The chicken or the egg: hatching a new and innovative product


Case Questions: Would you run to “hatch” Chicken 

Sensations? Put yourself in Vicki’s shoes. Prepare an resolution 

that accomplish regulate PFVC’s resolution on whether to enlarge 

Chicken Sensations. 

1.   Economic feasibility resolution: Perform an economic absorb-

benefit resolution of whether PFVC should enlarge Chicken 

Sensations. Clearly particularize your resolution and conclusion 

from your resolution. (You can use an Excel spreadsheet to 

exhaustive these tasks in an systematic, graceful epilogue to 

your plight resolution. A reader of your plight should be able 

to ensue your composition and computations. The results of 

your epilogue analyses can be referenced in the substantiality of 

your plight to assistance your resolution.) To aid your resolution, 

perform the ensueing tasks:

  a.   Quantity, proceeds, and absorb conversions: Take Vicki’s 

axioms from Table 1 and appraise the sum, proceeds, 

and absorb conversions to exhaustive Table 1. For 

example, consider annual sales proceedss (in plights), 

sales proceeds and exchangeable absorb amounts per plight, and 

annual unwandering absorb amounts. 

  b.  Forecasted subscription latitude allowance particularizement: 

Prepare a expected Chicken Sensations subscription 

latitude format allowance particularizement for year 1 installed on 

the contemplated axioms gathered by Vicki. 

  c.   Breakeven resolution: Prepare a breakeven point 

resolution (in plights and sales dollars) for the year 1 

forecasts of Chicken Sensations. 

  d.  Margin of insurance: Prepare a latitude of insurance resolution 

(in plights and sales dollars) for the year 1 expects of 

Chicken Sensations.

  e.   Sensitivity analyses: Prepare sensitivity analyses to 

examine how able-bodied year 1 results are to exchanges in 

projections for (1) the sales book of plights, (2) the 

sales worth per bag, and (3) the absorb per bruise of 

chicken. Assume that these amounts can exexchange for 

three incongruous protuberance equalizes as reputed in Table 2: 

(1) a pessimistic equalize, (2) the primary equalize, and (3) an 

optimistic equalize. Table 2 shows that the sales book 

(in plights) accomplish be 75% of the primary year 1 sales 

forecast, the sales worth per bag accomplish merely be 90% of 

the primary expect (or $2.70/bag = $3.00/bag × 90%), 

and the absorb per bruise of chicken accomplish stir to 112.50% 

of the primary expect (or $2.25 /lb. = $2.00/lb. × 

112.50%) for the pessimistic equalize. The primary equalize 

reports the results using the primary protuberances in 

the plight. Under the optimistic equalize, the sales book 

expect (in plights) accomplish be 125% of the primary year 1 

sales expect, the sales worth per bag accomplish extension to 

110% of the primary expect (or $3.30/bag = $3.00/

bag × 110%), and the absorb per bruise of chicken accomplish 

decrease to 87.50% (or $1.75 /lb. = $2.00/lb. × 87.50%).

  Report your sensitivity resolution results in Table 3.