FreeRange Poultry Inc. Lufkin, Texas

Consulting Report

Steve Illyes, UTA Fall 2013

Dear Mr. Samuel Garcia

Following is the Executive Summary of our Consulting Report for your reading pleasure:

1. Background Information:
FreeRange Poultry Inc. in Lufkin, Texas specializes in the processing and sale of chicken parts, chicken by-products to large restaurant chains and food companies. Some of its products are also exported overseas. 2. Consulting Tasks:
FreeRange Poultry Inc. has retained our consulting services to analyze its production operations and to recommend a monthly production plan that maximizes profits. 3. Approach:
We used Lingo 14.0 for the modeling software. It offers great advantages over Excel Solver, such as debugging and syntax correction functions and ease of data entry.
After analyzing the process flow, we decided to set-up our model in 3 sections: Section 1: Demand Section 2: Supply Section 3: Process
Some of the supplies had to be broken down into products and by-products to accurately model the relationship between products purchased and products sold. This represented a unique challenge, since there is the option to purchase some products vs. using by-products from the process.
In the subsequent tables we will show the cost, price and profit of the various products produced vs. demand.

Results:

The ideal production plan vs. demand is shown in figure 2. The total profit contributions of this plan are $301,842.81. Figure 1 shows the profit contributions by product. The products F810 and CB16 are not produced.
Figure 4 shows the cost vs. profit for each product. CB6 is the best seller and also has the largest profit contribution of $139,003.76. Only 712,839.80lb’s of a total demand of 1,000,000lb’s is fulfilled. If FreeRange Poultry could us some more of its CB by-product to produce CB6, an additional $56,000 in profit could be earned. That analysis and the resulting graphs are included in the appendix called “What-If Scenario” for CB6.