PRESENTATION BYRIDABVISHALALEX

INTRODUCTION

Preliminary Analysis

Determine the cost/savings benefit to the farmer Vs. debeaking

debeaked ODI savingsmortality .216 .108 .108feed 7.04 6.837 .203labor .034 .033 .001egg laying .099 --- .099 .411cost of lens -.08total savings per bird .331

Calculation of mortalitydebeaked = 9% (pg. 5,first paragraph)i.e. 9% of $2.40 (exhibit 5)= $0.216

ODI = 4.5% (pg.. 5, 5th paragraph)i.e. 4.5% of $2.40(exhibit 5) = $0.108

debeaked ODI savingsmortality .216 .108 .108feed 7.04 6.837 .203labor .034 .033 .001egg laying .099 --- .099 .411cost of lens -.08total savings per bird .331

Calculation for the feeddebeaked it is $7.04 (exhibit 5)

ODI calculations24.46 - 23.68 (on page 6, 2nd paragraph).78 / 100 = .0078 per chicken per day.0078 * 365 = 2.847 lbs. for the whole yearbenefit to the farmer $158 per ton, (pg.. 6, 2nd para.)will be $0.158 per kg.1 lbs.. = .453 kg. Benefit will be 1.28969 kg. Per hen1.28969 * .158 = .203therefore 7.04 - .203 = $6.837

debeaked ODI savingsmortality .216 .108 .108feed 7.04 6.837 .203labor .034 .033 .001egg laying .099 --- .099 .411cost of lens -.08total savings per bird .331

Calculation for labor

debeaked (pg. 5, 2nd para)3 * $2.5 = $7.50$7.5 / 220 = $0.34

ODI (pg. 5, last para)3 * $2.50 = $7.50$7.50 / 225 = $.033

debeaked ODI savingsmortality .216 .108 .108feed 7.04 6.837 .203labor .034 .033 .001egg laying .099 --- .099 .411cost of lens -.08total savings per bird .331

Calculation for egg laying (trauma)

debeaking (pg. 5, 1st para)loss one egg per 5 monthtotal loss is 2.4 eggs per year per hentotal cost per dozen = $0.50 ( exhibit 5)total loss = 50 * 2.4 / 12 = $0.099 per hen

ODIno loss (pg. 5, last line)

debeaked ODI savingsmortality .216 .108 .108feed 7.04 6.837 .203labor .034 .033 .001egg laying .099 --- .099 .411cost of lens (pg.7, first line) -.08total savings per bird .331

Determine the variable costs per pair of lens

manufacturing (pg. 2, para 5) .032injection 12000/15 million .0008(pg.2 para 5)box cost (pg 7, note) .00168Plastic box .10filling cost .14order processing .18total .42divide by no. of lenses ie 250 ______ total variable cost .03448

Determine the fixed costs

Fixed costsa) payment to new world (pg.2, para 5) $25,000b) office and warehouse (pg.7, table b) 196,000c) head quarters expense (pg.7, para 2) 184,000(assuming 20 million pair)d) salesmen 280,000e) technical representatives 70,000f) advertising and promotional (pg. 7, 2nd para) 100,000g) trade shows (pg. 7, 2nd para) 100,000total fixed costs $ 955,000

Assuming seven sales men, target California (flock size 20,000 and above) as per exhibit 3.Flock size No. farms No. chickens20000-49000 320 9,517,45350000-99000 114 7,459,994100000&above 87 22,952,283 521 39,929,730per salesmen can cover 80 farms each year as assumed in page 6 last paragraph so 521/80 = 6.5 so taking 7 salesmen

so 7 * 40000 (pg.6 ,last paragraph) = 280,000

Fixed costsa) payment to new world (pg.2, para 5) $25,000b) office and warehouse (pg.7, table b) 196,000c) head quarters expense (pg.7, para 2) 184,000(assuming 20 million pair)d) salesmen 280,000e) technical representatives 70,000f) advertising and promotional (pg. 7, 2nd para) 100,000g) trade shows (pg. 7, 2nd para) 100,000total fixed costs $ 955,000

Calculation for technical representativesone technical representative is enough for five salesmen (pg. 6, last para)therefore two are required for seven salesmen2 * 35000 (pg 6, last para) = 70000

Fixed costsa) payment to new world (pg.2, para 5) $25,000b) office and warehouse (pg.7, table b) 196,000c) head quarters expense (pg.7, para 2) 184,000(assuming 20 million pair)d) salesmen 280,000e) technical representatives 70,000f) advertising and promotional (pg. 7, 2nd para) 100,000g) trade shows (pg. 7, 2nd para) 100,000total fixed costs $ 955,000

Determine the appropriate price range

Range of pricing is between $.08 and $.24if we use price for pair of lenses $.24 $.08variable costs .03448 .03448 (as calculated)fixed costs .04775 .04775 profits for ODI (per pair) $.1577 $(-.00223)

Calculation of fixed costs$955,000 / 20,000,000 = $0.04775

Range of pricing is between $.08 and $.24if we use price for pair of lenses $.24 $.08variable costs .03448 .03448 (as calculated)fixed costs .04775 .04775 profits for ODI (per pair) $.1577 $(-.00223)

Strategic analysis

price selection should be

The breakeven at $.24 is going to be 4,646,750 pairs of lenses.Which seems achievable because we are targeting 40,000,000.(calculated earlier)

Calculation of breakeven quantityfixed costs = (price per pair - v.c. per pair) * break even quantity955,000 = (.24 - .03448) * Q955,000 = .20552QQ = 955,000 / .20552Q = 4646750

No!

Thank you