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Cost Analysis of Potential North Dakota Subterminal Systems

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  • Chase, Craig A.
  • Helgeson, Delmer L.

Abstract

The purpose of this study was to analyze the cost structures associated with subterminal facilities. An economic-engineering approach was used to determine the construction and operation costs of four different sizes of subterminal facilities operating at three different plant capacities. Profitability of subterminals was determined mainly by the volume of grain handled. If a subterminal marketed enough grain, it was able to incur both decreasing average fixed and average variable costs. The larger subterminals were found to be more profitable than the smaller facilities indicating the existence of economies of size in both the fixed and variable cost components. Profitability can be dramatically increased given the availability of internal financing for the construction cost and nondepreciable fixed costs. Upper Great Plains Transportation Institute Report No.44

Suggested Citation

  • Chase, Craig A. & Helgeson, Delmer L., 1983. "Cost Analysis of Potential North Dakota Subterminal Systems," Agricultural Economics Reports 23347, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaer:23347
    DOI: 10.22004/ag.econ.23347
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    File URL: https://ageconsearch.umn.edu/record/23347/files/aer156.pdf
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    References listed on IDEAS

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    1. Hise, Billy R. & Ethridge, Don E. & Shaw, Dale L., 1980. "Processing Plant Cost Estimation System: Documentation and User's Guide," Archive 259786, Texas Tech University, Department of Agricultural and Applied Economics.
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    Cited by:

    1. Ming, Dennis R. & Wilson, William W., 1983. "The Evolving Country Grain Marketing System in North Dakota," Agricultural Economics Reports 23381, North Dakota State University, Department of Agribusiness and Applied Economics.
    2. Koo, Won W. & Marshall, Douglas D., 1985. "Optimal Grain Distribution System and Subterminal Capacity in North Dakota," Agricultural Economics Reports 23422, North Dakota State University, Department of Agribusiness and Applied Economics.

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    Keywords

    Marketing; Agribusiness;

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