Optical Distortions, Inc. Case Study

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A contact lens for chickens invented by Optical Distortion, Inc, is most likely a remarkable tool for farmers to manage their chickens easily. A chicken wearing the ODI lenses has its vision minimized enough to acquire the etiquettes the farmers anticipated. These great habits would significantly reduce cannibalism, which is the primary factor for high death amongst chickens. Assuming that a farmer with 20,000 chickens(The target audience of ODI lenses is farms which have at least 10,000 birds), he would save 0.21/ 2 * 20,000=$2100 per year(Exhibit5)by decreasing allotment for replacing dead birds(the chicken mortality due to cannibalism can be decreased from 9% for debeaked chickens to 4.

5% for using ODI lenses chickens).

Furthermore, reducing chickens’ vision can likewise lead less injury and greater egg production performance. Another discovery ODI made has actually promoted the worth of lenses as well. ODI lenses had the capacity of minimizing a farmer’s feed expense. If the depth of feed in troughs goes down from 2″ to 1″, 100 birds would reduce 0.

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78 pounds(i.e. 24.46 pounds– 23.68 pounds)chicken feed per day. Assuming 20,000 birds remaining the very same, the anticipated value of decreasing feed cost would assist the farmer conserve 20,000/ 100 * 0.78=156 pounds per day.

Since $158 per ton=158/2205=$0.072 per pound for chicken feed, this would represent considerable saving of 156*0.072*365=$4080 per year. In order to figure out the expected value of the lenses to farmers, we should also calculate the cost of using ODI lenses assuming 20,000 birds. ODI decided to price the lenses on minimum of $0.08 per pair or $20 per box of 250 pairs. Also, farmers would pay 0.

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14+0.18=$0.32 per box for packing, order processing and shipping cost.

Because a farmer with 20,000 chickens need 20,000/250=80 boxes, the total cost for purchasing ODI lenses is (0.32+20)*80=$1626.(Suppose ODI lenses could be reused for a whole year, and it is unnecessary to figure out insertion cost due to approximately the same labor costs between debeaking and insertion.) It is not difficult to find the change of “cash flow” after accessing to ODI lenses. “cash inflow” is 2100+4080=$6180 per year. “cash outflow” is $1626 per year.

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Optical Distortions, Inc. Case Study. (2016, May 08). Retrieved from https://studymoose.com/optical-distortions-inc-case-study-essay

Optical Distortions, Inc. Case Study

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