Lian is a chicken farmer. Her farm is located on the edge of a busy town. The main output from her farm is eggs. The eggs are transported by truck to customers. The eggs are sold through various channels of distribution. CE has an excellent reputation for fresh, high quality eggs. It offers a 'money back' guarantee if the consumer is not happy with the quality of the eggs. All the eggs are labelled with a 'best before' date which gives the consumer an idea of how long each egg will remain fresh. Lian has two production lines at the farm; one for the industrial market and one for the consumer market. Table 1.1 contains some data about the two production lines. Table 1.1: Production line data | | Production Line A | Production Line B | |---|---|---| | Type of market | Industrial | Consumer | | Number of employees | 4 | 6 | | Sorting process | None | Eggs sorted into small, medium and large | | Packaging | Trays of 100 eggs | Boxes with 6 of the same size egg in each box | | Total variable costs | $2.70 per tray | $0.45 per box | | Price | $4.00 per tray | $0.90 per box | The fixed costs for the business are $10000 per month. These are allocated equally between the two production lines. Lian would like to expand CE by keeping more chickens and opening a new production line. The new production line would require five employees who would need to be recruited and trained. It would specialise in sorting and packaging eggs that will be sold to retailers.