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Cost-of-Service vs. Uniform Pricing in a Cooperative Feed Manufacturing and Distribution System

Author

Listed:
  • Menzie, Keith L.
  • Preckel, Paul V.
  • Schrader, Lee F.

Abstract

A 40-region nonlinear programming model of a cooperative livestock feed production and distribution system, including possibilities for on-farm processing, is used to compare system organization and performance given two pricing strategies. Use of one price regardless of location results I higher average costs to patrons than pricing products to reflect cost to each region. Transportation costs are increased using uniform pricing. Cost effects are small and may be offset by other benefits of uniform pricing.

Suggested Citation

  • Menzie, Keith L. & Preckel, Paul V. & Schrader, Lee F., 1987. "Cost-of-Service vs. Uniform Pricing in a Cooperative Feed Manufacturing and Distribution System," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 2, pages 1-10.
    • Handle: RePEc:ags:joagco:46201
    DOI: 10.22004/ag.econ.46201
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    Keywords

    Agribusiness;

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