Sumiiiary 



This report presents a synthetic analysis of space relationships de- 

 signed to determine the net effects on assembly costs of change in 1) firm 

 size, 2) supply density, and 3) transport distance. All other possible 

 variables such as production and assembly technology, and Ijird type 

 were kept constant. 



Capacity of firms is specified in terms of 3.5 pound live birds hauled 

 per day. Numbers of men and trucks required by any firm vary in this 

 analysis to achieve the least cost combination for any assembly opera- 

 tion. Density is specified as the quantity of broilers produced in some 

 two dimensional portion as the supply area (square mile) over some 

 period of time (year). Three density levels: 1,000, 5,000, and 25,000 

 pounds of live broilers per square mile per year are considered in this 

 study. 



The synthetic model assumes a flat plane surrounding a center in a 

 circular pattern with poultry located evenly over it. The model consists 

 of a set of six such planes for each density level, one plane for each size 

 of firm. In the analysis of the model the six planes are superimposed 

 concentrically resulting in a single surface made up of six bands. Each 

 band is the supply area added when moving from a smaller to a larger 

 alternative firm size. Within each liand poultry for any one day's pickup 

 is assumed to l)c concentrated at an impound point so there is no travel 

 l^etween farms by pickup crew. 



The sizes and numbers of crew-truck complements to achieve min- 

 imum labor imput for each plant size ( at each density level ) are deter- 

 mined from assembly matrices. These matrices handle all possible com- 

 liinations of crew sizes ( from three to ten men ) and truck numbers. 

 The diagonal of each lists various complements to be considered in as- 

 sembling poultry in each supply band when the appropriate supply 

 bands are handled separately ])y each firm. The upper right-hand half of 

 each matrix lists the complements when considering combining assembly 

 in two or more supply bands by any firm. The lower left-hand portion 

 of each matrix is not applicable. 



Costs of assembly were developed by applying appropriate cost 

 rates to the physical input quantities determined from the matrix. Costs 

 were developed for labor, management, truck ownership and operation, 

 shrinkage, and crates at the three density levels for the six firms. Assem- 

 l)ly costs per pound increase at eacli density level as size of firm increas- 

 es: costs decrease at each firm size as density increases; and costs in- 

 crease at each density level as hauling distance increases. 



As assembly firm size increases from 4.15 million pounds per year 

 to 69.16 million pounds assembly costs increase from 0.64 cents per 

 pound of live birds to 0.92 cents at the 5,000 pound density level. For 

 less dense production situations costs rise much more rapidly as size of 

 firm increases, for more dense situations costs rise at a slower rate. 



Production density has a marked effect on assembly costs. For Firm 

 D (34.58 million pounds per year) costs fall from 1.26 cents per pound 

 of live broiler at the 1,000 pound density level to 0.56 cents at the 25,000 



