CostCo Vertically Integrates to Manage Rotisserie Chicken

CostCo Vertically Integrates to Manage Rotisserie Chicken

October 24, 2019

Costco is planning to vertically integrate by owning production of 40% of its rotisserie chicken supply chain.

Vertical integration is an effort to keep the price at $4.99 to attract customers.  The issue is that the main chicken suppliers are producing fewer whole birds, down from 50% of the supply in the 1980s to just around 15% of the supply today.

Bird size has also increased as the demand for chicken has increased.  Most whole chickens today are too big to fit on the Costco rotisserie production equipment.  Costco needs 6 pound birds and the typical whole chicken is now 7-8 pounds from suppliers.

Costco can control the size of the bird and plans to cut costs per bird by 35 cents by developing their own poultry complex.


Video Spotlight: This Is Why Costco Only Charges $5 For A Rotisserie Chicken


This post is based on the CNN article, Five things to know about Costco’s $4.99 rotisserie chickens, by Nathaniel Meyersohn, October 14, 2019, and the YouTube video, This Is Why Costco Only Charges $5 For A Rotisserie Chicken, by Mashed, February 5, 2019. Image source: Uwe Starke/Image Source

Discussion Questions:

1. After reading Continue reading

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Climate Change Is Changing Agriculture

Climate Change Is Changing Agriculture

In agriculture, adapting to climate change has become a necessity.

As weather patterns change around the globe, growers are learning to adapt in different ways. Some can afford to partner with scientists and plant experimental trees; others are forced to change their crops. For farmers, transitions to new product designs and operations are costly, and the viability of these transitions is as uncertain as the weather itself.


Video Spotlight: Growers Fighting Climate Change


This post is based on The New York Times article, In a Race Against Warming, Growers Try to Outsmart Climate Change, by M. Cone, September 21, 2019, and the YouTube video, Coffee Growers Combat Climate Changeby GreenTV, May 11, 2012. Image source:  Shutterstock/Valentyn Volkov

Discussion Questions:

1. What are the effects of climate change on agriculture and farmers’ lives?

Guidance: During warmer winters, there have not been enough chilly days for male trees to produce the pollen when female trees need it. Pests and diseases have increased. Extreme, sudden temperature changes have killed mature trees. Extreme heat waves and droughts have decimated crops and cattle. The effects of climate change on farmers’ lives are not negligible either: reduced income, increased Continue reading

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Apple Dodges Tariffs in Texas

Apple Dodges Tariffs in Texas

October 7, 2019

Apple is moving its Mac Pro production to Austin, Texas, as part of a plan to invest $350 billion in the U.S. economy by 2023.

Apple already has manufacturing locations in 36 states with 9,000 domestic suppliers. The move not only helps Apple to abate the impact of trade tariffs but also to have a product that is made entirely in USA.


Video Spotlight: Mac Pro to be manufactured in Texas


This post is based on the IB Times article, Apple News: Mac Pro Production Moves To Texas To Dodge Tariffs, by Thomas Kira, September 23, 2019, and the YouTube video, Mac Pro to be manufactured in Texas, by Newsy, September 23, 2019. Image source: © McGraw-Hill Education

Discussion Questions:

1. In what ways is Apple’s decision to move its Mac Pro production to Austin, Texas, capacity-related?

Guidance: The move is a capacity-related decision because Apple has to determine what capacity it needs to make Mac Pro using only domestic suppliers and workers instead of outsourcing the assembly processes to China.

2. What are the reasons for Apple to move its Mac Pro production to Austin, Texas?

Guidance: Trade tariffs make it less economical to Continue reading

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