Production planning in an indoor farm: Using time and space requirements to define an efficient production schedule and farm size

Abstract

Indoor agriculture is an innovative and environmentally sustainable approach to high-quality food production, utilizing advanced technology to reduce water usage by 95% and achieve a 100-fold increase in production per unit of land compared to conventional farming systems. These enclosed systems provide year-round production of pesticide-free fresh food, even in cities with less favourable climates, addressing food deserts and creating employment opportunities in urban areas. However, the industry faces significant challenges, primarily stemming from substantial investment and operating costs, exacerbated by a limited understanding of the input-output relationship within these systems. This study employs a bioeconomic framework to establish a foundational production function based on growth cycle duration (time) and required growing area (space). Through a partial budget analysis, a 19-day production schedule was identified to provide the highest contribution margin to profits. Results set the minimum size of this hypothetical lettuce indoor farm at 273 m2, rendering it suitable for installation in urban areas. The farm harvests 118 kg per day, within an 800 m2 growing area distributed across four vertically stacked shelves. Estimates of economic output sensitivity to exogenous factors in the US context are also presented, along with a comparison between cost-minimizing and revenue-maximizing strategies.