Question

Describe three key inputs (or factors of production) and fixed and variable costs involved in the production of your chosen product or service. Analyze the factors that impact your choice of inputs to produce the chosen product or service. Examine the production decisions that you would make based on the analysis of the factors impacting the choice of inputs to produce the chosen product or service.

Answer 1

The product is Organic and Inorganic Ice cream.

It will be sold from a high street location.

The focus is on the wholesale market.

The equipment consists of the following:

1. One unit of pasteuriser linked
2. One unit of homogeniser
3. One unit of cooler
4. One unit of ageing vat
5. One large batch freezer
6. One unit each of fruit–feeder and a ripple-pump
7. One Blast Freezer and
8. One Cold Store

Another factor is labour. For a small-sized operation like ours, we don't need more than 3 staff:

1. Production and Quality Control executive
2. Accounting and Marketing executive and
3. front desk officer

The size of labour is small because the company is small and is focused on wholesalers, not retailers. It also makes for good business sense to keep to a very lean Human Resource structure. Effectiveness and efficiency will be optimised with the use of technology.

Our choice to go wholesale stems from the fact that there is a huge gap for unbranded icecream. Because it is cheaper, people don't mind forgoing the big brands for an equally good cup or bucket of ice cream.

Cheers