Optimizing Retail Fertilizer Dealer Inventory Levels

Retail fertilizer firms must cope with a high degree of uncertainty in their business operations. The amount of fertilizer farmers plan to buy each year changes with fertilizer prices and the prices of grain and other crops utilizing fertilizer. Farmer's plans are, in turn, adjusted by weather conditions at planting time. The timing and relative height of the peak spring application period varies from year to year. If the planting season is too wet or too late, Midwest farmers will switch from corn to soybeans, thus reducing their fertilizer purchases for the season