2. (12 points) On pages 3 and 4 of the 10-K for the fiscal year ended June 30, 2019, Farmer

Brothers detailed their efforts to Reduce Costs and Compete More Effectively. (note:

DSD refers to direct store delivery.) Farmer Brothers is a price taker and a relatively

small player in a big market. If they fail to control costs, they will fail as an organization.

For a company like Farmer Brothers, you can accurately say that, for the most part, they

dont manage costs; instead, they manage processes, and costs are outcomes.

2.1 (6 points) Based on the disclosures provided in the section Reduce Costs and

Compete More Effectively, provide three examples of initiatives undertaken by

management intended to utilize fixed costs more effectively.

New Facility, DSD Restructuring Plan, Telematics

2.2 (6 points) Based on the disclosures provided in the section Reduce Costs and

Compete More Effectively, provide three examples of initiatives undertaken by

management intended to manage variable costs more efficiently.