Substantial reductions in firm numbers from 1957 levels are likely. 

 Even with no change in density of production, systemic costs would be 

 reduced materially due to increased volume per firm. But the reduc- 

 tion in firm numbers may also be accompanied by increased volume per 

 mile of truck travel for mo«t firms, and hence, further cost reductions. 

 Savings in the system, as for individual firms, would be augmented by 

 efforts to increase the volume per mile of truck travel beyond the level 

 resulting from reduced numbers of firms. 



Tf the firms engaged in poultry assembly in 1957 took steps to double 

 the pounds of poultry per mile of truck travel, systemic costs could be 

 reduced from $4.64 million to S3. 93 million, or a saving of more than 

 $700,000 annually (Models I and IT. Table 10). These results could be 

 achieved by more attention to flock selection and by movement toward 

 exclusive supply areas. 



Table 10. Number of Firms Required and Aggregate Costs of Alternative 

 Model Systems of Assembling New England Chicken Output 



^ Under each type, firms of different sizes occur. 



2 From Table 1. 



3 Average per pound costs from Table 4 except unit costs for live-poultry stores 

 and small slaughterers are adjusted to 3.00 and 4.50 cents per pound, respectively, on 

 the assumption vehicles are used for purposes in addition to live poultry assembly. 

 Pounds per mile of truck travel from Table 3. 



4 Same number and volume, by types of firms, and rate of use of truck canacitv. 

 as for Model I. Pounds per mile of truck travel doubled from rates in Model I. Unit 

 costs in Model I adjusted by using percentage changes from data for Table 5. 



5 Use of a more limited number of vehicles at 100 percent of capacity, a reduction 

 in firm numbers based on the preceding plus known mortality. Unit costs derived 

 from data for Table 5. Pounds per mile fractionally higher than in Model XL 



Further developments to create exclusive supplv areas plus a suffici- 

 ent reduction in firm numbers to enable operation at 100 percent of 

 capacity would further increase savings. The reduction in firm numbers 

 would approximate 60 percent, and the additional cost savings a million 

 dollars annually (Model III. Table 10). 



Combining the Assembly and Processing Functions 



By combining the assembly and processing functions under one man- 

 agement, savings can be achieved in unit costs. These arise from the 



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