elimination of a duplicate set of personnel engaged in managerial, buy- 

 ing, and office duties and from the economies obtained by including gar- 

 age and bolding space in the greater square footage of a processing plant 

 rather than in distinct facilities for an assembly firm. The magnitude of 

 unit savings decrease as firm size increases (Table 11). In the 1957 

 system, it was estimated that 70 percent of the 469.6 million pounds 

 handled bv assembly firms was already included under combined-func- 

 tion firms. 



Table 11. Annual Savings Obtainable from Combining the Poultry 

 Assembly and Processing Functions under One Management 



^ If system composed of firms of successive uniform sizes. See Table 12. 



2 Live weight basis. 



'•''N. H. Sta. Bui. 459, op. cit. At 100 percent of rapacity, 150 broilers or 120 fowl 

 per hour vs. 10,000 broilers or 6,000 fowl per hour. Broilers weighing 3.5 pounds 

 each and fowl 6.0 pounds each. 



Figure 7 shows the combined cost curves (assembly plus processing) 

 for selected levels of volume per mile of truck travel. At levels of 1,000 

 pounds per mile of truck travel and over, unit cost savings for any par- 

 ticular plant size become exceedingly small as volume per mile of truck 

 travel increases. But the dollar savings, at any level of volume per mile 

 of truck travel, may be substantial as plant size increases. 



For example, suppose poultry is available at the rate of .500 pounds 

 per mile of truck travel. One large firm could assemble and process 69 

 million pounds of poultry for 2.898 cents per pound, or Si. 999. 620. Costs 

 for the same voluiue handled by two firms, each with half the capacitv 

 of the larger firm, would erfual .3.162 cents per pound, or $2,181,780 

 (Table 12). Of the total saving** of $182,160 economies in processing 

 would account for $165,220 and economies in asseniblv for the balance 

 of .SI 6,940. 



Combination of the assembly and processing functions further in- 

 creases the advantage of large plants as compared to small plants. For 

 the processing function alone, the cost savings from the smallest model 

 plant to the largest model plant ^ '' is estimated at 1.75 cents per pound 

 live weight basis. For the combined functions, comparisons of the small- 



34 



