Sunburst Veggies is a vertically-integrated company which both grows' and processes organic vegetables. Their company-grown vegetables are canned and then sold wholesale to grocery stores. The company began their operations in San Marcos, Texas in the mid-1990s and the corporate headquarters remain there. Sunburst grows a wide variety of organic (non-GMO) vegetables in greenhouses, some of which cover more than 200 acres. The vegetables are shipped to manufacturing facilities near the greenhouses. This assures the vegetables are processed as quickly as possible after being picked which inspired the company's marketing tag line: "fresh from the field." Consumer demand for organically-grown vegetables has increased tremendously since Sunburst began operations. Gross revenues increased 500% since they opened 10 years ago. The firm now has five greenhouses and processing plants in multiple locations near the following cities: Sacramento, California; San Marcos, Texas; Baton Rouge, Louisiana; Montgomery, Alabama; and Jacksonville, Florida. Their work force totals nearly 600 employees. Potential Sites: Sunburst is at maximum capacity in all locations and must add another greenhouse and processing plant in order to continue their sales growth to new customers (and to assure they have no out- of-stock issues for existing customers). Both the greenhouse operations for growing the vegetables and the canning facility require large volumes of fresh water. It is essential to locate near an interstate highway because all shipments are shipped via semi-trucks. Two sites are being considered near the towns of Gulfport, Mississippi and Little Rock, Arkansas. Because of the extensive damage caused in Gulfport by Hurricane Katrina in August 2005, the cost of real estate in that area is significantly lower than in Little Rock. Estimated Operating Costs: Estimates of operating costs for the two locations are as follows: Life of greenhouse & processing plant Expected annual sales (# cases) Selling price (average per case) Variable costs (average per case) Fixed Costs (annual): Gulfport 50 years Little Rock 50 years 300,000 $90 300,000 $90 $60.00 $60.00 Salaries & fringe benefits (labor is higher in L.R.) $1,300,000 Depreciation* Other fixed costs Total Fixed Costs $1,500,000 $445,000 $475,000 $655,000 $655,000 $2,400,000 $2,630,000