PRESENTATION BY RIDAB VISHAL ALEX

INTRODUCTION

Preliminary Analysis

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

debeaked ODI savings " mortality " feed " labor " egg laying cost of lens -.08 total savings per bird.331

Calculation of mortality debeaked = 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 savings " mortality " feed " labor " egg laying cost of lens -.08 total savings per bird.331

Calculation for the feed debeaked it is $7.04 (exhibit 5) ODI calculations (on page 6, 2nd paragraph).78 / 100 =.0078 per chicken per day.0078 * 365 = lbs. for the whole year benefit to the farmer $158 per ton, (pg.. 6, 2nd para.) will be $0.158 per kg. 1 lbs.. =.453 kg. Benefit will be kg. Per hen *.158 =.203 therefore = $6.837

debeaked ODI savings " mortality " feed " labor " egg laying cost of lens -.08 total 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 savings " mortality " feed " labor " egg laying cost of lens -.08 total savings per bird.331

Calculation for egg laying (trauma) debeaking (pg. 5, 1st para) loss one egg per 5 month total loss is 2.4 eggs per year per hen total cost per dozen = $0.50 ( exhibit 5) total loss = 50 * 2.4 / 12 = $0.099 per hen ODI no loss (pg. 5, last line)

debeaked ODI savings " mortality " feed " labor " egg laying cost of lens (pg.7, first line) -.08 total savings per bird.331

Determine the variable costs per pair of lens

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

Determine the fixed costs

Fixed costs a) payment to new world (pg.2, para 5) $25,000 b) office and warehouse (pg.7, table b) 196,000 c) head quarters expense (pg.7, para 2) 184,000 (assuming 20 million pair) d) salesmen 280,000 e) technical representatives 70,000 f) advertising and promotional (pg. 7, 2nd para) 100,000 g) trade shows (pg. 7, 2nd para) 100,000 total 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. chickens ,517, ,459, &above 87 22,952, ,929,730 per 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 * (pg.6,last paragraph) = 280,000

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

Calculation for technical representatives one technical representative is enough for five salesmen (pg. 6, last para) therefore two are required for seven salesmen 2 * (pg 6, last para) = 70000

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

Determine the appropriate price range

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

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

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

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 quantity fixed costs = (price per pair - v.c. per pair) * break even quantity 955,000 = ( ) * Q 955,000 =.20552Q Q = 955,000 / Q =

No!

Thank you