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AGEC $4830$

Homework Assignment #$2$ Comparing Some Marketing Alternatives $15$ points $($Please type your answers and upload via Wyocourses$).($Be sure your name is listed clearly on the answers you turn in$).$

Kaleb T$.$ Cattleman has been considering whether there is any advantage to selling his feeder steers in the video auction over selling at the auction in Longhaul, Wyoming, $200$ miles away. This year he sold his cattle at the Longhaul auction barn. Kaleb has a neighbor who used a video auction. He has asked his neighbor to provide specifics so he can compare net prices after marketing between the auction and the video auction alternatives.

Longhaul Auction

Kaleb sold his steer calves in October. They averaged $550$ pounds before he shipped them to the auction. He got $$\frac{312\mathrm{.}69}{c}wt$ for them. Longhaul charges $$16\mathrm{.}00/$head for calves under $999$ pounds for commission or market charges. Other costs include $-$ Brand Inspection $=$$$\frac{1\mathrm{.}50}{?}$ head ; Health $=$$$\frac{0\mathrm{.}30}{?}$ head; Predator Board$=$ $$\frac{1\mathrm{.}00}{?}$ head; Beef Check off $=$$$\frac{1\mathrm{.}00}{?}$ head Insurance $=$$$\frac{0\mathrm{.}76}{?}$ head; Yardage $=$$$3\mathrm{.}50$; Feed $=$$$3\mathrm{.}56.$ Kaleb hired the $"$We$-$GetemThere" livestock trucking company which charged $$4\mathrm{.}50$ per loaded mile. They were able to get about $85$ head on each truck. Total time spent weighing, handling and on the truck to auction was $8$ hours $($estimated physical shrink was $5\mathrm{.}5\%).$ The cattle received feed and water at the auction before being sold and gained back excretory shrink incurred on the trip or about $2\%$ of what they lost in terms of physical shrink $($for the worksheet use the net shrink, i$.$e$.,$ physical minus what the cattle gained back$).$

Video Auction $-$ Alternative $1$

Widow Lonesome sold her steer calves on the Wild West video auction for $$\frac{314\mathrm{.}50}{?}$ cwt in March for October delivery. The calves were contracted for an expected average weight of $525$ pounds with a slide of $$\frac{0\mathrm{.}15}{c}wt$ for every pound over an average weight of $540.$ The cattle were weighted on certified scales and sold free on board $($FOB$)$ at the ranch. When trucks came to pick up the cattle they averaged $542$ pounds. The cattle were sold with a $3\%$ pencil shrink. Other costs for this alternative included: Filming fee $=$$$\frac{4}{?}$ head; Commission at delivery $=$$$\frac{13}{?}$ head; Brand Inspection $=$$$\frac{1\mathrm{.}50}{?}$ head; Health $=$$$\frac{0\mathrm{.}30}{?}$ head; Predator Board $=$$$\frac{1\mathrm{.}00}{?}$ head; Beef Check off $=$$$\frac{1\mathrm{.}00}{?}$ head. $($Note: to see if price is reduced by the slide, you must first calculate what the payweight of the animals are after the pencil shrink. If the shrunk weight is below $540$ lbs $.,$ price slide is not invoked. If the shrunk weight is above $540$ the slide is invoked as presented above$).$

$12$ pts$.1.$ First, use the attached marketing worksheets to work through the revenue and marketing costs for each of the marketing methods. The end calculation of the worksheet gives you a net price per hundredweight $($ cwt $)$ after marketing.

$\backslash$table$[[$Marketing Worksheet $-$ Livestock $-$ Method: Longhaul Auction,,$],[$Gross Revenue per head,Amount or Number,Per head basis$],[1.$ Price $($S$/$CWT$),,],[2.$ Average weight$(($CWT$)=($average weight in lbs $/100),,],[3.$ Gross Revenue per head $=($line $1$ X line $2),,$Enter Item $3$ in this box$],[,,],[$Marketing Costs,,$],[4.$ Transportation Costs,,$],[$a$.($Rate per loaded mile$),,],[$b$.(($ of miles hauled$),,],[$c$.($total transportation costs$)=($item $4.$a$.$ X item $4.$b$.,,],[$d$.($# of head per truck$),,],[\backslash$table$[[$e$.$ calculated transportation cost per hd$.=($item $4$c$/$ item$],[4$d$)]],,]]$