Minimizing the Cost of Mixed Fertilizers and Location of Bulk Blending Plants - Part A
This material presents a study on minimizing the cost of mixed fertilizers and the optimal location of bulk blending plants. It is divided into two parts, with Part A focusing on the fundamentals of bulk blending plants and their role in producing dry-mixed granular fertilizers. The material outlines the flow of materials in the bulk blend marketing system, involving basic producers and their production of various nitrogen, phosphate, and N-P products. The blending plant is typically situated within a 50-mile radius of the farms it serves. Each phase of the bulk blend marketing system incurs costs, and it is the responsibility of the blender to determine the most cost-effective combination of these costs to deliver and apply plant nutrients on the farm. The material introduces a least-cost linear program developed by Mr. Walker to assist blenders in making informed decisions. It highlights the transportation and handling costs of the bulk blend marketing system and explores the impact of higher-analysis materials on reducing these costs. The benefits of using higher-analysis materials include decreased transportation costs and the ability to produce mixtures of higher nutrient analyses. The production of high-analysis grades is advantageous for blenders as it lowers their fixed and handling costs per unit of plant food. The material emphasizes the importance of considering delivered costs, fixed and operating costs, and finding the least-cost mixtures to deliver to the farm at the lowest price. Blenders can enhance their sales programs and improve their economic viability by optimizing these factors. The material concludes by mentioning how the Tennessee Valley Authority (TVA) supports blenders in determining the least-cost mixtures based on the materials available to them.