Case Study 2: Gringott's The Gringott's Mine extracts gold in central London. Each tonne mined is 40% Grade F (fine) gold, 40% Grade VG (very good) gold, and 20% gold alloy (not so great, but still shiny and good for making things a gold colour). Output usually sells within two months. In January, Gringott's mined 1,000 tonnes of gold. It spent f10,000 on the mining process. Grade F gold sells for f1000 per tonne. Grade VG gold sells for $60 per tonne. Gringott's gets one-quarter of a vat of gold alloy from each tonne of gold processed. The gold alloy sells for f60 per vat. Bogrod, the head goblin at Gringott's bank has been approached by one of his workers, Gornok, with a proposal to further process Grade VG gold into Galleons on- site. Gornok insists this is a good idea since idle goblin-hours (labour-hours) are available. The process would cost f6000 with no loss in volume. One tonne of Grade VG gold makes 108,000 Galleons. Currently, Gringott's sells gold to the Muggle Mint for processing into Galleons (currency; think about a mine selling money to a bank; they are outsourcing processing of gold into coins). The Muggle Mint sells Galleons back to Gringott's for a price of f5.50 per100 Galleons (ie. Gringott's is buying back the finished product from the Mint. With Gornok's suggestion they would be able to by-pass this and complete the entire process on their own)