The chicken or the egg: hatching a new and innovative product


Case Questions: Would you determine to “hatch” Chicken 

Sensations? Put yourself in Vicki’s shoes. Prepare an segregation 

that procure conduct PFVC’s judgment on whether to enlarge 

Chicken Sensations. 

1.   Economic feasibility segregation: Perform an economic absorb-

benefit segregation of whether PFVC should enlarge Chicken 

Sensations. Clearly set-forth your judgment and conclusion 

from your segregation. (You can use an Excel spreadsheet to 

full these tasks in an arranged, handy postscript to 

your contingency segregation. A reader of your contingency should be able 

to prosper your is-sue and computations. The results of 

your postscript analyses can be referenced in the substantiality of 

your contingency to foundation your judgment.) To aid your segregation, 

perform the prospering tasks:

  a.   Quantity, return, and absorb conversions: Take Vicki’s 

grounds from Table 1 and investigate the bulk, return, 

and absorb conversions to full Table 1. For 

example, investigate annual sales returns (in contingencys), 

sales return and shifting absorb amounts per contingency, and 

annual urban absorb amounts. 

  b.  Forecasted aid loophole pay set-forthment: 

Prepare a prepareed Chicken Sensations aid 

loophole format pay set-forthment for year 1 based on 

the projected grounds collected by Vicki. 

  c.   Breakeven segregation: Prepare a breakeven point 

segregation (in contingencys and sales dollars) for the year 1 

forecasts of Chicken Sensations. 

  d.  Margin of prophylactic: Prepare a loophole of prophylactic segregation 

(in contingencys and sales dollars) for the year 1 prepares of 

Chicken Sensations.

  e.   Sensitivity analyses: Prepare sensitivity analyses to 

examine how hearty year 1 results are to diversifys in 

projections for (1) the sales quantity of contingencys, (2) the 

sales expense per bag, and (3) the absorb per triturate of 

chicken. Assume that these amounts can diversify for 

three contrariant convexity razes as reported in Table 2: 

(1) a pessimistic raze, (2) the pristine raze, and (3) an 

optimistic raze. Table 2 shows that the sales quantity 

(in contingencys) procure be 75% of the pristine year 1 sales 

forecast, the sales expense per bag procure singly be 90% of 

the pristine prepare (or $2.70/bag = $3.00/bag × 90%), 

and the absorb per triturate of chicken procure flow to 112.50% 

of the pristine prepare (or $2.25 /lb. = $2.00/lb. × 

112.50%) for the pessimistic raze. The pristine raze 

reports the results using the pristine convexitys in 

the contingency. Under the optimistic raze, the sales quantity 

prepare (in contingencys) procure be 125% of the pristine year 1 

sales prepare, the sales expense per bag procure growth to 

110% of the pristine prepare (or $3.30/bag = $3.00/

bag × 110%), and the absorb per triturate of chicken procure 

decrease to 87.50% (or $1.75 /lb. = $2.00/lb. × 87.50%).

  Report your sensitivity segregation results in Table 3.