availability and return ability (Hongze Ma, 2005). Performance measurement as a subject
involves the development of goals and their related measures, as well as the appropriate
mechanisms of feedback. It must therefore reflect the operating assumptions of the
organization, in terms of culture, strategy and operational processes. This requires the
identification of the pressures, which the organization faces, both internal and external,
and should consequently lead to a set of action plans for specific areas of organizations
(Hines et al., 2000).
Performance metrics is necessary to confirm that the supply chain is functioning
as expected, or that there were problems that must be addressed. There are several
measures that can be used that relate to such things as late deliveries, inventory turnover,
response time, quality issues, and so on in the retail sector, the fill rate (the percentage of
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demand filled from stock on hand) were often very important. Another approach is to use
the Supply Chain Operations Reference (SCOR) model. The SCOR model reflects an
effort to standardize measurement of supply chain performance.
The performance of the supply chain can refer both to the performance of the
industry as well as the individual firm supply chain. Furthermore, performance has three
dimensions: effectiveness, efficiency and equity. Since the objectives of efficiency and
effectiveness influence make –versus-buy or “outsourcing” decisions of supply chain
members, they thus, are influenced by the structure and conduct in that chain. The first
dimension of performance is effective, when it meets the demand of its ultimate
customers concerning product, price and service outputs (consistent and on-time delivery,
continuity and flexibility in supply, assortment and variety, etc.). This also includes the
measurement of customer satisfaction. The second dimension of performance is
efficiency. Measurement of efficiency of individual supply chain members can be derived
from the contribution ratio. The third component of performance is equity. The equity
level within a supply chain was indicated by the degree of resemblance between the share
of total contribution margin gained and the share of total supply costs bore by each chain
members involved in the production and marketing of the product (Sijses, 2004).
Aramyan et al. (2006) summarized the different methods to assess supply chain
performance, the advantages and disadvantages of each method; and developed a
conceptual framework for agri-food supply chain performance indicators. The categories
are chosen from the literature review on supply chain performance measures from
different sectors and these include efficiency, flexibility, responsiveness and food quality.
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Flexibility- indicates the degree to which supply chain can respond to changing
environment and extraordinary customer service requests (Aramyam, 2007).
Responsiveness - aims at providing the requested products with a short lead time.
Salvador et al. (2001) found that when buyers and suppliers interact on issues related to
material flows and quality, there are significant effects in terms of speed and delivery
punctuality
Product Quality Satisfaction - quality (Luning et al., 2002) consists of product
safety and health; the sensory properties and shell life and; product reliability and
convenience.
Efficiency - measures how well the resources were utilized (Lai et al., 2002)
which include production costs, profit, return on investment and inventory. Grimsdell
(1996) identified the fundamental requirements for efficient supply performance between
agricultural growers and consumers as: scale of operation; producer flexibility; continuity
of supply; quality control; strategic alliances; and communications.

The literatures implied that there were several methods and models to measure
supply chain performance. Performance indicators have been identified summarized and
further categorized (figure 1). In these regards, the research would assess the fresh
vegetable sector supply chain performance using the quality, flexibility and efficiency
indicators. The quality performance shall focus on the perceived satisfaction on the
product and service quality. Specifically, the product quality performance would be
assess based from the physical products and the service quality would be on related
services performed. Moreover, flexibility indicates the degree to which supply chain can
respond to changing environment (Aramyam, 2007). The assessment would focus on the
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Chain
Characteristics


Farmers


Dimension of

Performance
Fle xibility
Assembler-
Output


Wholesalers



Responsiveness

Performance profile
Trucker-

Wholesalers
Quality Satisfaction

Differences in

performance of the
Wholesalers
actors in potato spot


market
Efficiency



Wholesaler-
Retailers




Retailers





Figure 1. Conceptual framework


degree of flexibility of the chain actors in terms of the volume of production and
procurement, the pricing and the alternative buyers. Finally, the performance would be
evaluated in terms of efficiency using the costs, profit and the return on investments.

Definition of Terms

Producers or Farmers – the one who produces the commodities.

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Wholesaler – refers to middle men who directly sell potato to retailers in
wholesale basis.
Assembler-wholesaler – they are the one who assemble the product to make it in
large quantity.
Truckers or Viajeros – they are in charge of carrying the product to put it in the
spot markets.
Retailers – refers to the individuals who market potato directly to ultimate
consumers.

Chain actors – this are the producers, assemblers, distributors and retailers.

Comvoyers- refer to the person especially male who carry vegetables to the
trucks.
Spot market – place where the product were being delivered and sold.
Flexibility – this is how to adjust to the changing environment.
Responsiveness – the ability of a system to adjust quickly to a situation and to
resume stable operation without undue delay.
Product quality satisfaction - consists of product safety and health; the sensory
properties and shell life and; product reliability and convenience.
Quality is the physical description of the product in terms of its size; shape; color;
freedom from pests and diseases; purity (in terms of its freedom from chemical
contaminants, pathogenic organism and genetically modified plants); maturity of
freshness and the manner in which the product was packed.
Efficiency – ability to accomplish a job with a minimum expenditure of time and
effort.
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METHODOLOGY

Locale and Time of the Study
The research locations followed the geographic flow of fresh semi-temperate
vegetables from the major source (production) to the major market assembly and
collection, and the geographic distribution markets. However, the research coverage areas
were limited to selected production and marketing areas.
Producers group - The farmers was identified and interviewed at La Trinidad
Vegetable Trading Post.
The primary markets are the assembly area where the potato are first traded and
mostly concentrated in La Trinidadad.
Secondary markets are the distribution area where the products are moved. These
are the vegetable trading centers (commonly called “bagsakan”) in Metro Manila such as
Balintawak and Urdaneta City, Pangasinan.
The tertiary markets are the area where the retailing activities were undertaken,
mostly in Metro Manila like Blumentritt, Dapitan, Kamuning, Novaliches, Pasay and
Balintawak.

Respondents of the Study
Respondents of the study were the different actors involved in potato trading in
the spot market chain. There are 193 intermediaries involved, broken are as follows: 43
producers, 37 assemblers or collectors, 59 distributors and 54 retailers.



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Data Gathering Procedure
The research instrument used in the study was interview schedule and
observation/interaction with the respondents.

Data Gathered

The data gathered were the performance indicators in spot market chains,
particularly the efficiency, flexibility, responsiveness and product quality satisfacxtion.
Also to look for the differences in performance among the chain actors in the potato spot
market.

Data Analysis
The data was tabulated in Excel Program, and analyzed using the SPSS Version
16. Frequency counts, averages and percentage were used for descriptive analysis while
Kruskal Wallis for statistical test.










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RESULTS AND DISCUSSION


Demographic Profile of the Respondents


Table 1 presents the demographic profile of the different classification of the
respondents as to their age, gender, marital status, religious affiliation and educational
background.

Age. Most of the respondents or actors like farmers have (40%), assembler-
wholesalers (32%), trucker-wholesalers (42%) and wholesalers (40%) have an age
bracket of 21-30 years old while the financier-assembler-wholesalers (39%) and
wholesaler-retailers (38%) has an age bracket of 31-40 years old. The retailers (39%)
had the older age among the different group of respondents. Result implies that most of
the farmers, assembler-wholesaler, trucker-wholesaler and wholesaler are at the young
age while in the retailing business, respondents are middle aged in this kind of business.

Gender. There were an unequal number of males and females. Most of the
farmers (91%), assembler-wholesaler (68%) and trucker-wholesaler (67%) are males,
while the financier-assembler-wholesalers (72%), wholesalers (60%), wholesaler-retailer
(68%) and retailer (83%) are females. Result shows the differences in trading functions or
activities performed.

Marital status. Most of the respondents involved in this business are married,
followed by lesser number as single, separated or widowed. This implies, that actors
involved despite of their marital status, engaged in this business would not just a work
but also as source of living.
Religious affiliation. Most of the respondents are all Catholic, followed by
Protestants, and only few are affiliated to other religious denomination.
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Table 1. Demographic profile of respondents

PRODUCTION
ASSEMBLY
DISTRIBUTION
RETAILING
CHARACTERISTIC
F
A-W
F-A-W
T-W
W
W-R
R
N
%
N
%
N
%
N
%
N
%
N
%
N
%
Age














20 and below
4
9
2
11
0
0
0
0
3
30
3
8
2
4
21-30
17
40
6
32
4
22
5
42
4
40 13 35
10
19
31-40
9
21
6
32
7
39
4
33
1
10 14 38
10
19
41-50
9
21
4
21
4
22
2
17
1
1
3
8
21
39
51-60
3
7
1
5
3
17
1
8
1
10
3
8
9
17
60 and above
1
2
0
0
0
0
0
0
0
0
1
3
2
4
TOTAL
43
100
19 100 18 100 12 100 10 100 37 100
54
100
Gender














Male
39
91
13 68
5
28
8
67
4
40 12 32
9
17
Female
4
9
6
32 13 72
4
33
6
60 25 68
45
83
TOTAL
43
100
19 100 18 100 12 100 10 100 37 100
54
100
Marital status










Single
14
33
2
11
1
6
5
42
6
60 16
43
10
19
Married
29
67
17 89 16 89
7
58
4
40 20
54
42
78
Separated
0
0
0
0
1
6
0
0
0
0
0
0
1
2
Widower
0
0
0
0
0
0
0
0
0
0
1
3
1
2
TOTAL
43
100
19 100 18 100 12 100 10 100 37 100
54
100
Religious affiliation

Catholic
32
74
14 74 12 67 12 100
9
90 27
73
47
87
Protestant
6
14
3
16
4
22
0
0
1
10
7
19
6
11
Others
5
12
2
11
2
11
0
0
0
0
3
8
1
2
TOTAL
43
100
19 100 18 100 12 100 10 100 37 100
54
100
Educational background









Elementary
12
28
1
5
2
11
2
17
1
10
4
11
10
19
High School
18
42
9
47
8
44
4
33
3
30 17
46
31
57
College
13
30
9
47
8
44
6
50
5
50 14
38
11
20
Vocational
0
0
0
0
0
0
0
0
1
10
2
5
2
4
TOTAL
43
100
19 100 18 100 12 100 10 100 37 100
54
100
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Educational background. Majority of respondents have finished high school and
college. Some of them attended elementary and least number attended vocational
particularly in the distribution and retailing group. This implies that educational
background is not an important factor to engage into this kind of business.

Number of years engaged in vegetable business

Table 2 indicates the years engaged in business by the different chain actors.

Most of the farmers (37%), assembler-wholesalers (42%), wholesalers (50%) and
retailers (28%) are engaged in business for one to five years. Also, wholesaler-retailers
(30%) have engaged in vegetable business for six to ten years while few stated that they
engaged for 16-20 years. A total of nine respondents from farmers (9%), wholesaler-
retailers (8%) and retailers (2%) said that they engaged in business for 31 and above
years. The result implies that most of the respondents were new in the vegetable business.

Organizational Affiliation of Respondents

Table 3 presents the different organizational affiliations of respondent, such as
farmers association, cooperatives, and other organizations.
Most of the respondents were not affiliated to any organizations. However, the farmers
(2%), assembler-wholesalers (11%), financier-assembler-wholesalers (22%), trucker-
wholesalers (25%), wholesaler-retailers (16%) and retailers (4%) were member of
cooperatives. But, other respondents were affiliated to other type of organization such as
farmers association or traders associations. The results implied that the different actors
may not appreciate the importance of the organization in the business undertakings.
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Table 2. Number of years engaged in vegetable business
PRODUCTION
ASSEMBLY
DISTRIBUTION
RETAILING
YEARS
F
A-W
F-A-W
T-W
W
W-R
R

N
%
N
%
N
%
N
%
N
%
N
%
N
%
Below 1 year
0
0
1
5
0
0
0
0
4
40
5
14
2
4
1-5 years
16
37
8
42
6
33
4
33
5
50
10
27
15
28
6-10 years
5
12
6
32
3
17
3
25
1
10
11
30
9
17
11-15 years
5
12
3
16
7
39
4
33
0
0
5
14
5
9
16-20 years
9
21
0
0
0
0
0
0
0
0
1
3
11
20
21-25 years
2
5
1
5
2
11
1
8
0
0
1
3
2
4
26-30 years
2
5
0
0
0
0
0
0
0
0
1
3
9
17
31 and above
4
9
0
0
0
0
0
0
0
0
3
8
1
2
TOTAL
43
100
19 100 18 100 12 100 10 100 37 100
54
100



Table 3. Organizational affiliation of respondents

PRODUCTION ASSEMBLY
DISTRIBUTION
RETAILING
Farmer
A-W
F-A-W
T-W
W
W-R
Retailer
CHARACTERISTICS
N
%
N
%
N
%
N
%
N
%
N
%
N
%
Farmer's Organization
0
0
0
0
0
0
0
0
2
20
0
0
0
0
Cooperative
1
2
2
11
4
22
3
25
0
0
6
16
2
4
Others
3
7
3
16
3
17
4
33
0
0
3
8
5
9
None
39
91
14 74 11 61
5
42
8
80 28 76
47
87
TOTAL
43
100
19 100 18 100 12 100 10 100 37 100 54
100



Spot market chain and location for potato. Figure 2 present the different buyer of
the potato from the producer to the end user. It shows the distribution of the vegetable to
the different chain actors.

Most of the farmers sell their potato in La Trinidad Vegetable Trading Post
(LTVLP). This is where most of the chain actors meet and it is the trading market of
farmers in Benguet, Mountain Province and Ifugao. Chain actors come here to buy
different vegetable at low price then distribute it to the different markets of Metro Manila
and Urdaneta City, Pangasinan with high price. Trucker-wholesalers are the one who
were in-charge in delivering of product from LTVP down to lowland areas. Majority of
Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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20


F
F

PTC
LTVTP






A-W
F-A-W
A-W
F-A-W



LTVTP
LTVTP
BALINTAWAK
BALINTAWAK

A-W


F-A-W-R




PTC
LTVTP







T-W

BALINTAWAK

T-W
LTVTP


A-W

W
W

URDANETA, PANG.
BALINTAWAK
BALINTAWAK





F-A-W
W-R

W-R
URDANETA, PANG.
LTVTP
W
METRO MANILA
METRO MANILA






W-R

R
URDANETA, PANG.
LTVTP
R



METRO MANILA

W-R

METRO MANILA
CONSUMERS

URDANETA, PANG.
R
URDANETA, PANG.
CONSUMERS


LTVTP
CONSUMERS



METRO MANILA

LEGEND:
F (Farmer) A-W (Assembler-Wholesaler) F-A-W (Financier- Assembler-Wholesaler)
F-A-W-R (Financier-Assembler-Wholesaler-Retailer) T-W (Trucker-Wholesaler)
W (Wholesaler W-R (Wholesaler-Retailer) R (Retailer)
LTVTP (La Trinidad Vegetable Trading Post) Metro Manila


PTC (Private Trading Center)

Balintawak


Urdaneta, Pangasinan


Figure 2. Spot market chain and location for potato
Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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21

the buyer of potato are the assembler-wholesalers where in they buy large quantity of
potato then sold it to the other chain actors like wholesalers, trucker-wholesalers and
wholesaler-retailers through wholesale basis. Most of the wholesaler-retailers sold their
potato in Balintawak followed by Nepa Q-Mart. Balintawak are one of the trading
markets in Metro Manila where other actors buy vegetables here and sell it to the other
market like Blumemtritt, Dapitan, Kamunig, Novaliches and Pasay. Almost all of the
retailers in Metro Manila buy potato to the wholesale-retailers in Balintawak for the
reason that the price is lower than to the other markets and consider also the location of
their markets. Consumers buy potato from retailers, they buy only what they can
consumed in one to three days for vegetable are easily being damage due to hot
temperature. Even if the consumers want to buy many to avail discount but they can’t for
this reason: lack of cold storage equipment like refrigerator/freezer.

Performance of Chain Actors


Performance measurement as cited by Vorst, 2004, fulfills a crucial role in the
development of supply chains as it can direct the design and management of the chain
towards the required performance.

It was the key instrument to discuss and evaluate the effectiveness of (potential)
chain partnership. The categories were chosen from the literature review on supply chain
performance measures from different sectors and these include efficiency, flexibility,
responsiveness and food quality (Aramyan et al., 2006).

Measuring Performance in the Spot Market Chains for Potato
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22

a. Product Quality Satisfaction

Product quality satisfaction is the level of achieving desired goals with respect to
physical quality.
Table 4a present the product quality satisfaction of actors. As to meeting the
quality satisfactions, majority of the farmers (53%) and assembler-wholesalers (68%)
moderately agree of achieving satisfaction upon the quality of potato. According with the
quality of potato meets the buyer’s requirements, majority of the farmers, assembler-
wholesalers, financier-assembler-wholesalers, trucker-wholesalers, wholesale-retailers
and retailers moderately agree while wholesalers were undecided with it. However, there
was an extreme response (moderately agree and strongly agree) of wholesale-retailers
(38%) while farmers, assembler-wholesalers, financier-assembler-wholesalers, trucker-
wholesalers and retailers moderately agree on their satisfaction with the volume of potato
produced/procured/sold
to
the
buyers.
As
to
achieving
the
production/procurement/delivery targets, farmers (60%) and financier-assembler-
wholesalers (44%) never considered/undecided while trucker-wholesalers (42%) strongly
agree on the said statement. Assembler-wholesalers, wholesale-retailers and retailers also
moderately agree on achieving quality satisfaction of potato. Moreover, the satisfaction to
fulfill the orders and deliveries of potatoes when needed; the farmers (30%) give an
extreme response (undecided and moderately agree); assembler-wholesalers, financier-
assembler-wholesalers, trucker-wholesalers, wholesalers and wholesale-retailers strongly
agree; and retailers moderately agree upon their satisfaction on product quality.
Furthermore, some of the assembler-wholesalers (47%) never considered while retailers
(30%) strongly disagree on their satisfaction to sell potatoes to buyers on credit
Measuring Performance in the Spot Market Chains for Potato
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23

Table 4a. Performance of chain actors according to product quality satisfaction
1
2
3
4
5

Statement
N
% N %
N
%
N
%
N
%
Ave.
FARMER
1. The quality of potatoes I
produce/procure/sold meets my
0
0
2
5
11 26 23 53
7
16
4
expectation.
2. The quality of potatoes delivered meets
0
0
4
9
14 33 20 47
5
12
4
the buyer’s requirements.
3. I am satisfied with the volume I
1
2
5 12
7
16 20 47 10
23
4
produce/procure or sold to the buyer.
4. I always achieve my
production/procurement/delivery
1
2
3
7
26 60
9
21
4
9
3
targets.
5. I am satisfied to fulfill the orders and
3
7
8 19 13 30 13 30
6
14
3
deliveries of potatoes when needed.
6. I am satisfied selling potatoes to buyers
11 26 7 17 16 37
6
14
3
7
2
on credit arrangement.
7. The quality of potatoes I supplied in the
0
0
4
9
10 23 22 51
7
16
4
market is reliable.
8. The buyers are always satisfied as to
variety of product, price, and
0
0
1
2
20 47 18 42
4
3
4
quality/quantity.
ASSEMBLER-WHOLESALER
1. The quality of potatoes I
produce/procure/sold meets my
0
0
0
0
3
16 13 68
3
16
4
expectation.
2. The quality of potatoes delivered meets
0
0
0
0
4
21 11 58
4
21
4
the buyer’s requirements.
3. I am satisfied with the volume I
0
0
0
0
3
16 10 53
6
32
4
produce/procure or sold to the buyer.
4. I always achieve my
production/procurement/delivery
1
5
1
5
2
11
9
47
6
32
4
targets.
5. I am satisfied to fulfill the orders and
0
0
1
5
5
26
4
21
9
47
4
deliveries of potatoes when needed.
6. I am satisfied selling potatoes to buyers
0
0
9 47
6
32
3
16
1
5
3
on credit arrangement.
7. The quality of potatoes I supplied in the
0
0
0
0
3
16 11 58
5
26
4
market is reliable.
8. The buyers are always satisfied as to
variety of product, price, and
0
0
0
0
7
37
7
37
5
26
4
quality/quantity.
Numerical Value and Descriptive Equivalent
Mean range
1 = (1-1.8) - strongly disagree 4 = (3.5-4.2) - moderately agree
2 = (1.9-2.6) - moderately disagree 5 = (4.3-5) - strongly agree
3 = ( 2.7-3.4) - undecided/never considered
Measuring Performance in the Spot Market Chains for Potato
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24

Table 4a. Continued…
1
2
3
4
5
Statement

N % N %
N
%
N
%
N
%
Ave.
FINANCIER-ASSEMBLER-WHOLESALER
1. The quality of potatoes I
produce/procure/sold meets my
0
0
0
0
2
11
7
39
9
50
5
expectation.
2. The quality of potatoes delivered meets the 0 0 1 6 2 11 9 50 6 33
4
buyer’s requirements.
3. I am satisfied with the volume I
0
0
0
0
1
6
9
50
8
44
5
produce/procure or sold to the buyer.
4. I always achieve my
0
0
1
6
8
44
5
28
4
22
3
production/procurement/delivery targets.
5. I am satisfied to fulfill the orders and
0
0
2 11
2
11
6
33
8
44
4
deliveries of potatoes when needed.
6. I am satisfied selling potatoes to buyers on
4 22 5 28
5
28
3
17
1
6
2
credit arrangement.
7. The quality of potatoes I supplied in the
0
0
0
0
2
11 10 56
6
33
4
market is reliable.
8. The buyers are always satisfied as to
variety of product, price, and
0
0
1
6
4
22 10 56
3
17
4
quality/quantity.
TRUCKER-WHOLESALER


1. The quality of potatoes I
produce/procure/sold meets my
0
0
0
0
5
42
2
17
5
42
4
expectation.
2. The quality of potatoes delivered meets the 0 0 0 0 4 33 6 50 2 17
4
buyer’s requirements.
3. I am satisfied with the volume I
0
0
0
0
0
0
7
58
5
42
5
produce/procure or sold to the buyer.
4. I always achieve my
0
0
2 17
1
8
4
33
5
42
4
production/procurement/delivery targets.
5. I am satisfied to fulfill the orders and
0
0
1
8
1
8
3
25
7
58
5
deliveries of potatoes when needed.
6. I am satisfied selling potatoes to buyers on
2 17 3 25
5
42
1
8
1
8
2
credit arrangement.
7. The quality of potatoes I supplied in the
0
0
0
0
0
0
9
75
3
25
4
market is reliable.
8. The buyers are always satisfied as to
variety of product, price, and
0
0
0
0
4
33
5
42
3
25
4
quality/quantity.
WHOLESALER


1. The quality of potatoes I
produce/procure/sold meets my
1 10 0
0
5
50
3
30
1
10
3
expectation.
2. The quality of potatoes delivered meets the 0 0 1 10 4 40 3 30 2 20
4
buyer’s requirements.
3. I am satisfied with the volume I
0
0
1 10
4
40
2
20
3
30
4
produce/procure or sold to the buyer.
4. I always achieve my
0
0
2 20
4
40
2
20
2
20
3
production/procurement/delivery targets.
Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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25

Table 4a. Continued…
1
2
3
4
5
Statement

N
% N %
N
%
N
%
N
%
Ave.
5. I am satisfied to fulfill the orders and
0
0
2 20
1
10
3
30
4
40
4
deliveries of potatoes when needed.
6. I am satisfied selling potatoes to buyers
1
10 2 20
5
50
1
10
1
10
3
on credit arrangement.
7. The quality of potatoes I supplied in the
0
0
0
0
3
30
5
50
2
20
4
market is reliable.
8. The buyers are always satisfied as to
variety of product, price, and
0
0
0
0
4
40
3
30
3
30
4
quality/quantity.
WHOLESALER-RETAILER


1. The quality of potatoes I
produce/procure/sold meets my
0
0
1
3
7
19 20 54
9
24
4
expectation.
2. The quality of potatoes delivered meets
0
0
2
5
7
19 23 62
5
14
4
the buyer’s requirements.
3. I am satisfied with the volume I
0
0
1
3
8
22 14 38 14
38
4
produce/procure or sold to the buyer.
4. I always achieve my
0
0
4 11
8
22 17 46
8
22
4
production/procurement/delivery targets.
5. I am satisfied to fulfill the orders and
0
0
2
5
11 30 10 27 14
38
4
deliveries of potatoes when needed.
6. I am satisfied selling potatoes to buyers
2
5
6 16 11 30 13 35
5
14
3
on credit arrangement.
7. The quality of potatoes I supplied in the
0
0
1
3
6
16 19 51 11
30
4
market is reliable.
8. The buyers are always satisfied as to
variety of product, price, and
0
0
1
3
11 30 18 49
7
19
4
quality/quantity.
RETAILER


1. The quality of potatoes I produce/
1
2
2
4
13 24 27 50 11
20
4
procure/sold meets my expectation.
2. The quality of potatoes delivered meets
3
6
1
2
17 31 28 52
5
9
4
the buyer’s requirements.
3. I am satisfied with the volume I
2
4
5
9
9
17 24 44 14
26
4
produce/procure or sold to the buyer.
4. I always achieve my
8
15 5
9
15 28 18 33
8
15
3
production/procurement/delivery targets.
5. I am satisfied to fulfill the orders and
9
17 6 11
9
17 16 30 14
26
3
deliveries of potatoes when needed.
6. I am satisfied selling potatoes to buyers
16 30 6 11 19 35 13 24
0
0
2
on credit arrangement.
7. The quality of potatoes I supplied in the
1
2
3
6
10 19 28 52 12
22
4
market is reliable.
8. The buyers are always satisfied as to
variety of product, price, and
1
2
1
2
19 35 19 35 14
26
4
quality/quantity.

Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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26

arrangements. Financier-assembler-wholesalers also give an extreme response (undecided
and moderately agree) on the product quality satisfaction statement number six. Majority
of the farmers, assembler-wholesalers, financier-assembler-wholesalers, trucker-
wholesalers, wholesalers and retailers moderately agree on the reliability of the quality of
potatoes that were supplied in the markets. Nevertheless; assembler-wholesalers (37%);
retailers (35%) give an extreme response (never consider and moderately agree) also with
wholesalers (30%) moderately agree and strongly agree that buyers were always satisfied
to the variety, price, and quality/quantity of potato.
The averages implies that majority of the production, assembly, distribution and
retailing group moderately agree on the statements related to product quality satisfaction.
Besides of agreeing on other statements related to product quality satisfaction; farmers,
financier-assembler-wholesalers, trucker-wholesalers and retailers moderately agree
while assembler-wholesalers, wholesalers and wholesale-retailers never considered
selling potatoes on credit arrangement.
The result confirms the findings of Le Heron, (2001) on the knowledge gap
between farmers and processors about e.g. business practices, product supply, quality
expectations therefore; farmers and processors pose different questions to improve supply
chain performance which leads them to run the risk of miss-specifying each other’s
decision process.
Descriptive and test statistics was done to confirm the differences of each actor
and ranked (chi-square) the statements according to the most and the least important as
perceived by the actors.
Measuring Performance in the Spot Market Chains for Potato
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27

Table 4b presents the descriptive and test statistics result on product quality
satisfaction. The weighted average/mean implies that most of the chain actors moderately
agree on the statements related to product quality satisfaction except on statement number
six where they never considered/undecided with it. The production, assembly,
distribution and retailing group focused more on orders and deliveries of potatoes when
needed while satisfaction as to variety of product, price and quality/quantity of potato
was the least. However, test statistics further implies that there are highly significant
difference on the responses of chain actors on their achievement to
production/procurement/delivery targets and the delivery of potatoes when needed
(having an asymptotic significance of 0.005 and 0.000 respectively). There are also
significant differences (0.046) of chain actors on their responses on the reliability of
potatoes supplied in the market while there are no significant differences on their
responses on: the quality of potatoes produced/procured/sold meets their expectation, the
quality of potatoes delivered meets the buyer’s requirements, on their satisfaction with
the volume produced/procured or sold to the buyer, on their satisfaction selling potatoes

Table 4b. Descriptive and test statistics
chi-
assymptotic
Statement
Mean
df
square
significance
1. The quality of potatoes I produce/procure/sold meets my expectation.
3.91
6.12
3
0.106
2. The quality of potatoes delivered meets the buyer’s requirements.
3.74
7.75
3
0.051
3. I am satisfied with the volume I produce/procure or sold to the buyer.
3.95
7.67
3
0.053
4. I always achieve my production/procurement/delivery targets.
3.54
12.68
3 0.005**
5. I am satisfied to fulfill the orders and deliveries of potatoes when needed.
3.64
21.51
3 0.000**
6. I am satisfied selling potatoes to buyers on credit arrangement.
2.82
6.87
3
0.076
7. The quality of potatoes I supplied in the market is reliable.
3.95
8.01
3
0.046*
8. The buyers are always satisfied as to variety of product, price, and
3.78
3.71
3
0.292
quality/quantity.
Legend: significant*
higly significant**

Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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28

to buyers on credit arrangement, and the buyers are always satisfied as to variety of
product, price, and quality/quantity. Result implies that buyers are dependent on physical
quality supplied in the market.

b. Flexibility Performance

Aramyam, (2007) defines flexibility as the degree to which supply chain can
respond to changing environment and extraordinary customer service requests.
Table 5a showed the indicators to measure the flexibility performance of the
actors in the spot market chains for potato.
As to the desired volume of potato produced/procured when buyers need it, some
of the farmers (47%) and wholesalers (40%) never considered while assembler-
wholesalers (32%) give multiple same response (undecided, moderately agree and
strongly agree). However, retailers (28%) has an extreme response (undecided and
moderately agree) on flexibility performance number one. According to the exert of
effort to produced/procured the desired volume and quality when buyers demand it, some
of the farmers (44%), assembler-wholesalers (42%), wholesaler-retailers (49%) and
retailers (41%) moderately agree while most of the trucker-wholesalers (58%) strongly
agree on it. Moreover, farmers (42%), assembler-wholesalers (53%), financier-assembler-
wholesalers (39%), trucker-wholesalers (50%), wholesalers (40%) and retailers (43%)
moderately agree on the flexibility of buyers to buy potatoes regardless of the
quality/quantity. Nevertheless, as to buyer and seller has little conflict in their business
transactions, some of the farmers (7%), assembler-wholesalers (5%), financier-
assembler-wholesalers (33%), trucker-wholesalers (8%), wholesale-retailers (5%) and
retailers (15%) strongly disagreed. In addition to that, there were an extreme response of
Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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29

farmers (35%), financier-assembler-wholesalers (33%), wholesalers (30%) and retailers
(38%) while mostly of the trucker-wholesalers (58%) moderately agree on buyers and
sellers have little conflict related to their business transactions.
Majority of the farmers, assembler-wholesalers, trucker-wholesalers, financier-
assembler-wholesalers, wholesalers, wholesale-retailers and retailers moderately agree
that they can respond to changing environment. Moreover, trucker-wholesalers and
wholesalers strongly agree on exerting effort to produced/procured the desired volume
and quality when buyers demand it.

Table 5a. Performance of chain actors according to flexibility
1
2
3
4
5

Statement
N % N
%
N
%
N
%
N
% Ave.
FARMER











1. I can produce/procure the desired volume
1
2
9
21
20
47
10
23
3
7
3
when buyers needed it.
2. I exert effort to produce/procure the
desired volume and quality when buyers
1
2
2
5
10
23
19
44
11 26
4
demand it.
3. The buyer is flexible to buy potatoes
0
0
3
7
14
33
18
42
8
19
4
regardless of quantity and quality.
4. The buyer and seller have little conflict in
3
7
7
16
15
35
15
35
3
7
3
the business transaction.
ASSEMBLER-WHOLESALER


1. I can produce/procure the desired volume
0
0
1
5
6
32
6
32
6
32
4
when buyers needed it.
2. I exert effort to produce/procure the
desired volume and quality when buyers
0
0
0
0
6
32
8
42
5
26
4
demand it.
3. The buyer is flexible to buy potatoes
0
0
0
0
5
26
10
53
4
21
4
regardless of quantity and quality.
4. The buyer and seller have little conflict in
1
5
2
11
5
26
10
53
1
5
3
the business transaction.
FINANCIER-ASSEMBLER-WHOLESALER
1. I can produce/procure the desired volume
0
0
1
6
4
22
7
39
6
33
4
when buyers needed it.
2. I exert effort to produce/procure the
desired volume and quality when buyers
0
0
1
6
1
6
8
44
8
44
4
demand it.


Measuring Performance in the Spot Market Chains for Potato
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30

Table 5a. Continued…
1
2
3
4
5

Statement
N
%
N
%
N
%
N
%
N
% Ave.
3. The buyer is flexible to buy potatoes
1
6
0
0
4
22
7
39
6
33
4
regardless of quantity and quality.
4. The buyer and seller have little conflict in
1
6
0
0
6
33
6
33
5
28
4
the business transaction.
TRUCKER-WHOLESALER
1. I can produce/procure the desired volume
1
8
1
8
2
17
3
25
5
42
4
when buyers needed it.
2. I exert effort to produce/procure the
desired volume and quality when buyers
0
0
1
8
1
8
3
25
7
58
5
demand it.
3. The buyer is flexible to buy potatoes
0
0
0
0
3
25
6
50
3
25
4
regardless of quantity and quality.
4. The buyer and seller have little conflict in
1
8
0
0
2
17
7
58
2
17
4
the business transaction.
WHOLESALER
1. I can produce/procure the desired volume
0
0
0
0
4
40
3
30
3
30
4
when buyers needed it.
2. I exert effort to produce/procure the
desired volume and quality when buyers
0
0
0
0
2
20
3
30
5
50
5
demand it.
3. The buyer is flexible to buy potatoes
0
0
0
0
3
30
4
40
3
30
4
regardless of quantity and quality.
4. The buyer and seller have little conflict in
0
0
2
20
3
30
3
30
2
20
4
the business transaction.
WHOLESALER-RETAILER
1. I can produce/procure the desired volume
1
3
3
8
9
24
11
30
13 35
4
when buyers needed it.
2. I exert effort to produce/procure the
desired volume and quality when buyers
1
3
0
0
3
8
18
49
15 41
4
demand it.
3. The buyer is flexible to buy potatoes
0
0
1
3
11
30
16
43
9
24
4
regardless of quantity and quality.
4. The buyer and seller have little conflict in
2
5
3
8
11
30
16
43
5
14
4
the business transaction.
RETAILER
1. I can produce/procure the desired volume
3
6
9
17
15
28
15
28
12 22
3
when buyers needed it.
2. I exert effort to produce the desired
volume and quality when buyers demand
3
6
5
9
10
19
22
41
14 26
4
it.
3. The buyer is flexible to buy potatoes
4
7
7
13
11
20
23
43
9
17
3
regardless of quantity and quality.
4. The buyer and seller have little conflict in
8
15
5
9
19
35
20
37
2
4
3
the business transaction.

Measuring Performance in the Spot Market Chains for Potato
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31


Table 5b presents the descriptive and test statistics according to flexibility
performance. The mean implies that most of the chain actors moderately agree on; the
desired volume of potato produced/procured when buyers needed it, exerting effort to
produce the desired volume and quality when buyers demand it, and the buyer is flexible
to buy potatoes regardless of quantity and quality while they never considered/undecided
on the buyer and seller have little conflict in the business transaction. The production,
assembly, distribution and retailing group focused more on the production and
procurement of the desired volume of potato (15.192) when buyers needed it while
flexibility of buyers to buy potatoes regardless of quality and quantity was the least
(7.123). Furthermore, chain actors differ significantly on their understanding on the
desired volume of potato produced/procured when buyers needed it (0.002), exerting
effort to produce the desired volume and quality when buyers demand it (0.026), and
buyer and seller have little conflict in the business transaction (0.031).
Table 5b. Descriptive and test statistics
assymptotic
Statement
Mean
chi-square
df
significance
1. I can produce/procure the desired
3.60
15.192
3
0.002**
volume when buyers needed it.
2. I exert effort to produce the desired
volume and quality when buyers
4.00
9.300
3
0.026*
demand it.
3. The buyer is flexible to buy potatoes
3.75
7.123
3
0.068
regardless of quantity and quality.
4. The buyer and seller have little
3.35
8.873
3
0.031*
conflict in the business transaction.
* **


Measuring Performance in the Spot Market Chains for Potato
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32

c. Efficiency Performance

As cited by Lai et al., 2002 efficiency measures how well the resources were
utilized this include the production costs, profit, return on investment and inventory.
Table 6a presents the efficiency performance of the actors. Some of the farmers
(27%) and trucker-wholesalers (50%) strongly agree while assembler-wholesalers (47%),
wholesale-retailers (49%) and retailers (44%) moderately agree on their happiness to
produce the desired volume out of their limited resources. In addition to that, financier-
assembler-wholesaler (28%) and wholesalers (30%) has multiple equal responses
(undecided, moderately agree and strongly agree) on the said statement. Moreover, as to
the income received is adequately rewarding; farmers (2%) and retailers (3%) strongly
disagree for the reason that they maybe were not rewarded. However, majority of the
financier-assembler-wholesalers (61%) moderately agree while half of the trucker-
wholesalers (50%) also moderately agree on the efficiency statement number two.
Moreover, farmers (40%) and assembler-wholesaler-retailers (47%) moderately agree
while financier-assembler-wholesalers (44%), wholesalers (50%), wholesale-retailers
(51%) and retailers (43%) strongly agree that they exert effort to reduce the cost of
production. In addition to statement number three, trucker-wholesalers (42%) has an
extreme response with it. (moderately agree and strongly disagree). Nevertheless, as to
the satisfaction with the rate of return to their investment; farmers (42%) never
considered, most of the assembler-wholesalers (63%), trucker-wholesalers (58%)
moderately agree and wholesalers (60%) also moderately agree.

Majority of the chain actors moderately agree on the statements related to
efficiency performance but there are some like farmer who never considered/undecided
that they were satisfied with the rate of return to their investment while there were some
Measuring Performance in the Spot Market Chains for Potato
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33

also like trucker-wholesalers and wholesaler-retailers who strongly agree on exerting
effort to reduce their cost of procurement.
Table 6a. Performance of chain actors acording to efficiency
1
2
3
4
5
Statement

N % N %
N
%
N
%
N
%
Ave.
FARMER
1. I am happy to produce the desired volume
1
2 2
5 11 26
13 30 16 37
4
out of my limited resources.
2. The income I received is adequately
1
2 4
9 14 33
16 37
8 19
4
rewarding.
3. I exert effort to reduce the cost of
0
0 3
7 10 23
17 40 13 30
4
production.
4. I am satisfied with the rate of return to my
0
0 7 16 18 42
10 23
8 19
3
investment.
ASSEMBLER-WHOLESALER
1. I am happy to produce the desired volume
0
0 0
0
7 37
9 47
3 16
4
out of my limited resources.
2. The income I received is adequately
0
0 0
0
6 32
8 42
5 26
4
rewarding.
3. I exert effort to reduce the cost of
0
0 0
0
4 21
9 47
6 32
4
production.
4. I am satisfied with the rate of return to my
0
0 1
5
2 11
12 63
4 21
4
investment.
FINANCIER-ASSEMBLER-WHOLESALER
1. I am happy to produce the desired volume
2 11 0
0
5 28
5 28
5 28
3
out of my limited resources.
2. The income I received is adequately
0
0 0
0
2 11
11 61
5 28
4
rewarding.
3. I exert effort to reduce the cost of
0
0 0
0
4
22
6 33
8 44
4
production.
4. I am satisfied with the rate of return to my
0
0 0
0
4
22
8 44
6 33
4
investment.
TRUCKER-WHOLESALER
1. I am happy to produce the desired volume
0
0 1
8
1
8
4 33
6
50
5
out of my limited resources.
2. The income I received is adequately
0
0 0
0
3
25
6 50
3
25
4
rewarding.
3. I exert effort to reduce the cost of
0
0 0
0
2
17
5 42
5
42
5
production.
4. I am satisfied with the rate of return to my
0
0 0
0
2
17
7 58
3
25
4
investment.
WHOLESALER
1. I am happy to produce the desired volume
0
0
1 10
3
30
3
30
3
30
4
out of my limited resources.
2. The income I received is adequately
0
0
3 30
1
10
5
50
1
10
3
rewarding.

Measuring Performance in the Spot Market Chains for Potato
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34

Table 6a. Continued…
1
2
3
4
5
Statement

N % N %
N
%
N
%
N
%
Ave.
3. I exert effort to reduce the cost of
0
0
2
20
2
20
1
10
5
50
4
production.
4. I am satisfied with the rate of return to my
0
0
1
10
1
10
6
60
2
20
4
investment.
WHOLESALER-RETAILER
1. I am happy to produce the desired volume
0
0
0
0
5
14
18
49 14 38
4
out of my limited resources.
2. The income I received is adequately
0
0
1
3
7
19
17
46 12 32
4
rewarding.
3. I exert effort to reduce the cost of
0
0
1
3
5
14
12
32 19 51
5
production.
4. I am satisfied with the rate of return to my
1
3
2
5
9
24
15
41 10 27
4
investment.
RETAILER
1. I am happy to produce the desired volume
2
4
3
6
12 22
24
44 13 24
4
out of my limited resources.
2. The income I received is adequately
1
2
1
2
11 20
25
46 16 30
4
rewarding.
3. I exert effort to reduce the cost of
1
2
3
6
9
17
18
33 23 43
4
production.
4. I am satisfied with the rate of return to my
1
2
0
0
11 20
27
50 15 28
4
investment.


Table 6b shows the descriptive and test statistics of chain actors according
efficiency performance. Chain actors moderately agree on all of the efficiency
statements. According to the chain actors, satisfaction with the rate of return to their
investment was the first indicator to measure efficiency performance or they focused
more on the said statement while exerting effort to reduce the cost of production were the
least. Moreover, test statistics findings shows (0.005) shows that chain actors
significantly differ of their responses on their satisfaction with the rate of return to their
investment. Respondents also had common understanding or they had no significant
difference on their responses with the efficiency statements one, two and three (having an
asymptotic significance of 0.225, 0.145 and 0.464 respectively).

Measuring Performance in the Spot Market Chains for Potato
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35

Table 6b. Descriptive and test statistics
asymptotic
Statement
Mean
chi-square
df
significance
1. I am happy to produce the desired volume out of my
3.94
4.365
3
0.225
limited resources.
2. The income I received is adequately rewarding.
3.93
5.402
3
0.145
3. I exert effort to reduce the cost of production.
4.10
2.563
3
0.464
4. I am satisfied with the rate of return to my investment.
3.89
12.97
3
0.005**
**
d. Responsiveness Performance

Salvador et al. told that responsiveness aims to provide the requested products
with a short lead time.
Table 7a the indicator to measure the responsiveness performance of actors in the
spot market chain for potato. Some of the farmers (7%), assembler-wholesalers (5%),
wholesaler-retailers (10%), and retailers (13%) strongly disagree that they can supply the
market with desired quality/quantity when needed. However, financier-assembler-
wholesalers (39%) and trucker-wholesalers (58%) moderately agree while multiple same
response rated by wholesale-retailers (30%) on the statement number one. As to the
scheduling of deliveries to meet the time in the market, some of the farmers (9%) and
retailers (26%) strongly agree of it. Some farmers strongly disagree for the reason that
they don’t schedule their deliveries but rather, their harvest depends on the maturity and
market prevailing price of potato in the market. Also with retailers, some of them
strongly disagree for the reason that their customers are the one who go with them in the
market. Moreover, assembler-wholesalers (42%), trucker-wholesalers (58%), and
wholesalers (40%) strongly agree while there was an extreme response (undecided and
strongly disagree) of financier-assembler-wholesalers (33%) on scheduling of deliveries
to meet the time in the market. According to finding time to deliver potatoes when
Measuring Performance in the Spot Market Chains for Potato
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36

customer/market needs it some of the farmers (12%), financier-assembler-wholesalers
(6%), trucker-wholesalers (8%), wholesalers (10%), wholesaler-retailers (14%) and
retailers (19%) strongly disagree while assembler-wholesalers (42%) strongly agree on it.
Nevertheless, there was an extreme response (undecided and strongly agree) of financier-
assembler-wholesalers (39%) also with trucker-wholesalers (moderately agree and
strongly agree) on acting to the demand/complaints of buyers related to quality/ quantity
of potato.
The average implies that most of the chain actors moderately agree that they can
supply/provide the requested product with a short lead time.
Result findings has a similarity with the findings of Salvador et al. (2001), that
when buyers and suppliers interact on issues related to material flows and quality, there
were significant effects in terms of speed and delivery punctuality.

Table 7a. Performance of chain actors according to responsiveness
1
2
3
4
5
Statement

N
%
N
%
N
%
N
%
N
% Ave.
FARMER











1. I can supply the market with desired
3
7
17 40 14
33
6
14
3
7
3
quality/quantity when needed.
2. I always schedule my deliveries to meet
4
9
11 26 13
30
8
19
7
16
3
the time in the market.
3. I always find time to deliver potatoes
5
12
12 28 13
30
9
21
4
9
3
when customers/market needs it.
4. I always act on the demand/complaints of
3
7
7
16 17
40
11
26
5
12
3
buyers related to quality/quantity.
ASSEMBLER-WHOLESALER
1. I can supply the market with desired
1
5
0
0
2
11
10
53
6
32
4
quality/quantity when needed.
2. I always schedule my deliveries to meet
0
0
2
11
6
32
3
16
8
42
4
the time in the market.
3. I always find time to deliver vegetables
0
0
2
11
3
16
6
32
8
42
4
when customers/market needs it.
4. I always act on the demand/complaints of
0
0
1
5
5
26
8
42
5
26
4
buyers related to quality/quantity.

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37

Table 7a. Continued…
1
2
3
4
5
Statement

N
%
N
%
N
%
N
%
N
% Ave.
FINANCIER-ASSEMBLER-WHOLESALER
1. I can supply the market with desired
0
0
0
0
5
28
7
39
6
33
4
quality/quantity when needed.
2. I always schedule my deliveries to meet
1
6
0
0
6
33
5
28
6
33
4
the time in the market.
3. I always find time to deliver potatoes
1
6
0
0
4
22
8
44
5
28
4
when customers/market needs it.
4. I always act on the demand/complaints of
0
0
0
0
7
39
4
22
7
39
4
buyers related to quality/quantity.
TRUCKER-WHOLESALER











1. I can supply the market with desired
0
0
0
0
2
17
7
58
3
25
4
quality/quantity when needed.
2. I always schedule my deliveries to meet
0
0
1
8
3
25
1
8
7
58
4
the time in the market.
3. I always find time to deliver potatoes
1
8
0
0
2
17
5
42
4
33
4
when customers/market needs it.
4. I always act on the demand/complaints of
0
0
0
0
2
17
5
42
5
42
5
buyers related to quality/quantity.
WHOLESALER

1. I can supply the market with desired
1
10
1
10
5
50
2
20
1
10
3
quality/quantity when needed.
2. I always schedule my deliveries to meet
0
0
3
30
1
10
2
20
4
40
4
the time in the market.
3. I always find time to deliver potatoes
1
10
1
10
2
20
3
30
3
30
4
when customers/market needs it.
4. I always act on the demand/complaints of
0
0
0
0
4
40
3
30
3
30
4
buyers related to quality/quantity.
WHOLESALER-RETAILER

1. I can supply the market with desired
0
0
4
11 11
30
11
30
11
30
4
quality/quantity when needed.
2. I always schedule my deliveries to meet
6
16
5
14
4
11
16
43
6
16
3
the time in the market.
3. I always find time to deliver potatoes
5
14
4
11
6
16
12
32
10
27
3
when customers/market needs it.
4. I always act on the demand/complaints of
1
3
1
3
4
11
21
57
10
27
4
buyers related to quality/quantity.
RETAILER
1. I can supply the market with desired
7 13 11
20 15
28
14 26
7 13
3
quality/quantity when needed.
2. I always schedule my deliveries to meet
14 26
8
15 13
24
10 19
9 17
3
the time in the market.
3. I always find time to deliver potatoes
10 19 10
19 13
24
11 20
10 19
3
when customers/market needs it.
4. I always act on the demand/complaints of
1
2
9
17 19
35
16 30
9 17
3
buyers related to quality/quantity.


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Table 7b presents the descriptive and test statistics according to responsiveness
performance of actors in the spot market chains for potato. Respondents focused more on
always acting on the demand/complaints of buyers related to quality/quantity for as long
as to the improvement of their service while always scheduling their deliveries to meet
the time in the market was the least. Result shows that all the responsiveness statements
are important to measure performance as shown by their computed chi-squares. Test
statistics findings also shows that chain actors significantly differ from each other on
responses on all the statements related to responsiveness performance as follows: I can
supply the market with desired quality/quantity when needed, I always schedule my
deliveries to meet the time in the market, I always find time to deliver potatoes when
customers/market needs it and I always act on the demand/complaints of buyers related to
quality/quantity.

Table 7b. Descriptive and test statistics
chi-
asymptotic
Statement
Mean
df
square
significance
1. I can supply the market with desired quality/quantity when
3.42
0.000
3
**0.000
needed.
2. I always schedule my deliveries to meet the time in the
3.32
0.002
3
**0.002
market.
3. I always find time to deliver potatoes when
3.34
0.000
3
**0.000
customers/market needs it.
4. I always act on the demand/complaints of buyers related to
3.66
0.000
3
**0.000
quality/quantity.
**

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39

SUMMARY, CONCLUSION AND RECOMMENDATION


Summary


Mostly of the chain actors are: ranging from age (21-30); female except in
farming, Assemble-Wholesaling and Trucker-Wholesaling where male were high in
number; married; catholic; attain high school and college level; one to five years engaged
in vegetable business and no organizational affiliation.

Most of the respondents moderately agreed on product quality satisfaction of
potato especially on the reliability regarding on quality of potatoes supplied in the
market. Moreover the researcher found out that majority of the chain actors strongly
agreed that they are satisfied to fulfill the orders and deliveries of potatoes when needed.
Although, respondents are agreed on other statement related to product quality
satisfaction, average shows that chain actors (farmers, financier-assembler-wholesalers,
trucker-wholesalers and retailers) moderately disagree while assembler-wholesalers,
wholesalers and wholesale-retailers never considered/undecided selling potato on credit
arrangement. The mean/weighted average result showed that chain actors moderately
agree mostly on the statements related to product quality satisfaction. Most of the chain
actors have common understanding or had no significant difference on responses in the
product quality satisfaction statements one, two, three, six and eight but they significantly
differ of responses on the product quality satisfaction statements four, five and seven.
Majority of the respondents: the production, assembly, distribution and retailing
group moderately agreed that buyers are flexible to buy potatoes regardless to
quality/quantity. However, farmers and retailers has an extreme response (undecided and
moderately agreed) on having little conflict by buyers and sellers to their business
Measuring Performance in the Spot Market Chains for Potato
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40

transaction. The test statistics finding implies that respondents have a common
understanding on buyers was flexible to buy potatoes regardless to quality/quantity while
they significantly differ on understanding on flexibility performance statements one, two
and four.
Regarding to efficiency performance; chain actors revealed that they are
generating income in vegetable business and the rate of returns to their investment is
satisfying while financier-assembler-wholesalers, trucker-wholesalers, wholesaler-
retailers and retailers strongly agree on exerting effort to reduce the cost of
production/procurement. Furthermore, test statistics validated that they have common
understanding to the stated statements on efficiency.

As to the responsiveness performance, trucker wholesalers strongly agreed on
scheduling of their deliveries to meet the time in the market, they deliver potato everyday
at the spot markets while retailers strongly disagreed for the reason that they don’t
schedule their deliveries but rather their customers are regular or not were the one to go
with them at the market. Chain actors have significant differences, which mean that they
differ on understanding related to responsiveness performance.

Conclusion


Based on the findings of the study on product quality satisfaction the researcher
found out that chain actors focused much on their satisfaction in fulfill the orders and
deliveries of potatoes when needed while the satisfaction of buyers as to variety of
product, price, and quality /quantity was the least. However, respondents have common
understandings on the responses in product quality statements one, two, three, six and
eight while they significantly differ on responses on product quality satisfaction
Measuring Performance in the Spot Market Chains for Potato
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41

statements four, five and seven. Moreover, descriptive statistics on flexibility
performance shows that buyers and sellers have little conflict and this was truly
happening. All of the statements on efficiency are important to measure performance of
chain actors as validated by their responses. Nevertheless, farmers strongly disagreed that
they are responsible to supply the market with the desired volume and quality when
needed while the assembly group moderately agreed that they can.

Recommendation
In order to have a good performance, chain actors must reclassify the potato to
meet product quality satisfaction. Establishment of business to business relationship
especially trust must be observed and there should be communication to have a good
bonding of each actor to avoid opportunistic creditors. As to the flexibility, buyers must
have an advanced notice in accordance with the quality and volume to be procured to
give an ample time to suppliers in order for them to supply what they want. The chain
actors must possess the right attitude in order to satisfy the requirements or needs of the
buyers and to minimize conflicts between them. Moreover, chain actor’s responsibility to
deliver potato must be always on time. Chain actors must also act on demand/complaints
of buyers related to quality/quantity for the improvement of business transaction.






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APPENDIX A

Communication Letter
November, 2010


Sir/Madam,


Warm greetings!


I am a graduating student of Benguet State University taking up Bachelor of
Science in Agribusiness major in Enterprise Management. As part of the course
requirement, I am presently conducting an undergraduate research study entitled
“MEASURING PERFORMANCE OF ACTORS IN THE SPOT MARKET CHAINS
FOR POTATO”.

In connection with this, may I ask you to fill up or answer the questionnaire made
for this purpose? Rest assured that all the information you would provide would be
treated with outmost confidentiality. Your favorable approval was highly appreciated.

Thank you for your kindness and cooperation. May God bless you!





Sincerely yours,

DANTE T. FRANCIS
Researcher




Noted by:







LEOPOLDO N. TAGARINO







Adviser
Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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46


APPENDIX B

Interview Schedule

This research aims to investigate the potato supply networks. All information
solicited would be treated with confidentiality. Please answer the questions honestly by
putting (/) mark in the appropriate space provided for.
Thank you very much!
Respondent’s Name: (Optional) ______________________ No. ______
Respondent’s Group:
1. Production Group:

[ ] Farmers




2. Assembly (Collection) Group: [ ] Assembler-Wholesaler
[ ] Financier-Assembler-Wholesaler
[ ] Disposer
3. Distribution Group: [ ] Trucker-Wholesaler
[ ] Wholesale



[ ] Wholesale-Retailer
4. Retailing Group: [ ] Retailer

A. SOCIO-ECONOMIC PROFILE
1. Age: _____
2. Gender: [ ] Male
[ ] Female
3. Marital status: [ ] Single [ ] Married [ ] Separated [ ] Widowed
4. Religion: [ ] Catholic [ ] Protestant [ ] Others, specify______________
5. Educational background: [ ] Elementary [ ] High School [ ] College [ ] Vocational
6. Number of years engage in vegetable farming business: _____
10. Organizational affiliation: [ ] Farmers’ Association [ ] Cooperatives



[ ] others specify______________________________
B. Who were the buyers of the potato you produced/procured/? (Please identify)
[ ] Assembler-Wholesalers; [ ] Financier-Assembler-Wholesalers;
[ ] Trucker-Wholesalers; [ ] Wholesalers; [ ] Wholesaler-Retailers; [ ] Retailers
C. Where do you sell the potato produced/procured?
[ ] La Trinidad Potato Trading Post; [ ] Baguio Hangar Market
[ ] Private Trading Center in La Trinidad [ ] Metro Manila (Specify)____________
[ ] Other Market: Please specify _____________________
D. PERFORMANCE (Operations): Assess the performance of the supply network
operation using the following metrics.

D.1 Product Quality Satisfaction - consists of product safety and health; the sensory
properties and shell life and; product reliability and convenience.
a. The quality of potato I produce/procure/ 1 2 3 4 5
sold meets my expectation. Strongly Disagree
Strongly Agree
b. The quality of potato delivered meets
the buyer’s requirements. Strongly Disagree
Strongly Agree
Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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c. I am satisfied with the volume I produce/ 1 2 3 4 5
procure or sold to the buyer.
Strongly Disagree
Strongly Agree
d. I always achieve my production/procurement/
delivery targets.
Strongly Disagree
Strongly Agree
e. I am satisfied to fulfill the orders and deliveries
of potato when needed.
Strongly Disagree
Strongly Agree
f. I am satisfied selling potato
to buyers on credit arrangement.
Strongly Disagree
Strongly Agree
g. The quality of potato I supplied in
the market is reliable.
Strongly Disagree
Strongly Agree
h. The buyers are always satisfied as to variety
of product, price, and quality/quantity.
Strongly Disagree
Strongly Agree

D.2 Flexibility - indicates the degree to which supply chain can respond to changing
environment and extraordinary customer service requests




a. I can produce/procure the desired volume
when buyers needed it.
Strongly Disagree
Strongly Agree
b. I exert effort to produce/procure the desired volume
and quality when buyers demand it.
Strongly Disagree
Strongly Agree
c. The buyer is flexible to buy potato regardless
of volume and quality.
Strongly Disagree
Strongly Agree
d. The buyer and seller have little conflict in their
business transaction.
Strongly Disagree
Strongly Agree

D.3 Efficiency - measures how well the resources were utilized which include
production costs, profit, return on investment and inventory.


a. I am happy to produce/procure the desired volume
out of my limited resources.
Strongly Disagree
Strongly Agree
b. The income I received is
adequately rewarding.
Strongly Disagree
Strongly Agree
c. I exert effort to reduce the cost
of production/procurement. Strongly Disagree
Strongly Agree
d. I am satisfied with the rate of
return to my investment. Strongly Disagree
Strongly Agree

D.4 Responsiveness - aims at providing the requested products with a short lead time
a. I can supply the market with desired
quality/ quantity when needed. Strongly Disagree
Strongly Agree
b. I always schedule my deliveries to
meet the time in the market. Strongly Disagree
Strongly Agree
c. I always find time to deliver potato
when customer/ market need it. Strongly Disagree
Strongly Agree
d. I always act on the demand/ complaints of
buyers related to quality/ quantity. Strongly Disagree
Strongly Agree
Measuring Performance in the Spot Market Chains for Potato
/ FRANCIS, DANTE T. APRIL. 2011

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Document Outline

• Measuring Performance in the Spot Market Chainsfor Potato
  • BIBLIOGRAPHY
  • ABSTRACT
  • INTRODUCTION
  • REVIEW OF LITERATURE
  • METHODOLOGY
  • RESULTS AND DISCUSSION
  • SUMMARY, CONCLUSION AND RECOMMENDATION
  • LITERATURE CITED
  • APPENDICES

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