Abstract
The objective of this study was to explore the cost feasibility of creating a fuel pellet manufacturing operationutilizing cotton gin by-products from a commercial gin processing 55,000 bales of cotton per year. An economic model wasdeveloped and evaluated in order to conservatively address the effects of key elements such as marketing, transportation, andmanufacturing. The cost system model was developed and analyzed to examine the factors influencing the sensitivity ofcritical areas such as cost and profits. The cost system model simulated changes for 24 cost variables associated with theproposed fuel pellet operation. Results from the analysis indicate the probability of obtaining a 15% return on investment(ROI) varied depending on the mode of freight used to ship the product to any of the distribution hubs evaluated. If the productwas shipped by truck, the ROI was 27.3%, or 49.1% when shipped by rail. Based upon the information contained in this study,it appears that a fuel pellet operation can be a viable means of utilizing cotton gin by-products to enhance revenue.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call