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Date: | Wed, 2 Jul 2008 07:05:42 -0400 |
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Eric Simms wrote:
> By the way, you counter your arguments: with
> the rising prices of fuel and other commodities, that is yet
> another good reason to have less bees to be more profitable when
> honey prices are up: you'll use half as much fuel and all of your
> operating costs are lower as I stated. *THINK* then type.
Economy of scale comes into any business decision. Small is not
necessarily good nor is big. There is a right point where production
costs and demand meet.
When you get into the commodities arena, small generally does not work
unless you can deliver a specialized product. The margins are just too
small. Take fuel costs. You have a marginal increase in cost per unit
added, compared to an empty rig. So more is actually better. You want
to fully load the truck/semi whatever with a full load to get the best
return. Same goes for shipping honey or any commodity with a small
margin. You want to sell more to get the best return. Especially when
demand is high and the margin is great.
Companies do not downsize when their product is in demand and margins
are greater. They take advantage of the situation and produce more.
Since I have completed typing, I will now think.
Bill Truesdell
Bath, Maine
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