AbstractUniform market‐share patterns have been assumed in specifying cost functions for assembly or delivery operations. A more realistic assumption is that market share decreases with distance from the plant. Procedures for specifying assembly or delivery‐cost functions for alternative linear market‐share patterns and for determining impacts of changes in market‐share patterns on costs and related results are developed and applied in an analysis of anhydrous ammonia retailing. These procedures permit more accurate estimates of cost‐volume relationships and make it possible to address questions about how firms should attempt to achieve volume increases.