All the market boundary for a fertilizer plant is function of natural-gas prices (henry-hub), demand of nitrogen based fertilizer at county level, and transportation cost by mode (rail, truck and barge). The demand for nitrogenous fertilizers is largely driven by agriculture, wherein, the composition and pattern of crops varies widely with time and region. Variation and uncertainty in natural-gas prices and transportation cost results in pulsating market boundaries, the area that is served by a fertilizer plant. A combined approach of statistical analysis and geographic information systems (GIS) is used to build a spatial equilibrium model representing structure of supply chain network for United States comprising origins (fertilizer plant, point of imports), destinations (counties), and various mode of transportation (truck, rail and barge). Such approach helps in (a)visualizing the market boundaries, (b) structure of supply chain network of nitrogen based fertilizers, (c)analysis of potential impacts due changes in natural-gas prices.
Shakya, Sumadhur; Wilson, William; and Dahl, Bruce, "Pulsating Market Boundaries in Supply Chain Network of Nitrogenous Fertilizers" (2016). ICIS 2016 Pre-Conference Workshop Proceedings. 1.