Arkansas Eggs
Stamp
ArkansasEggs.docxAlternative
Let 130,000 hens lay eggs and sell at $0.75. - Optimal
Euthanize all the hens at week 76 then sell them. - Optimal
Buy only convention hens to lay the eggs. - Sup optimal
Produce both specialty eggs and conventional eggs. - Optimal
Euthanize the hens right the way and sell them. then fire all the staff. - Sup optimal
Close the company down - Sup optimal
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Weeks |
Egg per week |
Dozen calculation |
Revenue calculation |
Variable cost per week |
Profit margin per week |
|
Week 24 |
3 eggs a week |
3 eggs*130,000 = 390,00/12 = 32,500 dozen |
32,500*$0.75 = $24,375 |
$1.70/76week*130,000=$2,908 |
$24,375-$2,908= $21,467 |
|
Week 25 |
4 eggs a week |
4eggs*130,000 =520,000/12= 43,333 dozen |
43,333*0.75 = $32,500 |
$1.70/76week*130,000=$2,908 |
$32,500-$2,908=$29,592 |
|
Week 26 |
5 eggs a week |
5eggs*130,000= 650,000/12= 54,167 dozen |
54,167*0.75 = $40,625 |
$1.70/76week*130,000=$2,908 |
$40,625-$2,908= $37,717 |
|
Week 27-28 (break-even) |
6 eggs a week |
6eggs*130,000=780,000/12= 65,000*2 = 130,000 dozen |
130,000*0.75 = $97,500 |
$1.70/76week*130,000=$2908*2=$5,816 |
$97,500-$5,816=$91,684 |
|
Week 29-39 |
7 eggs a week |
7eggs*130,000=910,000/12= 75,833*10=758,330 dozen |
758,330*0.75 = $567,747 |
$1.70/76week*130,000=$2908*10=$29,080
|
$567,747-$29,080=$538,667 |
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Week 40-64 |
6 eggs a week |
6eggs*130,000=780,000/12= 65,000*24= 1,560,000dozen |
1,560,000*0.75 = $1,170,000 |
$1.70/76week*130,000=$2908*24=$69,792 |
$1,170,000-$69,792=$1,101,208
|
|
Week 65-76 |
5 eggs a week |
5eggs*130,000= 650,000/12= 54,167*11= 595,837 dozen |
595,837*0.75 = $446,877 |
$1.70/76week*130,000=$2908*11=$31,988 |
$446,877-$31,988=$414,889 |
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Total profit margin |
|
2,765,224-123,500=$2,641,724 |
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The fixed cost per chicken is 0.95* 130,000 = $123,500
