The application of a decision rule for feed storage

The major objective of this thesis was to determine the economic feasibility of grain storage for the consumer of grain» The decision to purchase storage facilities requires a long term commitment of capital. It is therefore important that the costs and returns of the various storage alternatives  be carefully evaluated before the investment is made.

Investment costs were developed to determine the breakeven ownership cost of storage facilities. The breakeven analysis was applied to year around storage as insurance against shortages and advance purchases to reduce the cost of grain for later consumption. Advance purchases were discounted to give a present value cost and amortized to determine possible savings from storage* The results of advance purchases were then reviewed and compared as to their economic feasibility with the breakeven cost of storage, A method of determining expected cash prices was developed as part of the decision to make purchases in excess of consumption needs.

AZU_TD_BOX172_E9791_1981_310.pdf (1.57 MB)

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