Optical distortions, Inc. case
Optical Distortion, Inc. case
Daniel Garrison, the president and CEO of Optical Distortion, is thinking about to bring the new and only product, a contact lens for chickens, to the markets. Working with Ronald Olson, the marketing vice president, Garrison is currently developing a marketing plan for ODI’s new product. ODI is planning to introduce these contact lenses to at least one region at the beginning, hoping to reach national distribution in a couple of years. There are three different sizes of the chicken farms that the company faces when they finally introduce the lens, namely small farms (10,000 or fewer birds), medium farms (10,000-50,000 birds), and large farms (over 50,000 birds).
Compared to the debeaking operation, ODI contact lenses for chicken brings the benefits to farmers more than the costs it made. There are several savings for the farmers while using the ODI lenses as the following. In the first place, the mortality rate because of cannibalism drops from 9% to 4.5%, which means ODI lenses are able to help save $0.108 for each hen and save $0.00945 for replacing the dead hens. The additional potential considerable saving is from the feeding cost. It is mentioned that the farmer have to pay $7.04 annually for each hen, while this cost would go down to $6.837 every year resulting $0.204 savings for one inch feeding, thus the farmer can save 0.07655 for 3/8 inch feeding. Furthermore, reducing the trauma by putting the contact instead of debeaking, the extra egg laying will bring the farmers some small benefits about $0.1. Obviously, while farmers choose to use ODI lenses, they have to pay $0.08 for each pair. Thus, the expected value of the lenses to farmers would be $0.2140 (see the calculation details in table1).
Table1
Continued table1
Depending on the different sizes of the farms, the total actual expected value for them would be different
Table2
While we estimate the expected value of lenses for the farms, we use the
Daniel Garrison, the president and CEO of Optical Distortion, is thinking about to bring the new and only product, a contact lens for chickens, to the markets. Working with Ronald Olson, the marketing vice president, Garrison is currently developing a marketing plan for ODI’s new product. ODI is planning to introduce these contact lenses to at least one region at the beginning, hoping to reach national distribution in a couple of years. There are three different sizes of the chicken farms that the company faces when they finally introduce the lens, namely small farms (10,000 or fewer birds), medium farms (10,000-50,000 birds), and large farms (over 50,000 birds).
Compared to the debeaking operation, ODI contact lenses for chicken brings the benefits to farmers more than the costs it made. There are several savings for the farmers while using the ODI lenses as the following. In the first place, the mortality rate because of cannibalism drops from 9% to 4.5%, which means ODI lenses are able to help save $0.108 for each hen and save $0.00945 for replacing the dead hens. The additional potential considerable saving is from the feeding cost. It is mentioned that the farmer have to pay $7.04 annually for each hen, while this cost would go down to $6.837 every year resulting $0.204 savings for one inch feeding, thus the farmer can save 0.07655 for 3/8 inch feeding. Furthermore, reducing the trauma by putting the contact instead of debeaking, the extra egg laying will bring the farmers some small benefits about $0.1. Obviously, while farmers choose to use ODI lenses, they have to pay $0.08 for each pair. Thus, the expected value of the lenses to farmers would be $0.2140 (see the calculation details in table1).
Table1
Continued table1
Depending on the different sizes of the farms, the total actual expected value for them would be different
Table2
While we estimate the expected value of lenses for the farms, we use the