IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Bulk Fuel Distribution Costs For Cooperatives in North Dakota

  • Dahl, Bruce L.
  • Cobia, David W.
  • Dooley, Frank J.

Economic-engineering cost data and a simulation model were used to analyze the impact of sales density, size of sales area, sales volume, and equipment configuration on costs of bulk fuel delivery by cooperatives. Fixed costs accounted for the majority of delivery costs regardless of sales density or size of sales area, at least for the relevant range of these variables for North Dakota. Increasing the radius of a sales area from 5 to 50 miles increased average costs only $.02 to $.09/gal. Doubling sales by either doubling the size of the sales area or the sales density reduced average total costs by nearly 50%. Thus, cooperatives with excess delivery capacity could achieve significant savings if they consolidate to operate closer to the capacity of delivery equipment. Small storage facilities (say 50,000 gal.) place little or no restriction on operations because deliveries from bulk fuel terminals are reliable and on a timely basis. Therefore, the economic rationale for building larger storage facilities would include speculation on price changes and as a response to future expectations rather than current operating requirements. The impact of the size of load-out pipes (2" or 3") and delivery trucks (2,000 or 4,000 gal.) is significant in some instances. The larger load-out pipes are most economical for high sales densities. Larger trucks have a comparative advantage in large sales areas with lower sales densities.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://purl.umn.edu/23435
Download Restriction: no

Paper provided by North Dakota State University, Department of Agribusiness and Applied Economics in its series Agricultural Economics Reports with number 23435.

as
in new window

Length:
Date of creation: 1995
Date of revision:
Handle: RePEc:ags:nddaer:23435
Contact details of provider: Postal: PO Box 5636, Fargo, ND 58105-5636
Phone: (701) 231-7441
Web page: http://www.ext.nodak.edu/homepages/aedept/Email:


More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:nddaer:23435. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.