The students' approach: Part 1
The team started by analyzing the cost structure of a typical small-scale dairy production. Next, they used a simple break-even analysis to determine how long it would take a farm to pay off the additional fixed costs it would face if it started producing on-farm bottled milk. To allow for the projection of variable costs, the team used the herd size as the primary indicator of future costs and revenues.
We did our best to make sure that the model reflected all possible cost and profit inputs and variables so that anyone who uses this model in the future will be able to make an informed decision about their business.” — Kaitlyn Pennington, 2017 Jenkins MBA alumna
Outcomes: Part 1
The team successfully created a financial tool that could assist dairy farmers in assessing the viability of transitioning to on-farm production of non-homogenized milk. In addition, the team created an instructional video and written instructions to assist farmers in operating the tool.
The tool the team produced is still available for farmers to use to better plan for their future.
The students' approach: Part 2
The team started by using data provided by the farm owners to determine the cost of purchasing and sustaining a cow over the course of one year. With the understanding that the family was open to increasing their herd size (which would be necessary to make the proposed transition), the team was then able to project their potential production and variable costs.
Kaitlyn Pennington (foreground left) and Jazmine Davis (background; second from left) presenting their team’s project poster at the SCRC’s Gallery Walk showcase event in 2015.
The MBA student team at the SCRC’s Gallery Walk event in 2015, where their project won first place. (L-R: James Hollifield, Graham Givens, Betty Minton [faculty advisor], Kaitlyn Pennington, and Jazmine Davis)