Reference no: EM132286462
Assignment - Project Case
For this project, you will develop an Excel Decision-Tool along with a two-page summary of your findings. You may have to do some research to better understand each subject area.
Case - Hog Feeding Problem
It is April 1, 2019 and you just purchased eight 50-pound feeder pigs from a local farm. Four of these are barrows and four are gilts. You would like to take the barrows up to approximately 300 pounds and the gilts up to approximately 265 pounds by butcher time. You paid $75 for each barrow and $65 for each gilt. You have feeding facilities in place for these critters, but you need to purchase some feed. You want to purchase all of the feed at once and would prefer to do this for least cost and you don't want to come up short or have much left over when the pigs finally go to town. You want to feed these pigs a 16% protein ration and you have two options. You could buy the pig feed from Orscheln's for $11.00 per 50-pound bag or you could go to your local feed mill and have them process and bag a custom feed ration. The feed mill gives you the following details:
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Custom Feeds Inc.
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Corn
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$5.25/cwt
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10% protein
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Milo
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$5.30/cwt
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12% protein
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Soybean Meal
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$19.75/cwt
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47.5% protein
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Mineral pack
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$19.00/cwt
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Need 50 lbs mineral per ton of feed
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Rolling feed
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$20.00/ton of feed
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Bagging (labor and bags)
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$1.50 per 50-lb bag
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Also, you are needing to determine when these hogs will be ready to be processed. You can assume that the barrows will gain 1.80 lbs/day and the gilts will gain 1.65 lbs/day, on average. You want to have them all processed the same day and you need to call your local processor ASAP to set up an appointment for all of the hogs, as they quickly fill up.
The average Feed: Gain ratio over the course of all of this is 3 to 1. This means it takes 3.0 pounds of feed to put on 1.0 pound of gain.
Create an Excel Spreadsheet that can help you answer the following questions (your answers can be part of your 2 page write-up):
- What should be the processing date?
- What weight should the barrows be at by then? Gilts?
- How many tons of feed will you need to purchase?
- What is the total cost of feed if you buy it all from Orscheln's?
- What is the composition of and the total cost of feed if you use rolled corn, SBM, mineral, and have it all bagged?
- What if you substituted milo for corn in the ration described above?
- You want to advertise these on NexTech and you want to do so now, so that everyone can plan ahead. Let's assume you went with the least-cost ration. How much would you need to charge per pound (on a live weight basis) to cover your feed costs? How much would you need to charge per pound (on a live weight basis) to cover your feed costs and make $400 profit in total?
- How can or should risk be considered in all of this?
Please note that we are ignoring all other costs other than feed costs. What are some of the other costs that one would probably want to consider in a business venture like this one?