The curves in Figure 8 show the relationship between firm size and 

 assembly cost per pound and indicate that assembly costs tend to in- 

 crease at a decreasing rate as size of firm increases. The 25,000 and 5,000 

 pound density cost curves rise slowly at first because at the lower vol- 

 umes costs can be kept down as size of firm increases. This is due to using 

 one crew in more than one band, so crew and foreman travel time is 

 reduced below what it would be if separate crews had to go to each band. 

 Such combining of bands also requires proportionately less foreman 

 time and reduces the overhead truck costs because fewer trucks are 

 needed. 



Figure 8. Broiler Assembly Cost for Firms of Various Sizes. 



1.20 - 



|..oo 



Q. 



i> 



a 

 V, .80 



c 

 u 



I 



I -60 

 u 



i -40 



«> 



<- 



.20 - 



10 20 30 40 50 60 70 



Firm size — pounds per year (1,000,000) 



The effect of production density on assembly costs for each of the 

 six firms is estimated in Figure 9 from the cost points developed in this 

 study at the three density levels. It is evident from these curves that in- 

 creasing density will have the greater absolute and percentage effects on 

 the cost of assembly of the large firms. In moving from a density of 

 5,000 pounds per square mile per year to 25,000 pounds, the cost of 

 assembly for Firm A falls 0.12 cents or 19 percent, while for Firm F it 

 falls 0.265 cents or 29 percent. 



Hauling distance, as expected, has a positive effect on assembly costs. 

 This is shown in Figure 10, in which the assembly cost per pound is 

 plotted against the distance from each impound point under each den- 

 sity situation. At each density level, the costs of assembly increase as 

 the distance to the impound points increases. Taking each density situa- 

 tion separately in Figure 10, it appears that the costs rise at increasing 



30 



