The management function in the assembly firm involves primarily 

 the development of schedules for crews and trucks within a system es- 

 tablished by the entrepreneur. The manager also makes the decisions 

 on the repair, maintenance, and purchase of trucks and crates, hires and 

 fires labor, and maintains accounting systems. It is assumed that man- 

 agers are hired from the manager market on a yearly wage basis but 

 that only a partial amount of this wage is assigned to the assembly func- 

 tion. A standard salary of $6,000 is paid all managers. The partial alloca- 

 tions of managers' wages to the assembly firms are: Firm A - Yio, Firm 

 B - 1/4, Firm C - S/g, Firm D - 1/2, Firm E - %, and Firm F - 1. The 

 remainder of the managers' time and wages is considered to be carried 

 by the processing firms. 



In addition to managers' salaries the management function includes 

 office rent and office help. These are $959 for Firm A, $2,022 for Firm B, 

 $3,215 for Firm C, $4,313 for Firm D, $5,598 for Firm E, and $6,909 for 

 Firm F. 



Cost of Weight Loss 



Weight loss of birds during assembly is a function of time in crates. 

 The cost of this weight loss can be quantified for an assembly firm buy- 

 ing birds from growers and selling them to processors on a weight basis. 

 For example, if the assembler buys broilers for 16 cents per povind and 

 sustains a three percent weight loss, this represents a loss of one-half 

 cent per pound. In an integrated operation the cost of this weight 

 loss will show up only when the eviscerated bird is sold. 



However, it is necessary to develop some measure of economic cost 

 of weight loss in live hauling and relate this cost to the assembly enter- 

 prise. This cost is required so that the economic differences between 

 levels of production density for a given size of assembly firm, or between 

 sizes of assembly firms for a given level of production density can be 

 determined. 



Pricing live broilers is difficult because few markets exist for live 

 birds, especially in the highly commercialized areas of New England. 

 The prices reported monthly by the University of Connecticut are con- 

 sidered to be representative of New England. The average price for the 

 12 month period ending with May, 1963 was 16 cents per pound, and 

 this price is used in establishing the cost of weight loss in transit.^ 



Crate Costs 



Crates are an essential input of the assembly function. The number 

 of crates owned by each firm is equivalent to its truck crate capacity plus 

 additional crates equivalent to 20 percent of the firm's daily volume. 

 Firm C, for example, has a daily volume of 100,800 pounds or 28,800 

 birds, which is equivalent to 1,920 crates of birds. If this firm owns 

 eleven 190-crate trvicks (each taking one trip a day) its truck crate 

 capacity is 2,090 crates; if it owns six 190-crate trucks (all but one mak- 

 ing two trips a day) its truck crate capacity is 1,140 crates. In either 



1 Poultry Marketing, Extension Service, College of Agriculture, University of Con- 

 necticut, Monthly, July, 1962 to June, 1963. 



26 



