University of Wisconsin Center for Cooperatives
Journal of Agricultural Cooperation

Title Cost-of-Service vs. Uniform Pricing in a Cooperative Feed Manufacturing and Distribution System
Author(s) Keith K. Menzie, Paul V. Preckel, and Lee F. Schrader
Series Volume 2
Issue Date 1987
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 in 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.

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