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Now assume the market condition is getting worse in 2 0 2 3 . Still, he assessed that there is a 6 5 % chance
Now assume the market condition is getting worse in Still, he assessed that there is a chance that he can secure contract for specialty egg but if he cant he is forced to sell at open market and accept the loss Cox has to make a decision whether to revert his farm to a regular nonspecialty egg production. If he chooses to do so his cost structure significantly reduce table below but he incurs a onetime cost of $ For regular eggs, the current contract price is $ and seems stable at least for the next year. What would you recommend? Do a sensitivity analysis to show your recommendation is robust.
Approximate costs structure for OCF if hens are spent on week $ Per Bird
Acquisition from Hatchery $
Total preproduction cost weeks $
Fixed overhead cost facilities debt service, etc. $
Variable production costs feed transportation, labor, etc. $
Depopulation $
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