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Grain Storage in Developing Areas: Location and Size of Facilities
Author(s) -
Monterosso Cesar D. B.,
Wright Charles L.,
Lacerda Maria Ceclília S.,
Ofugi Noboru
Publication year - 1985
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240829
Subject(s) - exploit , decentralization , economies of scale , production (economics) , scale (ratio) , business , environmental economics , operations management , computer science , industrial organization , microeconomics , economics , marketing , geography , computer security , cartography , market economy
Abstract Storage planners in developing countries often exploit scale economies in grain facilities by building large units far from producers without accounting for the effect on transport costs. Capacitated networks with an approximate master program solve this plant size‐location problem, offering computational efficiency, ease of use, and productive interaction with planners unfamiliar with programming techniques. Tests with transport costs in three Brazilian production areas recommend decentralization of storage—more smaller units closer to farmers, a conclusion supported by sensitivity analysis and recent experience of farmers, planners, and cooperative officials.