("Jim Burns" wrote)
Example #2 The 2nd largest french fry factory in North America is just 15
miles from here. Farmers (not us) contract with them to grow potatoes.
When the farmers have more than they contract for, the factory makes them
an
offer. This year the open market is TWICE as high as the contract price
and
the factory offered them 10% over the contract price for their extra
potatoes. When the farmers rejected the offer the factory informed them
that they would buy them for less in Colorado, haul them to Wisconsin.
The
freight costs would add so much to their cost that they could have paid
the
local growers the open market price and ended up with a better product AND
supported a good relationship with their local suppliers.


Spud-Mart bought something else from Colorado - fear.


Paul