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Correctedquestions - Purchasing and Supply Chain Management...

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Purchasing and Supply Chain Management BUMKG 337/537 Click to insert title eg., Assignment 1 - Expectations Name(s) (Listed in alphabetical order)-Role if Group Assignment: see below Appleseed, Johnny-Leader Doe, John-Recorder Section No: XX Group No: XX Due Date: Month/Day/ Year
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2 337/537 Purchasing and SCM What are the barriers to new entrants? Barriers to new entrants include: Specialized equipment need Need a contract to produce—which is hard to do when industry is stagnant Processing plant needs to be near by Need to meet market demands Production costs are higher for specialty crops Labor needed for harvesting Limited production time due to seasons Investment bankers promoting ethanol admit the barriers to entry Building new ethanol plants is very unlikely http://www.ethanolproducer.com/article.jsp?article_id=3090 http://www.aphis.usda.gov/newsroom/speeches/content/2007/03/CA_GrapeTreeNut3-26-07.shtml Barriers to entry are present within the ethanol industry
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3 337/537 Purchasing and SCM What effect do these patterns have on costs, i.e., inventories, production capacity? Production Capacity 85% of the United State’s ethanol production is made from corn, making corn (feedstock) crucial Cost of producing ethanol from corn is estimated at $1.10 per gallon as of August 2007 Production Costs Higher during off-season, since it’s not as easy to grow corn
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Correctedquestions - Purchasing and Supply Chain Management...

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