the techniques and practices of their larger competitors; or, (2) retain- 

 ing their present size of husiness, techniques, and practices and increas- 

 ing volume per mile of truck travel. Except for small firms picking up 

 poultry at a low rate per mile of truck travel, a given percentage in- 

 crease in volume would usually provide greater dollar savings than the 

 same percentage increase in volume per mile of truck travel. Firms with 

 annual volume of 2 million pounds or less and picking up poultry at a 

 rate of less than 200 pounds per mile of truck travel can make the great- 

 est short-run savings hy increasing volume per mile of truck travel. How- 

 ever, once present firms attain a level of 200 pounds per mile of truck 

 travel, their greatest gains may lie in expanding firm size. 



Costs per pound for live poultry assembly will not continue to de- 

 cline indefinitely as annual volume increases. With volume per mile of 

 truck travel at 200 or below, miles per truck increase rapidly with in- 

 creases in annual volume. Despite other potential savings, such as those 

 from using larger trucks and crews, the increased time and distance is 

 sufficient to cause an eventual upturn in costs. Hence, least cost points 

 will be attained at smaller and smaller annual volumes as pounds per 

 mile of truck travel declines from 200. However, in this study, continued 

 cost reductions were indicated for levels of 500 pounds per mile of truck 

 travel and up throughout the range of volumes studied (Table 5). 



Least-Cost Combinations of Resources in Live Poultry Assembly 



At most volume levels, several alternative combinations of resources 

 and inputs will achieve the minimization of total per pound costs — 

 within a fraction of a cent range. For most levels of volume per mile of 

 truck travel, least-cost points for successively larger firms involve greater 

 numbers of trucks of larger size operated at or near 100 percent of ca- 

 pacity. Table 6 illustrates some of the alternative combinations of re- 

 sources indicated in this study for selected annual volumes and mileages 

 per truck. Since subsequent discussions will involve minimum-cost com- 

 binations of assembly and processing, the annual volume levels selected 

 are about equivalent to those for model processing plants developed in 

 a previous report. 



For example, if a firm assembles 25 million pounds of poultry by 

 using at capacity five 21/2 ton trucks traveling 25,000 miles each, about 

 55,000 man hours of labor would be required, and total costs per pound 

 would approximate 0.475 cents. At 35 million pounds, capacity use of 

 seven 2^ ton trucks or six 3 ton trucks, traveling 25,000 miles each, 

 would require about 71,000 man hours of labor and cost 0.440 cents 

 per pound of live poultry assembled. 



In actual practice, some individual assembly firms own and operate 

 trucks of various capacities. Such combinations may be indicated at 

 some volume levels to enable the firm to develop least-cost combinations 

 under the standardized conditions involved in this analysis. Further- 

 more, in applying this study to a specific situation, truck size may be 

 further modified because of variations in average flock size from the 

 levels assumed herein. 



For example, if the volume of a firm lies between 25 and 35 million 

 pounds annually, it might achieve its least-cost combination with five 



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