Question

In this project, you will form a team of fictional consultants working for the equally fictional “The Macondo Fine Latin Dining company”. This company is located just outside Merced, California. The Macondo company works directly with corn growers and produces a variety of ready-to-eat corn-based dinners such as Tamales, Tacos, Pupusas, Arepas, Empanadas, and Sorrullitos in addition to corn flour to make these preparations at home. This company has an annual revenue of $500M and employs approximately 600 people. Their yearly operational costs amount to $300M of which 60% is salaries and distribution, 30% is equipment maintenance, and 10% is overhead and other costs. The problem you are called to address is what to do with the corn waste product. Each year, the Macondo company processes approximately 3,000 tons of corn, of which approximately 1,000 tons consist of waste in the form of cobs (60% of the waste), kernel husks (20% of the waste), and kernel germ (20% of the waste). Right now, all of these materials are discarded and sent to a landfill, at a cost of $500 per ton. This cost is expected to increase by at lest 50% in the next ten years due to strict environmental regulations. The company is considering the following uses for their corn waste product: The germ, husk, and cob could be finely ground and sold as raw material for animal feed, filling, and other applications. This option would not require the purchase of any new equipment, since it can be done with the machinery already on site. However, it would require the hiring of at least 5 people to oversee the new operation and would increase the maintenance costs of the machinery by 2% due to extra wear and tear. Assuming all of the waste can be processed this way, the resulting revenue from this option would be $1000 per ton

Answer 1

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