PRESENTATION BYRIDAB

VISHALALEX

INTRODUCTION

Preliminary Analysis

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

debeaked ODI savings mortality .216 .108 .108 feed 7.04 6.837 .203 labor .034 .033 .001 egg laying .099 --- .099

.411

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 .216 .108 .108 feed 7.04 6.837 .203 labor .034 .033 .001 egg laying .099 --- .099

.411

cost of lens -.08

total savings per bird .331

Calculation for the feed

debeaked

it is $7.04 (exhibit 5)

ODI calculations

24.46 - 23.68 (on page 6, 2nd paragraph)

.78 / 100 = .0078 per chicken per day

.0078 * 365 = 2.847 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 1.28969 kg. Per hen

1.28969 * .158 = .203

therefore 7.04 - .203 = $6.837

debeaked ODI savings mortality .216 .108 .108 feed 7.04 6.837 .203 labor .034 .033 .001 egg laying .099 --- .099

.411

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 .216 .108 .108 feed 7.04 6.837 .203 labor .034 .033 .001 egg laying .099 --- .099

.411

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 .216 .108 .108 feed 7.04 6.837 .203 labor .034 .033 .001 egg laying .099 --- .099

.411

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) .00168 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 costsa) 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

20000-49000 320 9,517,453

50000-99000 114 7,459,994

100000&above 87 22,952,283

521 39,929,730

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

Fixed costsa) 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 * 35000 (pg 6, last para) = 70000

Fixed costsa) 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 .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 $.24

if we use

price for pair of lenses $.24 $.08

variable 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 quantity

fixed costs = (price per pair - v.c. per pair) * break even quantity

955,000 = (.24 - .03448) * Q

955,000 = .20552Q

Q = 955,000 / .20552

Q = 4646750

No!

Thank you