Case
Teaching Notes
Supplementary Resources
Abstract
This case describes a situation at an organic farm. The crops have been planted, but weather has affected the expected yields. A decision must be made about the profit-maximizing sales channels to choose given the unexpectedly limited output. The people, places, and quantitative data reflect actual observations, but some detail has been omitted or simplified for pedagogical purposes. The case was developed to integrate two academic disciplines: management accounting and quantitative methods. Once the technical aspects of the case analysis have been covered, class sessions have produced rich managerial discussions. The primary teaching objectives for this case are to explore distribution channel profitability from a differential analysis perspective and to introduce the concept of integer programming. Although the analyses can be complicated, the setting is a simple one that all students can readily visualize.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1: Average Weekly Restaurant Delivery Composition (Total for 10 Customers)
Cases | |
Tomatoes (large) | 21.75 |
Tomatoes (small) | 35 |
Watermelon | 4 |
Okra | 1.5 |
Basil | 2 |
Cucumbers | 9 |
Sweet potatoes | 3.33 |
Winter squash | 2.25 |
Exhibit 2: Average Make-up of a Single CSA “Box”
Approximate Percentage of a Standard Harvest Case | CSA Caselot Price ($) | Extended CSA Price ($) | |
Tomatoes (large) | 12.50% | 36.00 | 4.50 |
Tomatoes (small) | 8.25% | 36.00 | 2.97 |
Watermelon | 10.00% | 20.00 | 2.00 |
Okra | 5.00% | 36.00 | 1.80 |
Basil | 5.00% | 24.00 | 1.20 |
Cucumbers | 16.67% | 24.00 | 4.00 |
Sweet potatoes | 10.00% | 36.00 | 3.60 |
Winter squash | 18.75% | 36.00 | 6.75 |
Total CSA-rate value of box contents | 26.82 |
Exhibit 3: Various Production Data
Cost of Seed or Seedlings per Acre ($) | Fertilizer Cost per Acre ($) | Acres Planted | Standard Caselot Yield per Acre | Labor Hours per Acre (Plant, Care & Harvest) | |
Tomatoes (large) | 7,000.00 | 36.00 | 1.50 | 310 | 225 |
Tomatoes (small) | 7,000.00 | 36.00 | 1.25 | 540 | 200 |
Watermelon | 40.00 | 50.00 | 2.00 | 100 | 15 |
Okra | 8.00 | - | 0.08 | 1050 | 1000 |
Basil | 7,500.00 | 20.00 | 0.10 | 720 | 360 |
Cucumbers | 12.00 | 50.00 | 1.00 | 335 | 65 |
Sweet potatoes | 1,248.00 | - | 0.08 | 1333 | 1350 |
Winter squash | 12.00 | 50.00 | 2.50 | 53.3 | 27 |
Exhibit 4: Retail Prices per Caselot
Restaurants ($) | CSA ($) | Farm Market | |
Tomatoes (large) | 40.00 | 36.00 | 45.00 |
Tomatoes (small) | 26.00 | 36.00 | 40.00 |
Watermelon | 20.00 | 20.00 | 22.50 |
Okra | 24.00 | 36.00 | 40.00 |
Basil | 18.00 | 24.00 | 25.00 |
Cucumbers | 24.00 | 24.00 | 28.00 |
Sweet potatoes | 36.00 | 36.00 | 40.00 |
Winter squash | 36.00 | 36.00 | 40.00 |
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved