Logistical strategies and risks in Canadian grain marketing

Logistics management in grain marketing has become very important with the maturity of the industry. This is particularly critical in the Canadian gra in marketing system, which has experienced disruptions for various reasons over many years. These problems have been the topic of numerous industry ev aluations, have resulted in a complaint about service obligations during th e 1996-97 crop year, and were addressed by the Estey Commission. A detailed model of the Canadian grain logistics system is developed in this paper to evaluate factors that cause disruptions, as well as the effect of several important logistics and marketing strategies on system performance. The results illustrate that there is sufficient randomness throughout the v arious functions of the system that it is expected that demurrage at the we st coast would periodically be an important cost. The frequency of service disruptions and demurrage are affected by several factors, including the di stribution of rough and damp grains, mis-graded grain and the level of expo rtable supplies. Several strategic variables affect system performance. The se include the aggressiveness in selling relative to capacity and the level of beginning port stocks.