REN R260 Lecture Notes - Lecture 20: Syngenta, Rachel Carson, Atrazine

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21 Sep 2016

School

University of Alberta

Department

Renewable Resources

Course

REN R260

Professor

Rick Pelletier

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Document Summary

The trend for scientists is that more and more are accepting that climate change is real and that it is man-made, however there is an opposite trend in public perception. As time goes on, more and more people think it is not man-made or even not real. Your point of view is related to the industry that is where you live. European union has banned atrazine, while the united states negotiates continued use. Concern: where the money came from would in uence the results. The money determines the questions that you ask. What the science says -> how it"s portrayed in the media -> how the public accepts it. He takes the results to the board and he quits. B/c they kept asking him to make revisions to his paper and it felt like they were trying to manipulate the results. Never be satis ed with anything that"s published, always ask for new research.

Related Questions

Background When you look at news reports of any kind, there can be a tendency to take them at face value, accepting what they tell us as the truth. This is usually a grave mistake. News typically moves quickly, with tight deadlines to get information and there is almost always a bias at play. Numbers are an easy way to manipulate the truth--and truth itself can be pretty flexible when it comes to human relationships. The value of the truth can also be flexible depending on your point of view. For example, in the second quarter of 2015, the U.S. dollar is strong--meaning it has a high value against foreign currency. Is this a good thing or a bad thing? If you're a consumer, it's generally a good thing in the short-term. It means items imported to the U.S. cost us less to buy. Go us! If you are a growing business that exports, it's a bad thing because your costs make it difficult to compete with locally produced goods in foreign markets. If you're traveling out of the country, it's good because the dollar goes farther. If you have a business that benefits from foreign tourism, it's bad because visitors have less money and may chose to go to other places where their money gives them more buying power.

find an article (you might try MSN Money or CNN Money or something similar) and then write at least 600 words. how strong the position the article takes is. Questions to consider include: What are the weaknesses to the article? How are numbers used effectively? What's missing? How are the numbers being used to disguise something?

ARTIcle

President Obama slapped a stiff 35% tariff on Chinese tires in 2009 after American companies complained about unfair competition. They said China was flooding America with tires at low prices making it tough for U.S. companies to compete. The tire tariff gradually waned, and finally ended in 2012. The tariff saved 1,200 U.S. tire jobs, which had been in sharp decline. And U.S. tire production rose after a major decline. "Over a thousand Americans are working today because we stopped a surge in Chinese tires," Obama said in his 2012 State of the Union address. But a study from the Peterson Institute of International Economics found that the tariffs cost Americans in many other ways. Americans paid more for tires. Some Chinese-made tires cost as much as 26% more -- rising on average to $39 per tire, from about $31. And U.S. tire makers, facing less competition from China, also raised prices on American-made tires 3.2%. According to Peterson's model, higher prices from the tire tariff cost Americans an extra $1.1 billion, which translated to an estimated 3,731 retail jobs lost. Plus, China fought back by imposing penalties on U.S. shipments of chicken parts. The Peterson study estimates that China's retaliation cost American chicken producers $1 billion in sales. "Tire safeguards did not change Chinese policies in a helpful way, nor did they boost U.S. employment," wrote Gary Hufbauer, a trade expert at Peterson, who authored the report. Indeed, the tariffs didn't bring the tire-making jobs back to previous levels -- a similar trend that's played out for the rest of U.S. manufacturing. But they did help to stem the job losses. In 2008, there were about 60,000 American workers making tires. Now, there are about 55,000. That's better than the low point reached in 2010 but not back to pre-tariff levels. Related: Trump's 35% tariff on companies: Easier said than done An Obama administration official, who requested anonymity, disputed some of the calculations and assumptions in the Peterson study. For instance, the official claimed tire prices did not go up by as much as the study claims. Hufbauer said no one until now had contested any of his analysis in the four years since it was published. He noted that the administration official didn't provide an alternative estimate for price changes. Republican presidential nominee Mitt Romney criticized Obama for the tariffs in his 2010 book "No Apology." "President Obama's action to defend American tire companies from foreign competition may make good politics by repaying unions for their support of his campaign, but it is decidedly bad for the nation and our workers," Romney said. U.S. tire makers still applaud Obama's tariffs. Morry Taylor, CEO of Titan International, a U.S.-based tire company, is one of them. "He did what he should have done and he should have done more of it," says Taylor, who voted for Trump. His company has plants in Ohio, Wisconsin and Illinois (they also have operations in Brazil and Russia). Related: 3 ways Trump can go after China and Mexico Taylor argues that if the tariffs weren't put in place he might not have any business today to speak of. By 2012, Taylor still had 1,800 tire-making workers, about the same amount as before the tariffs. Today, however, his firm only has a little more than 900 workers. His problem today is what he describes as unfair competition from India, where firms make cheap tires and sell in the U.S. at prices he can't afford to sell at. He hopes Trump considers higher tariffs on tires, saying it would save jobs. To be clear, Obama wasn't trying to "bring back jobs" so much as protect the ones already in America, which he accomplished. Trump wants to bring manufacturing jobs back from other countries. Some trade experts believe that would be difficult task, since many of jobs overseas are low-skill positions and many U.S. manufacturing firms now want highly skilled employees. In any case, U.S. tire production recovered but didn't surge. Instead, U.S. tire imports from all other countries excluding China rose dramatically, Hufbauer found. In other words, the Chinese tire jobs didn't come to the U.S. -- they went to the next cheapest countries. In the end, Hufbauer argues the tariffs didn't make a difference. "The best thing about the tire tariffs is that they expire," Hufbauer wrote in 2012. CNNMoney (New York) First published January 3, 2017: 3:41 PM ET

Peter Schultz IV, president of Schultz Quality Furniture, takespride in carrying on a tradition of manufacturing custom qualityfurniture, a skill that was started by his great-grandfather insouthern Germany almost 100 years ago. In the 1930, Peter'sgrandfather immigrated to the Unites States and settled inPennsylvania where he incorporated the furniture business.

Throughout its existence, the company has focused on the highend of the furniture line and remained relatively small. They werenot interested in getting into the mass production of lesserquality items. Their workmanship and quality of product haveattracted a loyal following of customers and clients who arewilling to pay a premium for Schultz furnishings.

Over the years, Schultz has changed their focus and emphasis tomeet changing consumer preferences and desires, however, some ofthe original designs are still being manufactured in certainpieces. While the core business has remained strong and fairlyconsistent, the company will sometimes venture off into some othermarkets and specialties.

Just two years ago, Peter Schultz IV purchased the controllinginterest in Garden Patios Deluxe. This is a small company whichspecialized in making high-end patio and outdoor garden typefurniture. The furniture is sturdy, rust resistant and uses qualitymaterials which resist weathering and fading for a number of years.Peter thought this line of furniture would be a good compliment tohis company since Garden Patios Deluxe concentrate on the superiorquality furniture, have a relatively small operation, and support aloyal customer base. Also, with the general trend of the populationnow entertaining more and enjoying the outdoors, there seemed to bea sustainable market for patio furniture of this type.

So far, the operation of Garden Patios Deluxe has been asuccess. The company is bringing in a profit, but it has been alittle harder to attract a market than Peter first imagined. Thenorthern climate can tend to limit the outdoor season, and itseemed that people did not want to pay a lot of money for patiofurniture that would have to be in storage for half the year.

As a matter of course, Peter likes to review the manufacturingprocess for the different furniture lines about every eighteenmonths. He was interested in getting a detailed breakdown on theproduction cost and methods used to make the patio tables andchairs.

The material is a specially developed compound of structurallysound polymers, which is molded and heat treated by a supplier. Thecompound comes in four basic colors of beige, forest green, grayand white. The furniture pieces are constructed at the GardenPatios plant and parts like the fabric seats, glass inlays, andother decorative features are assembled.

The plant used in this manufacturing capacity is operating atabout 90% of capacity, although there are some seasonalfluctuations. The busy season is from November through May prior tothe outdoor entertainment season. In the summer, much time is spentin redesign and testing of new models or experimenting onvariations in existing product lines.

One of the most popular pieces made by Garden Patios Deluxe is asimple armchair. The chair has a molded frame that comes in about 4pieces along with a contoured fabric seat. The chairs can beretailed in a set with a table or sold separately. They areextremely comfortable and lightweight.

Peter wanted to know the actual cost of manufacturing a singlechair. The following unit cost are identified. The total costs arebased on a normal annual volume of 40,000 chairs. The currentselling price of the chairs is $75 each.

Item	Costs/Unit	Costs/Unit	Total Costs
Materials
Main Frame	9.00		$360,000
Chair Arm	2 @ $1.75 = 3.50		140,000
Stand	4.50		180,000
Fabric Seat and Back	5.00		200,000
Related Supplies	2.00		80,000
Total Materials		$24.00	960,000
Labor
Fabric Labor	30 min @ $10 = 5.00		200,000
Assembly Labor	20 min @ $12 = 4.00		160,000
Total Labor		9.00	360,000
Fixed Overhead
Manufacturing	150% of Labor = 13.50		540,000
Administrative	25% of Material = 6.00		240,000
Total Fixed Overhead		19.50	780,000
Total Manufacturing Cost		$52.50	$2,100,000

Required: (please show your work)

1. If Schultz QualityFurniture sells all 40,000 chairs, how much will the company makeon the chairs?

2. If the company is ableto produce and sell 44,000 chairs, how much will the company makeon the chairs?

3. What is the marginalcost of making one additional chair?

4. During the off season,a special order for 3,000 chairs has come in from an overseesgovernment agency. However, because of the currency exchange rate,this company is only willing to pay $50.00 per chair, but Schultzwill have to pay a shipping and tariff cost of $5 per chair. ShouldSchultz Quality Furniture accept this order? How much money willthe company make or lose on this order?

5. The supplier whoprovides the special polymer material for the chairs has introduceda proposal to ship the chairs to Schultz fully assembled for $50.00per chair, which is less than the current manufacturing cost toSchultz of $52.50. All Schultz would have to do is send the chairsout to their customers. Should Schultz accept the offer? How muchmoney will the company make or lose on this offer?

6. The marketing managerbelieves that the customer base for chairs is pretty strong andthat a price increase to $80 per chair would only reduce demand by2,000 chairs. Should Schultz implement a price increase? If theactual price per chair were increased to $80, how far could theannual demand for chairs decline before Schultz would beindifferent between the $75 price and the $80 price?

7. What nonfinancialissues should be considered before decisions are made regarding theproduction and sale of these chairs?

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REN R260 Lecture Notes - Lecture 20: Syngenta, Rachel Carson, Atrazine

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