PLACE N RETURN BOX to remov- thb checkout from your rocord. TO AVOID FINES Mum on or More data duo. DATE DUE DATE DUE DATE DUE MSU I. An Affirmative Action/Equal Opponunlly Initiation mm.- II LIB 13‘ ARY Michigan Sm: University . 3'" 1 ‘~~ .4 « 'In ‘3 "it. . 5-... p in a a '6 ABSTRACT PROFIT MAXIMIZATION IN COMMERCIAL GREENHOUSE FLORICULTURE UNDER NORTHERN UNITED STATES PRODUCTION AND MARKETING CONDITIONS: A LINEAR PROGRAMMING APPROACH BY Carl Frank Gortzig Managers of commercial greenhouse flower production businesses in the northern United States operate in a rapidly changing business environment. Technological developments in transportation and crop production favor distant producers and enhance their ability to compete effectively in northern markets. Operating costs for greenhouses in the industrial north increase substantially each year. Greenhouse managers experience difficulty in recruiting and retaining permanent employees given the competition from larger, generally unionized employers. Given this situation, the purpose of this study is to determine greenhouse crop production profit maximizing combinations under northern United States production and marketing conditions. Linear programming, an operations research technique, is used. The method enables managers to identify optimal combinations of crop enterprises which will return maximum.profit to their fixed resources. Greenhouse production area and permanent employee complement are considered fixed resources in the study. To obtain essential cost and return data and estimates of coeffi- cients for production inputs of greenhouse production space and labor of the nine crops included, data were collected from greenhouse firms in Michigan and supplemented with data from two out-of-state firms. With these data, linear programming models are developed for these production schemes: (1) specialization (monocropping) in each of these crops - Carl Frank Gortzig carnations, standard chrysanthemums, snapdragons, potted chrysanthemums, geraniums, poinsettias, (2) a diversified crops program offering oppor- tunity to combine monocrop options with roses for cut flowers, bedding plants and Easter lilies, (3) a potted plant specialization, (h) a cut flower specialization, (S) a bedding plant and geranium specialization, and (6) a program.of bedding plant specialization January through May followed by a diversified crop operation in the remainder of the year. The optimal mixes of crops which emerge in the analyses using each of these models identify a series of guidelines useful to the man- ager in the development of efficient production programs. The diversi- fied crops program is shown to be the most profitable in terms of net return to specified levels of the fixed resources of greenhouse pro- duction space and permanent employee labor. Analysis with the potted crop specialization model shows the combination of crops to be second most profitable. Cut flower specialization emerges third in profit- ability. Other models yield generally unprofitable results primarily because inadequate levels of permanent labor prevent full use of the production space resource. Analysis of the results of studies using the models yields numerous production guidelines for each of the crop specializations and the diversified crop programs. Finally, a model is devised to study the use of temporary employees to supplement the permanent employee resource at peak labor periods in the diversified crops program. Given unlimited temporary labor and three possible hourly wages, $2.00, $3.50 and $5.00, analysis of the op- timal crop mix yielded by the model provides labor management guidelines. PROFIT MAXIMIZATION IN COMMERCIAL GREENHOUSE FLORICULTURE UNDER NORTHERN UNITED STATES PRODUCTION AND MARKETING CONDITIONS: A LINEAR PROGRAMMING APPROACH By Carl Frank Gortzig A DISSERTATION Submitted to Michigan State university in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Horticulture 1976 ACKNOWLEDGMENTS The author acknowledges with appreciation the participation of his Guidance Committee: Professors John Carew, William H. Carlson, William J. Carpenter, and Alvin L. Kenworthy of the Department of Horticulture and Professors Stephen B. Harsh and Ralph E. Hepp of the Department of Agricultural Economics. He acknowledges with special gratitude the counsel of Professor Carpenter, his Guidance Committee Chairman. When Professor Carpenter became Chairman of the Department of Ornamental Horticulture at the University of Florida, Professor Kenworthy assumed the Committee Chairmanship. His splendid support and encouragement in the final year of the project is gratefully acknowledged. The author acknowledges with special appreciation the tremendous contribution of Professor Stephen Harsh. The operations analysis methods ology used.made his contributions essential to a successful program. He generously gave of his time and counsel far beyond usual expectations. The author also acknowledges the splendid support and encouragement of Professor John Carew, a revered counselor throughout the graduate program. Finally, the author recognizes with much appreciation the contri- butions of the floriculture firm.managers who gave so generously of their knowledge, records information, and time without which this study would not have been possible. ii TABLE OF CONTENTS Chapter I INTRODUCTION The Objective Methodology Historical Perspective and Current Situation Review of the Literature and Previous Research II THE LINEAR PROGRAMMING MODEL Background Assumptions Inherent in Linear Programming Maximization or Minimisation Divisibility Fixedness Piniteness Certainty Homogeneity Additivity and Linearity Advantages and Disadvantages of Linear Programming General Procedure The Model Production and Marketing Cycle Characteristics of the Owner/manager Mechanization 111 Page 10 20 22 22 23 23 23 23 23 2h 2h 27 30 31 Chapter Page Greenhouse Heating 31 Market 31 Point of Sale and Delivery Practices 32 Enterprises and Internal Options 32 The Objective Function of the Model 33 The Constraints in the Model 3h Greenhouse Crop Production Area 3h Permanent Employee Component 35 Market Quotas 36 The Estimates of Values for Constraints, Prices of Inputs and Outputs, and Coefficients 36 Determination of Levels of Constraints 3? Pricing Greenhouse Production Area he Pricing Fixed Cost fOr Permanent Employee ComplementSO Estimating Crop-Specific Variable Costs 51 Establishing Market Returns for Products Sold 55 Estimates of Greenhouse Production Area and Labor Coefficients for Crop Enterprises and Options 63 III ANALYSIS MADE WITH THE MODEL 67 Crap Specialization 67 Comparison of Production Options for Carnations 67 Comparison of Production Options for Standard Chrysanthemums for Cut Flowers 8h Comparison of Production Options for Single- Stemmed Snapdragon Crops 95 iv Chapter Comparison of Production Options for Potted Chrysanthemums Comparison of Production Options for Geraniums Comparison of Production Options for Poinsettias The Diversified Crops Program Bedding Plants Easter Lilies Optimal Crap Mix for Diversified Crops Program The Potted Plant Specialization and the Cut Flower Crop Specialization The Potted Plant Specialization Model The Cut Flower Specialization Model Comparison of Profitability and Croo Compsotion of the Several Diversified and Specialized Production Programs Model fer Employment of Temporary Labor Analysis of Program Results Guidelines for Producers Limitations of the Model for Employment of Temporary Labor IV SUMMARY BIBLIOGRAPHY Page 106 116 lhl 155 155 157 175 211 211 220 225 23h 2th 215 2h6 2&9 251 10. ll. 12. 13. lha. 11m LIST OF TABLES weeks assigned.to each calendar month in the model Area under glass and plastic fer lb Michigan and 2 out-of-state firms, 1970 Composition of employee complement in firms studied Flower crap production receipts and expenses, 9 northern united States firms, 1970 Flower crop production and marketing expenses; data from 3 studies Basis for fixed costs of greenhouse production area in model firm Cost of production per ft2 of production area under glass as determined in 3 studies Salary and wage rates paid, 10 northern Uhited States greenhouse firms, 1970 Salary and wage rates used in the model firm Costs of ingredients in soil mixture used in model CrOp Options with market quota Wholesale market prices assigned crop options in the model Descriptive summary of models used in study Carnations: production Options available in the model Carnations: summary of optimal crap mix vi Page 30 38 ho AS h6 h7 h8 h9 50 S2 58 68 72 73 Table 15. 16. 17. 18a. 18b. 19 21. 22a. 22b. 23. 2h. 25a. Carnation Options and number of units of each in Optimal crop mix Carnations: production periods in which labor is limiting; marginal returns for labor in these periods Carnations: summary of use of 600 hours/week Of permanent employee resource Standard chrysanthemnns: production Options available in the model Standard chrysanthemums: summary of Optimal crop mix Standard chrysanthemums: production periods in which labor is limiting and marginal returns for labor in these periods Standard chrysanthemums: summary of use Of 600 hours/ week of permanent employee resource Standard chrysanthemums: marginal returns for holiday crOp Options with market limits Snapdragons: production options available in the model Snapdragons: summary of optimal crop mix. Snapdragons: production periods in which labor is limiting, marginal returns fOr labor resource in these periods Snapdragons: use of 600 hours/week available permanent employee resource Potted chrysanthemums: production Options available in the model vii Page 75 78 78 86 87 89 89 90 97 98 100 101 109 Table 25b. 26. 27. 28. 31. 33a. 31:. 35a. 35b. 36. Potted chrysanthemums: summary of Optimal crOp mix Potted chrysanthemums: production periods in which labor is limiting and marginal returns fOr labor resource in these periods Potted chrysanthemums: summary of use of 600 hours/ week of permanent employee resource Geraniums: market prices assumed in the model Products sold from geranium.stock plant Options in the optimal crop mix Geraniums: units of finished h inch pots by source of plant material Geraniums: finished plants in h inch pots in the optimal mix Geraniums: finished Options other than h inch pots in the Optimal mix Geraniums: production periods in which labor is limiting and marginal returns fOr labor in these periods Geranium: summary of use of 600 hours/week of permanent employee resource Poinsettias, finished plants, wholesale market prices, market quotas and quantities sold Bedding plants: production Options available in the model Bedding plants: summary of Optimal crOp mix Easter lilies: cost of bulbs and started plants, and whole prices fOr production Options viii Page 110 112 112 123 128 130 131 132 135 136 1&6 158 160 165 Table 37. 38. 39. hO. bl. he. 1:3. M. hs. “7. h8. Diversified crops program: Optimal crop mix Diversified crOps program: weeks in which greenhouse production area is limiting, and marginal returns for a unit of space in these periods Diversified crops program: weeks in which labor is limiting and marginal return for labor in these periods Diversified crOps program; summary of use of 600 hours/ week of permanent employee resource Diversified crOps program: comparison of net return to fixed costs for nine northern United States firms with those generated in the model, and in the Massachusetts model Diversified crOps program: finished poinsettia Options in the Optimal crOp mix Diversified crOps program: finished geraniums produced from purchased prOpagation materials Potted plant specialization: optimal crop mix Cut flower specialization: optimal crop mix Annual mean greenhouse production area and permanent employee resource used to produce the optimal crOp mix in several diverse crOp programs Optimal mixes fOr diversified and specialized crOps programs: composition by crOps; contribution of each to total return to fixed costs Return to fixed costs for diversified and specialized production programs ix Page 166 176 180 181 181 201 207 212 221 225 226 227 Table Page h9. Total and net return to fixed costs for various levels of employee resource and wages 236 50. Model for employment of temporary labor: crops and Options produced 239 Figure 5. 10. 11. LIST OF FIGURES Carnation: greenhouse production area used in Optimal crOp mix Carnation: permanent employee resource used in Optimal crop mix Standard chrysanthemums: greenhouse production area used in Optimal crop mix Standard chrysanthemums: permanent employee utilization in optimal crOp mix Snapdragon: greenhouse production area utilized in Optimal crOp mix Snapdragon: permanent employee resource utilization in Optimal crop mix Potted chrysanthemum: greenhouse production area in Optimal crOp mix Potted chrysanthemum: permanent employee resource utilized in Optimal crop mix One commercial prOpagator's prOposed 9-month geranium production program One commercial propagator's proposed 7-month geranium production program One commercial propagator's proposed 5-month geranium production program xi Page 77 79 91 92 103 10h 11h 115 118 119 120 Figure 12. 13. 1h. 15. 16a. 16b. 17. 18. 19. 21. 22. 23. One commercial prOpagator's prOposed 33-month geranium production program Geraniums: greenhouse production area in Optimal crOp mix Geranium: permanent employee resource utilized in Optimal crOp mix Poinsettias: production and marketing Options available in the model firm Poinsettia: greenhouse production area used in Optimal crOp mix Poinsettia: permanent employee resource utilized in Optimal crop mix Diversified crOps program: Easter lily production in marketing Options available: Options in Optimal mix Diversified crOps program: greenhouse production area utilized Diversified crops program: permanent employee resource Potted plant specialization: greenhouse production area in Optimal crOp mix Potted plants specialization: permanent employee resource utilization in Optimal crOp mix Cut flower specialization: greenhouse production area in Optimal crOp mix Cut flower specialization: permanent employee resource utilized in Optimal crOp mix xii Page 121 133 13h lhh 1h8 1&9 16h 173 177 218 219 223 22h Figure 2%. 25. 26. 27. 28. Bedding plant and geranium specialization: greenhouse production area.in Optimal crOp mix Bedding plant and geranium specialization: permanent employee resource utilization in optimal crOp mix Bedding plants January through May, diversified crOps June through December: greenhouse production in Optimal crop mix Bedding plants January through May, diversified crOps June through December: permanent employee utilization in optimal crOp mix MOdel fOr employment Of temporary labor: greenhouse production area utilized at various wage levels MOdel for employment of temporary labor: combined hours of permanent and temporary labor utilized at various wage levels xiii Page 229 230 231 232 237 238 ._: '.-. I.‘ 1“. CHAPTER I INTRODUCTION In the dynamic business environment of the 1970's, managers of northern United States greenhouse flower production firms need to increase their effectiveness as management decision-makers. They must apply sOphisticated.management tools and techniques to the analysis of their Operations, and to the study of enterprise combi— nations for the most profitable use of production resources. Among;the situations about which Operators of floriculture production firms need to be able to make decisions are (1) combinations and rotations of crop enterprises and crop production Options which are most profitable fOr their specific production and marketing situap tions, (2) adJustments in fixed resource levels, and (3) the impact Of limitations imposed‘by the manager on the quantities of fixed resour- ces to be made available, the nature Of crop enterprises, and the flexibility Of resource organization. The Objective The general ObJective of this study is to determine greenhouse crOp production profit maximizing combinations of florist crop enter- prises under northern United States greenhouse production and marketing conditions. Mu. .nw any. 2 Methodology Linear programming is used in the study. This Operations research technique as used here enables one to establish guidelines for general use by northern producers to analyze their businesses from the stand- point of Optimum combination of enterprises which will return maximum profit to fixed resource levels. A maJor advantage Of the method is that normative solutions to enterprise combination and resource use prOblems are generated for a rather specific level of production resources . Historical Perspective and Current Situation A brief examination of the historical develOpment and the current situation of northern United States floriculture provides an essential base fOr understanding the industry's need fer the adaption Of'modern and effective management decision-making methods. The commercial production of florist crOps occurs with varying degrees of intensity in all regions_of the United States. The products Of the industry include cut flowers, potted flowering and foliage plants and garden bedding plants. Nationally, the current value at wholesale of the flower producers' output is conservatively estimated by industry economists to be in excess of $500,000,000 (12). At retail, floriculture goods and services are currently valued at above $2 billion annually. Available data indicate that retail florist shops account for about two-thirds of the volume with non-florist outlets accounting fer the remainder (12). Some industrymen indicate that the latter outlets 3 account for as much as one-half Of the total volume, and that their share is increasing steadily. In the northern United States, florist crop production occurs primarily in the highly cmtrolled environment of the glass or plastic greenhouse. The industry of this region has its roots in the nineteenth century greenhouse firms which served emerging urban areas. The perishable nature of their product, the limitations of the available transportation of the time, and the lack of wholesale flower producers combined to require the florist firm to locate near to its consumers and to produce its own flowers and plants to be assured of a year-round supply. In the tradition Of the times and of their agricultural beginnings, early floriculture firms tended to be family-owned and Operated (16). There has been a strong tendency for businesses to be transferred from one generation to the next, and at present, it is usual for a business to have been started by the present owner's grandfather or even his great grandfather. As the demand for flowers grew, family Operations added more greenhouses. They soon found simultaneous crOp production and retail selling in the greenhouse and work shed to be increasingly incompa— tible (36). The retail grower’s shOp, a facility designed specifically for selling, soon began to appear as an attachment to the greenhouse. Division Of labor set in, Often with the florist's wife assuming cmsiderable responsibility for the retail Operation. The retail flower shOp as a business unit separate and distinct from crop production began to appear in large cities in the early inth uei nd1 I Q d h 1860's. These shops were at first retail outlets Opened by the producer as a direct sales channel to the large numbers of consumers in the growing cities. But soon, other persons not affiliated with the industry saw the retail florist shop as a business opportunity and the first stores without production facilities appeared. With the development of the city stores, growers peddled flowers and plants from store to store. At about the same time, increasing diversity of flower species and varieties began to be grown, and as a grower developed a reputation for a given product, say roses, his returns increased and the demand for more of his roses developed. As a logical next step, we find these growers specializing increasingly in one or two crops (26). Specialization and theincreasing numbers of retail stores soon led to the need for central market facilities where the retailer could procure a broad selection of flowers, and where the grower could perform the marketing function with a minimum Of time loss from his production Operation. The wholesale commission florist emerged to meet these needs. He became the growers' marketing agent and the retailers' purchasing agent; he received flowers and plants from the grower, usually on consignment, and assumed full responsibility for the wholesale marketing, handling, delivery, credit and accounting functions. Growers were more than content to devote run time to crOp production . (36). This functionally specialized system grew and worked well through World War II. But the post-war years brought dramatic and rapid change. Significant growth in population and in disposable income brought increased demand for the products of floriculture. The advent of the ass-a needs shop. uric: Op ii. '1‘ UN SCSBC 5;, Fe 5 mass-market system of retailing geared to serve all of the consumer's needs in one store challenged the specialty nature of the retail florist shop. DevelOpments in air and truck transportation Opened.northern markets to the production of distant regions (6). Postawar floricul- tural research gave the grower a new body of technology which intro- duced an unprecedented level of precision into crOp production schedules and increased both quality and quantity of output. These developments have combined to give the American flori- culture industry as it enters the 1970's dimensions very unlike those of Just 20 years ago. The northern grower now shares his markets with the product of the distant shipper. The latter producers usually with newer facilities are Often more sOphisticated in their production and marketing techniques and so provide increasingly effective competition. And, both the northern grower and the southern and western united States shippers alike eye with uneasiness the growing volume of imported cut flowers reaching American markets. Among foreign are- as shipping cut flowers are Australia, Africa, Ecuador and Columbia in South America, and certain EuroPean nations. In 1960, cut flower importations were valued at $136,000 (31). By 1966, the volume was $1,250,000 (11); in 1970, $2,250,000 (31). The United States exports $1,500,000 - $2,000,000 worth of florist crops annually, mainly to Canada. Higher labor costs in the united States coupled with current unfavorable tariff rate provisions make it unlikely that the export market fer American-grown florist crops will increase very greatly. Recent research in the post-harvest handling of cut flowers provides both fOreign and distant united States producers with still more 6 opportunity to reduce shipping costs while placing a higher quality product on the market . Like growing, the retailing of florist crOps has come in for its share of change in the early 1970's. By tradition, the retail florist is a merchant who provides the consumer with cut flowers, potted plants, and apprOpriate accessories. But among the retail florist's most significant functions may well be the provision of the services of advice, design, credit and delivery as they pertain to the use of flowers for numerous social, sentimental and emotional occasions. Historically, there has been little interest or effort on the part of the retail florist to satisfy consumer demand for low-service, therefore lower priced, flowers for regular use in the home and the environment. Consequently, it is not surprising to find that mass merchandising Of flowers and plants in supermarkets and variety stores has been steadily increasing since its inception just prior to World War II. Fisher Foods, Inc. of Cleveland, and Krogers, both supermarket chains, report that flower and plant sales represent one of the most profitable non-food departments in their Operation (1:3). Alpha Beta, Sentry Foods and Acme Markets sell flowers on a regular basis (25). In a recent stuh (3h), innovatOrs across the floriculture industry nationally were asked to identify major trends occurring in commercial floriculture. The trend identified most frequently, and twice as often as the second-place trend, is that of increase in mass marketing of flowers. Research shows that sales through mass merchandisers are mostly sales in addition to those made by retail florists (2). They are sales of florist products with 7 relatively few, if any, of the services traditionally added‘by the retail florist; they are sales of plants and flowers for daily use in the home, office or other environment. Possum (10) reports that of the $1.5 billion dollars in consumer expenditures fer the goods and services of commercial floriculture in 1967, one-third of these sales were through non-florist outlets. Bachman estimates that such sales utilize one-half of the total United States production of potted craps and cut flowers (3?). He predicts that by 1980 two-thirds of all florist crops sold will reach the consumer through outlets other than the retail florist shop. Offerings by the mass marketers have been heavily oriented to potted craps, and emphasis has been on sales for holidays and occasions. But supermarket and discount department store managers are increasingly interested in offering‘both cut flowers and potted plants on a continuous basis throughout the year (37). Berninger predicts that the supermarkets are trending toward'becoming maJor distributors of cut flowers (h). With these significant trends in the florist crop retailing apparently already well established, the decade of the 1970's is likely to produce profound changes in the type of product demanded from the producer. .A dichotomous marketing structure appears to be emerging. The traditional retail florist shOp likely will continue to meet the need for the highly serviced floral products required fer social occasions and for the personal and business gift trade. The demand for flowers for daily use in home and office will be served by the volume merchandiser in one manner or another. The florist crap producer likely will need to grow two grades of floral products to I set 71 who m 3; has be his a njor £011: to: nor 6nd meet the need of these different types of outlet. Furthermore, the producer may have a considerable role to play in selecting and develOping new species for the emerging mass markets . The northern wholesale grower's response to the changing situation has been vigorous especially in the last 15 years. With the influx into his markets of cut flowers from distant production areas, one of his maJor responses has been to switch his production efforts to potted foliage and flowering craps and bedding plants. The northern wholesale producer is adjusting in other ways as well. Mechenisation of crop irrigation, fertilisation, temperature control, cut flower grading and other production tasks is occuring in a maJority of operations. Remodeling and reconstruction of physical plants to make more efficient use of light, heat and labor is occurring. Application of new technology is making for more precise production schedules and elimination of labor-consuming production tasks. And, expansion of greenhouse production facilities to take advantage of the economies of scale is increasingly apparent. The impact of rising costs of production inputs in face of relativeb' slower increases in market returns is intensified for northern growers by virtue of their location in heavily industrial and urban areas. Increases in real estate and school taxes, and in other property costs , are considerable in such areas. Concurrently, the surge of national interest in environmental protection requires the manager to decide between investment in noise , smoke and other nuisance abatement measures and such maJor alternatives as relocation or withdrntal from business . has V01 13 ’L‘f As an agricultural production industry, comercial floriculture has been generally exempt from much of the basic labor legislation of this country. For the same reason, it has been relatively untouched by unionization. Consequently, during these times when the industrial worker has received considerable legislated and union-negotiated improvements in his compensation in terms of wages, fringe benefits and working conditions, floriculture has not, until very recently, had the same legal and union-engendered compulsions to offer similar improvements to its employees. Consequently, the. industry finds it increasingly difficult to recruit and retain a quality employee force in the highly industrialized northern metrOpolitan areas. Complicating this current dilemma is the fact that northern growers' physical production facilities are often 50 to 75 years old. Facing increased costs of production, and increasingly severe competition in the labor market as well as in the flower market, the northern producer must examine ways in which he may improve his competitive position. Expansion or contraction, modernization or greater investment in a more effective work force - these are his dilems. ApprOpriate responses in any of the areas have potential for improving his competitive position. Individually and in combination, all offer feasible bases for managers to begin to solve the problems and pursue the opportunities inherent in the present industry situation. Among these opportunities is the emerging potential for market expansion through flowers and plants in smaller sizes and quantities for daily home and business use. Development of new crOps and of new production schedules for traditional ones is needed. Innovative 10 packaging to serve the needs of mass outlet sales is overdue. Review and reorganization of the grower-wholesaler-retailer relationship may yield opportunities for effective vertical as well as horizontal integration of the present trifunctional industry distribution system. Greater coordination of production and marketing could result. In this matter, already one sees the develOpment of plant shOps in areas Of high customer traffic offering little or no service, retail florists specializing primarily in one or nore selected services, the return Of strong combination production-retail operations, and the addition to retail florist shOps of greenhouses for displaying plants. But perhaps more than any other, the application of modern management practices to the Operation of northern production firms represents an opportunity with great potential for aiding in the successful adjustment to the business environment. New methoé of management planning and decision-making or Operations research tech- niques are ideally suited to the study of the complex production input-output relationships and the numerous alternatives for resource use. Review of the Literature and Previous Research There is a dearth of information available on floricultural production economics and management decision-making. Lacking is the basic data which other agricultural commodities have gleaned from long-term farm cost-account studies done by the United States Department of Agriculture and land grant colleges. Possum (9) delineates the reasons for the lack of these data. 11 There are no data available concerning the relationships between resource use and production. These data represent the basis fer the develOpment of production functions, "the tools by means of which the prOblems of production or resource use can be analyzed" (19). Kearl (23) points out that with such data, producers would be able to snap lyze efficiency Of production as measured in input-output relation- ships and in dollar costs and returns. He indicates that they could also measure the progress of their operation as well as compare their firmis Operations with those of competitors. He cites these data as necessary basis fOr develOpment of standards Of reference useful in industry research and education programs. Some cost-Ofbproduction data began to emerge in the post- WOrld War II period as the industry began to sense the need for better understanding of resource use in an increasingly competitive market. The primary source was records infOrmation presented by managers usually at university florist short courses or in the trade press. P.A. Washburn (35), a flower producer in Bloomington, Illinois, was among the first to describe his rather complete system of records which yielded data on the costs and returns fer each of his crops. His figures became the basis for numerous grower discussions during the 1950's and provided growers with guidelines for considering and comparing data from their own records. The 1960's saw the emergence of several fOrmal approaches to the study of resource use in flower crop production. Besemer and Holley (5) in 1965 and 1966 conducted a.study of wholesale carnation growers in the seven major producing regions of the united States. They were able to determine the percent Of total production costs accounted far by nor the ct rem: r41; ‘1‘“ “St are} «a 12 for by 10‘ major categories of production inputs . They found that the major input categories followed a fairly consistent relationship one to the other when expressed as percentages. Labor and management costs represented 55-601 of total costs for all areas except Massachusetts, where it was hO-hSZ. Fuel costs were 7.3-10.7% of total costs with the exception of California where fuel accounted for 3.0-3.61. Plants and supplies represented the next major categories with utilities, taxes, interest and insurance registering as relativelyminor cost categories. Besemer and Holley (5) stressed the need for carnation producers to recognize that management problems have replaced cultural problems as the factor which determines successful Operation in the modern business environment. They called for managers to keep better records of investments, costs, returns, crop yields, and cultural practices, and to make greater use of these data in constant reappraisal, projection of trends, and in the evaluation of alternative courses Of action. Jarvesco and deer (22), also concerned with carnation produc- tion, studied the productivity Of resources used in greenhouse carnation production in Massachusetts. Their primary purpose was to determine the production function for Massachusetts greenhouse firms specializing in carnation production. A Cobb-Douglas production function was fitted to input data, and was used to estimate the marginal productivities of five input categories: a square foot of greenhouse bench area in a year, a man-month Of labor, one dollar spent on soil additions, one dollar of general Operating expenses, one dollar of capital costs. The authors' most significant Observation gleaned from their study was that on an 13 average, Massachusetts carnation growers over-used labor and used too little capital to achieve Optimum economic results. They suggested that net returns from resource use could be improved by adjustments which increase capital inputs , particularly those which reduce labor requirements and increase carnation flower yields. With the objective of obtaining descriptive and financial information for a group of New York State flower production Operations, Goodrich (1h) collected and analyzed appropriate cost and returns in 16 such operations for the 12 months at 1965. He identified from the data certain relationships between costs and returns and such other factors as crop enterprises, and the size and location of the production firm. He provided a dollar as well as a percentage break-down of production and marketing expenses for the major input categories. In a similar study, Fisher (8) determined production costs and returns for 10 Ontario, Canada, flower producers for the period July 1, 1968 to June 30. 1969. He categorized inputs in essentially the same manner as Goodrich and provided dollar and percentage data for each. While the 1960's saw the beginning Of research into costs and returns in commercial floriculture, such studies have tended to be descriptive and general in nature. Still needed is the design of a system for annual collection of representative cost and return data which can provide a basis for the continuing analysis of such data, and develOpment from it of standards of reference for use by flori- culture managers. The need for the on-going assembly of these data becomes even more emphatic when one views the develOpments in the field of opera— tions research and management decision-making during the last quarter century. One such development, linear programming, is one of the more 1’: important optimization techniques which has emerged (29). Spmmed by World War II as a method for decision-making concerning optimum use of the Allies' limited transportation facilities, and for allocating the scarce resources available for the production of war goods, the technique was sophisticated in the post-war period and applied in industry, business and research (21). A fuller definition and description of linear programming as an Operations analysis tech- nique is provided in Chapter II. Ready (20), in 1951:, was the first to apply linear programing in the field of farm management and agricultural economics. Barker (3) reviewed the application of linear programming to the solution of problems Of individual farm managers through 1961;. He stated that while "almost every college department of agricultural economics in the country has at least one member trained in this technique (3)", the results of their linear programing studies had reached extension channels only indirectly; But, he fOresaw the application of linear programing as a management consultation tool by extension staff as being on the threshold of considerable expansion. In the late 1960's and early 1970's this expansion did indeed occur. Todw, linear programing service is Offered to farm managers by Cooperative Extension in a number of states. These programs are designed to provide aid in management decision-making where a number Of alternatives and production factors must be considered and where the complexity of the problems is considerable . The Pennsylvania State University Cooperative Extension Service (38) , in their leaflet describing the linear programing service they Offer farmers, cites 15 the following uses by the farm manager for the technique: "profit maximizing, cost minimizing, problems Of organization, questions of labor profits, determining a least-cost (animal feed) ration, problem of additional capital, land addition considerations, other management decisions." In 197%, the Michigan State University Teleplan System, utilizing linear programing as well as other Operations research techniques, was used by Michigan and out-Of-state extension and teaching personnel to do nearly 116,000 agribusiness and farm business analyses. The same system was utilized for only about 2,h00 analyses in 1970 (17). Linear programing has been more extensively applied in general agriculture than it has in comercial floriculture management. While Pennsylvania's COOperative Extension Service specifically cites the develOpment Of maximum profit plans for greenhouse managers as a very appropriate use of the technique, there has been little use made of it by the industry in the 10 years the program has been offered (’51). EurOpean researchers and extension workers have given some attention to the use of linear programing in Operational analysis of greenhouse businesses but their major emphasis has been on glasshouse vegetable production. . Darling (7) studied the apprOpriateness of applying linear programing to various aspects of planning greenhouse vegetable production in Britain. Specifically, he demonstrated the use of linear programing to determine the most profitable combination of individual glasshouse vegetable crOps and crap sequences. He also included cut chrysamemums as a crop alternative. The constraints were area of glasshouse productioq area incorporating various heating regimes, and 16 hours of available labor. He also applied the technique to the prOblem of planning fOr investment in new greenhouse construction, and more specifically, in the types of construction used, e.g. mobile, cold temperature regimes, heated regimes. Dorling (7) also identified the prOblam of reconciling the green- house production area for a given crOp enterprise which the Optimum solution calls fer with the constructional and temperature limitations imposed in the realaworld situation. He noted that a greenhouse range is composed of a series Of structures of various sizes. Variable tempe— rature and other cultural requirements of the different crops may make it impossible to produce them in the same house. Dorling (7) presented a.budgeting method which provides for revision of the Optimum plan generated by linear programming to confo m with the limitations imposed by the physical plant and.yet which minimizes the loss of profit as a result Of deviation from the Optimal solution. Meijaard (28) applied linear programming techniques to the study of a series of management decisions concerning alternative crOpping pat- terns, labor resource availability and the expansion of glasshouse holdings in the Netherlands glasshouse vegetable industry. His initial matrix included Sh activities and 82 restrictions. The activities included 16 tomato crOps, 1h lettuce crops and provisions for the availability Of casual labor during different periods. The author described the Optimal solutions for the prOblem but refrained from detailed discussion of them‘because his purpose was to illustrate the application Of linear programming as a method of research on certain management aspects of glasshouse vegetable production. 17 Lloyd and Perkins (27) used linear programing to analyze varying resource combinations to determine profitable greenhouse crOpping plans under British production conditions. They stated: Glasshouse production is perhaps better suited to analysis by sOphisticated management technique than are other types of agriculture, for, with the possible exception of the amount of light received by crops, the glasshouse Operator has a high degree of control over the physical environment in which his crops are produced. The performance of crops under glass is therefore more predictable from season to season and given a reasonable level of technical competence crOp yields exhibit less variability than in other spheres Of agriculture. Hales (15) described the use of linear programing in horticultural advisory work in Great Britain. He cited an increasing interest in and application of the technique among horticultural advisory workers and concludes: factors which have made this possible are: an increasing number of advisers in the National Agricultural Advisory Service (NAAS) have been trained in its use, some manage- ment consultants are basing their advice on LP, and more grower/managers are entering the industry with management training. Interaction between these factors is bound to promote an awareness Of its value, added to which, LP has an undeniable attraction to a generation to whom the com- puter is booming familiar. Hales (15) considered linear programming'to be of particular value in horticultural crOp production management because of the very nature of many horticultural businesses; namely the large number of enterprises, double cropping and the resulting complex labour and marketing organi- zation". He pointed out that linear matrices for horticultural firms are generally somewhat simpler than for their agricultural counterparts citing the existence Of fewer enterprise complexities than are present in animal-oriented enterprises. He granted, however, that matrices for horticultural firms are generally much larger than for other agricultural 18 firms. He attributed this greater size to the variations in planting and harvesting dates (15). While Hales (15) work appears to have been primarily with vegetap ble products both in the Open and in glasshouses, he cited one programp ndng effort in which he worked with the carnation enterprise: Profit maximization from an apparent mono-crOp such as the carnation also lends itself to LP where there is a choice of planting times, variable length of crOpping period, and several glasshouses. While stating that he has worked with a chrysanthemum.production prOblem, Hales (15) grimly concluded that "in spite of much thought and effort, (it) remains unsolved, and at the present it is not certain whether the prOblem is capable of solution by LP". In the United States, there has‘been relatively little applica- tion Of linear programing to floriculture production management. Few greenhouse Operators hare ayailed themselves of the university-offered programs because they do not have the record data inputs required. The bedding plant crop is the main one studied with the Pennsylvania State University's program to date. This work has been mainly with vegetable growers who grow a crop of bedding plants in their vegetable plant-growing structures each spring. Some work is underway with geraniums and budget data.haye been collected fer carnations (2h). Stevens (36) at the university Of Maryland has developed an economic model fer flower production fer use in his extension teaching programs. However, while he has developed activity budgets for a number Of flower crOps using general cost and return data, he has not applied linear programming to the analysis of crop alternatives. l9 Extensive review of the literature identifies only one published work which applies linear programming to commercial greenhouse flori- culture under united States conditions. Vaut, Christenson, Slane and Smiarowski (33) simulated a small (10,000 ft2 of production area and 90 hours per week of unpaid family labor), family-Operated, diversified retailawholesale flower production operation. Using data for process budgets collected.by Cooperative Extension agents in Massachusetts, they applied linear programming to analyze a number of floriculture crOp enterprise alternatives as a basis for certain production management decisions. CHAPTERII THE LINEAR PROGRAMMING MODEL Background The background of linear programing as an operations research tool is reviewed in Chapter I. Hazell (l8) relates the technique to agricultural management when he states: "linear programing is widely recognized today as a method of determining a profit maximizing combi- nation Of farm enterprises that is feasible with respect to linear fixed farm constraints". Heady and Candler (21) describe linear programing as a procedure which provides normative answers to problems so formulated. By normative we refer to the course of action which ought to be taken by an individual business unit, area, or other economic sector when (a) the end or Objective takes a particular form and (b) the conditions and restraints surrounding the action or choice are of a particular form. Hence, a problem may be defined in terms of the end or objective of profit maximization by an individual famer. A linear programing model is a conceptual and mathematical account of the phenomena involved in the problem under study. Heady and Candler (21) provide this definition: A model is a functional accomt of relationships between relevant variables which will be given cardinal values in the empirical phase of the stuthr. It is an abstraction, describing and duplicating the situation under investigation. It is used to isolate those parts of a problem or situation most important for analysis or solution. Perhaps as much as any other tool, linear programing forces the investigator to set down a systematic model. He does so as he defines resource restrictions, production possibility equations, profit functions, etc. A simplex table involves a fairly systematic model. However, it is not so much the 20 21 ability to formulate these relationships in algebraic or tabular fashion which makes linear programming successful; it more nearly is the ability to represent real world Opportunities as restrictions and Obtain accurate data to feed into the model. It is essential that the linear programming model employed in a study be as consistent as possible with the actualities of the situation under study. Heady and Candler (21) indicate that a model is consistent with the real situation when the technical coefficients, commodity prices and physical or other constraints are realistic to the problem. They further emphasize the point: "Consistency with the real world can be attained only with sufficient acquaintance and experience with the agricultural or marketing sectors to be analyzed (21)." Such analyses are ideally suited to the joint efforts of the commodity technologist and the agricultural economist. Hazell (18) provides a generalized mathematical statement of the linear programming model applied to production management problems of agricultural firms: For a given farm situation the linear programming model requires specification of: a) The feasible farm activities, their unit of measure- ment, resource requirements and specific constraints. b) The fixed resource constraints. c) The forecasted activity returns net of variable costs, hearafter called gross margins. The linear programming model can then be formulated in primal form as: (2.1) Maximize E f x 3:1 J .1 (2.2) such that :1 auxJ _<_bi (i=1, ..., m) (2.3) and xJ _>_ o , {J=l. ..., n) where, xJ ethe level of the jt'h activity, (j=l,... ,n); fJ sthe forecasted gross margin of the jth activity, _:nduct :se of (me: :erlst lamb ‘s 22 (j=l,...,n); a j .the quantity of the ith resource (or activity constraint) required by one unit of the jth activity, (i=l,...,m; j=l,...,n); b1 '1. the ith resource or activity constraint level, (i=1,e e e ,m)s Application of linear programming to the study of floricultural production management is essentially the same in all respects as the use of the technique in agricultural management. The commercial flower producer's production management concerns possess the charac- teristic and necessary components fOr the linear programming analysis, namely: 1. The desire on the part of the manager to maximize something, generally profit, 2. The existence of constraints in terms of fixed amounts of resources available fOr his use, 3. Existence Of numerous alternatives for the use of these limited resources . Assmtions Inherent in Linear Programming The use of the linear programing model for analysis of produc- tion management situations must be consistent with the assumptions which underlie the technique (13, 21, 18). Maximization or Minimization The maximization of profit, or predicted total gross returns, is assumed to be an appropriate basis for decision-making, as is minimiza- tion of costs of inputs and other resources. and tt fixed in: he I deci tie: be 23 Divisibility The assumption is that the production input factors can be used, and the resultant output of commodities can be produced, in quantities which are fractional units. Fixedness It is assumed that one or more of the factors of production are fixed in quantity available for use in the production process for the planning period involved. In other words, there is always at least one constraint which must be considered in making the management decision. Finiteness A limit is assumed to exist to the number Of alternative activi- ties and resource constraints of the situation. Certainty It is assumed that resource supplies, input-output coefficients, and commodity prices are known with certainty; That is, all f , ‘ij and b1 coefficients, (i-l,...,m.; j-l,...,n), in the linear programming model are assumed to be known constants. Homogeneity All units of resources and of commodity output are assumed to be identical. V's. \ 1‘ n I“‘- 2h Additivity and Linearity The assumption is that the total amount of resources used and the total product output of several enterprises must be equal to the sum of the resources used and the product yield of each individual enterprise. That is, it is assumed that no interaction between the several enterprises in the amount of resources required per unit of activity are assumed to be constant at all levels of employment of the activ ity. While the assumptions underlying linear programing may seem highly restrictive, many of these assumptions may be relaxed suffi- ciently to allow their application to the realities of the actual floriculture enterprises and constraints (13, 18). Hazell (l8) sulmnarizes the many ingenious methods devised to increase the flexi- bility Of the basic linear programing model. Advantages and Disadvantages of Linear Programing Linear programing was selected as the technique for use in the project because Of its capability tO compare the relative proba- bility of large numbers of production activities within the framework of limited resources and other production constraints. The comercial flower producer has available not only a staggering number of crop enterprises from which to develOp his production schedules, but he also has numerous Options internal to each crOp enterprise. Some of these Options are: l. The choice of market target date for production of the crOp, 2. Selection of cultivars from among a wide range of colors, flower types, growth habit, and other characteristics. for use in production programs , 25 3. For potted crOps, selection from a wide range of pot sizes, which in turn influence resource inputs used and the type of product yielded, 1:. For cut flowers, a decision as to whether to grow the single-stemed or pinched, thereby determining spacing and affecting final comodity grade potential, 5. For potted crOps, selection from among a number of production regimes each with different space, labor and other resource inputs and each yielding a different form of the product with varying acceptability in the usual market channels, 6. For bedding plants, container size, number of plants per container, and related factors. Linear programming has additional advantages over conventional farm management budgeting techniques. In addition to providing an Opti- mal production plan for the owner/manager, the solution also yields for each of the scarce resources or constraints in the problem situation, the cost in terms of increase or decrease in gross margin of the opti- mal solution caused by an increase or decrease of one unit of the scarce resource available for input purposes. Shadow prices, as these values are termed by the economist, are Of use to the manager because they indicate possible gains in return to be derived from acquisition Of additional units of constraining resources (214). For activities which do not come into the Optimal production plan, information is obtained on the cost to the owner/manager in terms of reduction in gross margins, and hence profit, for forcing into the solution one or more units of 26 an activity which did not come into solution, at the expense of some number Of units of an activity which did come into the Optimal solution (21). These values are termed opportunity costs. Some disadvantages are inherent in the linear programming tech- nique. Perhaps the greatest is the requirement for extensive amounts Of detailed production management data. Needed are technical coeffi- cients for all activities, prices Of commodities marketed and quantities of limiting resources. Managers Of agricultural firms often do not record infOrmation in this detail. Consequently, the programmer must Often resort to intensive and prolonged interview procedures to generate the essential data. Hazell (18) cites an additional disadvantage of linear programming especially when used in direct management consultation work with produ- cers: Linear programming models must generally be solved on computer facilities fer prOblems Of sufficient complexity to justify use Of the technique. This may limit its application in some parts Of the world, but may also tend to create a communication gap between the farmer and programmer. A farmer may place considerable confi- dence in a farm plan derived with his participation by intuitive procedures, but may have little faith in a plan produced by some backstage and omniscient computer. However, Hales (15) describes in detail an effective technique used by the British National Agricultural Advisory Service both in communicating with producers concerning the possibilities linear programming may hold for their firms as well as in interpreting solutions to managers during consultation sessions. Finally, a possible disadvantage is that the assumptions fundap mental to linear programming are not always easily handled in the 27 analysis of certain agricultural situations. Hazell (18) reviews methods of increasing the flexibility of the basic model. General Procedure The first procedural phase was to identify representative production firms for the purpose of obtaining cost and return date and estimates of coefficients fer the inputs of greenhouse production area and labor fer the nine crOps and their respective Options. The mana- gers of these firms also were queried to determine whether they had production and business records adequate to provide the basic data required, and whether they could accurately estimate necessary data not available in their records. A series of firms'was identified through discussion with floriculture faculty and COOperative Extension agents of Michigan State University. Each Of the firms identified ‘was visited and the manager interviewed to determine whether the firm qualified for inclusion in the study. Primary criteria fer qualifi- cation follow. The firm is a full-time commercial production Operation with the capability of engaging in the growing of the nine crap enterprises and their internal production and.marketing Options. The firm realizes a gross annual income from flower crOp production of at least $100,000 (wholesale value of crOps sold), thus qualifying as a commercial Opera- tion. The firmfs business objective is basically that of‘maximization of profit, and the operation is not primarily oriented to or influenced by other objectives, e.g. family-oriented goals, real estate apprecia- tion and speculation. The firm employs a level of technology in production and marketing 28 which reflects the application Of the maJority Of practices current in the industry and/or recommended or endorsed by the COOperative Extension Service of its' state fer operations Of the same general type and size. The firm is located in the northern united States at, or generally near, h2 degrees 30 minutes north latitude, a geographical area‘which includes Grand Rapids, Kalamazoo, Lansing and the Detroit metropolitan area. In actuality, this belt contains the maaority Of commercial flower crop production firms in Michigan. Production and marketing conditions in this area.may be considered typical Of those Of’the northern United States. Based on the interviews, 1h Michigan firms were selected fOr study. One firm in New York State and one firm in Pennsylvania also were selected to provide additional data for snapdragons and carna- tions when it was determined that it was not possible to obtain sufficient data on these crops from the Michigan producers. Data were then collected in the following categories from the 16 producers: 1. The manager's description Of his Objective fOr his business and his general philosophy and approach to their achievement, Costs and returns fOr production and.marketing Of the crOps they produced, Greenhouse production space coefficients fOr crOps produced, Tasks involved in the production Of crOps grown and labor coefficients fer each Of the tasks. Detailed production cost and return records beyond those required o1 29. for income tax and other legal accounting pruposes were not available from.most Of the managers. This is generally true in the floriculture industry. Consequently, interviews in depth were necessary to Obtain data in sufficient detail fOr project purposes. The second phase in the procedure was to use these data to build a linear programming research model fOr use in pursuing the Objective of the study. The data collected were used to compute estimates of labor and greenhouse space coefficients for the nine crOp. enterprises and their internal Options. The Model The linear programming model is essentially an abstraction which describes and reflects the real situation under study. Accordingly, the model develOped fOr this study is assumed to have the characteris- tics of commercial status, level of Operation and geographic location delimited earlier in this chapter fer the representative firms from which data were drawn. Other characteristics Of the model as develOped from study of the representative firms follow. Production and Marketing Cycle The cycle is established as a 52aweek year. The 12 months of the year were each assigned a.number Of weeks as shown in Table 1. Easter Sunday, a.major holiday for the flower producer, is a variable holiday and.may range from the last Sunday in March to the secondplast Sunday Of April. For purposes Of this study, Easter Sunday is assumed 30 to be fixed on the second Sundw Of April. Table 1. Weeks assigned to each calendar month in the model. Month Number Of weeks January February March April May June July August a-rma'xnwvu September arm October November U'I December I. Characteristics Of the Owner/manager The owner/manager of the model firm is assumed tO keep abreast Of new develOpments and to apply innovations within a reasonably short period after they are recommended. He is considered sufficiently competent in managerial technoloy and skill to be able to efficiently manage an Operation Of this size and complexity. 31 Mechanization The model firm is assumed to have at least the operations listed below mechanized. In industry, production Operations Of this size are generally mechanized to this extent. 1. 2. 3. h. 5. Thermostically controlled heat and ventilation, Automatic watering controls , Fertilization of crOps done mechanically at each watering with prOportioners, Systemic insecticides and fungicidal soil drenches applied through the automatic watering system, or in 81'8““131' form, Bench soils steam-sterilized following each crOp, Potting operations set up and operated in assembly-line fashion with conveyor track and fork-lift equipment used to the extent possible, Fork-lift trucks and front-end loading tractor equipment used to handle all materials possible, Transfer of potted crops and bedding plants from greenhouse to loading area achieved with roller conveyors, carts and fork-lift trucks tO the extent possible. Greenhouse Heating The greenhouse plant is assmned to be heated by a central boiler plant fully maintained for maximum efficiency. The fuel is natural gas. Market A market is assured to exist for all Of the crOp enterprises and internal Options available to the manager except in those enterprises 32 and options for which market quotas have been imposed in the program. These quotas are specified later in this chapter. Point Of Sale and Delivery Practices It is assumed that no delivery service is provided by the model firm; retail merchants pick up potted crops and bedding plants at the greenhouse, and that cut flowers are either picked up at the greenhouse by the retail merchant or are shipped to the wholesale florist by common carrier. This simplifying assulnption is necessary in that both sales and delivery methods vary so greatly that it would be unrealistic tO designate a 'typical' method. Delivery techniques found in use are: 1. Retail merchant picks up potted and cut crops and bedding plants at the greenhouse, 2. Wholesale florist picks up cut flowers at the greenhouse, 3. Growers deliver potted plants , cut flowers and bedding plants tO retail merchants, h. Growers deliver crOps to wholesale florists, 5. Growers Operate truck route selling his crOps to retailers, 6. Truck, bus, air shipment Of crOps to retailers and wholesalers, 7. Others. Enterprises and Internal Options Nine crOp enterprises and numerous internal Options in terms Of production technique, final form Of comodity produced, and marketing alternatives, are available to the manager. The crop enterprises are: 1. Cut flower crop enterprises a. ) Carnations 33 b.) Chrysanthemums (standard) c.) Roses d.) Snapdragons (single-stem) 2. Potted crOp enterprises a.) Chrysanthemums b.) Easter Lilies c.) Poinsettias d.) Geraniums 3. Bedding Plants. The production options internal to each crop are described in detail in Chapter III in the discussion Of the Optimal solutions for the monocrops and the various multicrop programs. The Objective Function Of’the MOdel The model is designed to produce a glObal Optimum solution which maximizes the Objective function, i.e. the gross margin net of crop-spe- cific variable costs, within the constraints of fixed greenhouse produc- tion area and fixed permanent employee complement, and within the alter- native activities fOr the use of these fixed resources Offered by the nine crOp enterprises and their internal production and.marketing Options. The Objective function represents gross market returns in dollars less the cost of crOp-specific variables used in the production and.marketing Of'the crop. It is the return to the fixed resources Of greenhouse production area and permanent employee fOrce in terms of gross margin in dollars after crop-specific variable costs are deducted. The cost of fixed resources (overhead costs to provide a square foot Of production area per week and the cost Of the permanent labor force per 31. hour) are deducted from.the gross profit to determine net profit. The manager's labor contribution and time spent in doing management tasks is included in the 600 hours per week of permanent employee complement in the amount of 60 hours per week. Residual profit then is the net profit which remains after all costs, i.e. crOp specific variable costs and fixed costs, are deducted. It is return to fixed resources, and may be considered income which the owner/manager receives beyond his salary compensation fer his management skill. Net profit also includes returns to capital investment in the firm, The Constraints in the MOdel The constraints have been identified as greenhouse crOp production area and permanent employee complement. Specification of these fixed production resources follows. Greenhouse Crop Production Area The model has 107,000 square feet of area under the cover of glass greenhouses. The greenhouses are Of’modarn aluminum frame construction with wide-span glass. The structures are fully maintained. Production areas within the greenhouses are assumed to be laid out efficiently so that m or the area under glass, or 75,000 tea, is available for crOp production activity. It is generally assumed in the floriculture indus- try that 65 to 10$ of the area covered by glass converts to useable production area if careful attention is given tO bench layout. The remainder is devoted to walks and work areas. 35 Storages are a usual component of the flower grower's facility. They are essential for pre-marketing post-harvest treatments of cut flowers as well as for bulb, seed, cutting and plant storage. Such an ancillary facility is provided in the 125,000 n2 of temperature. controlled storage area in the model firm. Among the crap enterprises, storage facilities are required only by certain Options Of the Easter lily crop. SO as not tO have available storage space impose an unde- sirable constraint on these lily Options the amount of storage area in the model is that required to allow the entire greenhouse produc- tion area to be programmed to Easter lilies should such be an Optimum solution. Storage facilities typically are shelved to provide maximum use of space. Therefore, storage area square footage does not equal floor area. Permanent Employee Component A total permanent labor resource Of 600 hours per week is avai— lable in the model and may be characterized as follows: 1. An owner/manager who contributes 60 hours per week including his time devoted to management as well as that considered to be production, marketing and other non-management tasks, 2. Eleven permanent employees who each work 1&8 hours per week for an available total Of 528 hours per week, 3. The owner/manager's wife and family at 12 hours per week total. The permanent employees are assumed to be skilled and trained in the performance of the majority Of production tasks essential to 36 the programing of the nine crOp enterprises and their Options. Permanent employees are considered to be sufficiently skilled and trained to do all Of the production activities studied. Market Quotas Another set of constraints was applied in the form Of market quotas for some enterprises and Options. Market quotas are specified later in this chapter. These constraints conform to the actual limitations imposed by the market situation, particularly at holidays, under industry conditions . The Estimates of Values for Constraints , Prices Of ER!“ antLOutputs, and Coefficients A researcher utilizing a linear programing model tO study t cal production firms usually Obtains his estimates Of input and output prices, constraints and technical coefficients from a tradi- tional set Of data sources including census reports and cost Of production and other studies done by governmental agencies and land- grant universities. He supplements these resources with discussion and interviews with producers , extension workers and commodity produc- tion and marketing specialists. But a researcher finds a dearth Of census and costs-and-returns data for comercial floriculture as a result of the traditional lack of attention to such studies in this commodity by the usual agencies. This problem was discussed in depth in Chapter 1. Furthermore, records kept by flower producers are the minimum necessary for tax and legal purposes. 37 Consequently, most Of the estimates for the various factors required for the linear programing model used in this study are derived from interviews with managers and key employees. However, some coeffi- cients were derived from the few recent floriculture cost-Of-production studies which have been done (110(8). Detailed producer records where available also provide additional information. Data from all sources are further tailored on the basis of the researcher's experience and Observations as an extension adviser tO floriculture industry managers for more than 15 years. Determination Of levels Of Constraints Greenhouse production area (75 .000 ftz) and its ancillary tempe- rature-controlled plant storage (125,000 ftz) and permanent employee conplement (600 hours per week) are the fixed resources considered tO constrain production in the model. The model's greenhouse area under glass and production area are derived from data collected from the firms in the study. Area under glass ranges from 25,000 to 300,000 ft2, and production area from 23,000 to 20h,000 ftz. See Table 2. The mean area covered by glass 2 and plastic for the 1‘: Michigan firms is 95,570 ft , and for all 16 firm, 92,570ft2. The mean production area per operation for the Michigan producers is 70.1.30 ha, and for all 16 firms, 67,000 fta. The values of 107,000 n2 under glass, and 75,000 ft2 production area assigned the model are considered representative of the firms studied. Approximately 725 efficiency in conversion Of area under glass to crOp production area is reflected here. An Operation of this size is .6 .JJ .moflpneaommw mUAOOOH opmamfioo o>mn hoop Omsmoop no modem can ow whosoaw amopo 80am Odomaflw>m won one mono moan: mom chHpoo mono oosooam hoop Omsmoon hawamsflao empomamm was home .mmmaua pmmaoaom mw woa Sham one .msawm mmnpo map can» Andaman hanmmoowmooo mw de spam .I \r mm.me oo.em ma.mm m manna HH< m.ow me a» m or or ooa :ma mm mm m: are oumpmumoupso m:.me me.oe oo.em m o» am mm mma mm m: me mad no em ow oaa or an no god mm am me one mm mm \mMm mma om ea oaa med 0» mm me oea a» or me ema mm m: mm wma mm mm ooa «ma Hm oma Hod mam we sow \mdom woe 2m oaa med moa eemaroaz may some Gprosooam Op macaw moons comm mo oonao>coo Amen ooo.av moan newpodooam “New ooo.av madam some: moa< nonasz swam .oema .mahae eeeemueoueso m was arrange: ea eon coerced use macaw amen: eeh< .m canes 39 considered to be fully commercial in character because it will generally be beyond the scOpe of a simple family business thus insuring that the firm's Objectives are profit oriented. The rationale for the assignment of 125,000 ft2 Of temperature- controlled storage area to the model firm is described earlier in this chapter. The availability Of this much storage area could be considered unrealistic when one considers that the facility would be used only fOr purposes of producing certain Easter lily crOp Options, the storage of plants, cuttings, bulbs and seeds prior to planting, and the pre-market- ing treatment of cut flowers and certain potted crOps. However, in a real industry situation, a producer would likely grow crops other than lilies which would require storage facilities, e.g. bulb crOps, azaleas, hydrangeas. These crops are not included in the alternative enterprises available in the model simply because Of the need to keep the number Of enunprises manageable within the scOpe and purposes of the study. Levels for the permanent complement constraint are defined earlier in this chapter and established on the basis of data Obtained from producers interviewed. The average number Of permanent employees per 1,000 ft2 Of area under cover fOr 13 Of’the firms is .095 with a range Of .037 to .187. See Table 3. The model firm is considered to have 107,000 ft2 Of area under glass and on the basis Of the firms surveyed.would typically employ 9.88 employees including managerial staff. A total of one manager and 11 permanent employees are assigned the model. The number is increased by two employees because managers interviewed had considerable difficulty specifying the amount Of mana- gerial time, unpaid family labor, and part-time labor utilized during MO moo. arc. ONO. P H Heo. m moo. owa. emo. who. omo. owo. Hmo. ONH. moo. omo. meo. Fwd. OxmmxoongzmMN HQ] 00 manta Hoe .ere: mauam mummeMOIpdo .odmz N N N ooa :ma N H N: mma "maawh mpnpmlmonpdo msnfim acmfinowz .oowz m N mm NmH N a om ONH : H mm :ma H m m: and N mN de m m a oaa mad e m we oea : N Nm mNH m m ooa NNH ma m m oom woa Ha m N mwa NOH "mahaa chanson: Nee coca eeo fleece eeaaaame: omaawxm Haemw>ammdm pomaowmmmz ANpm oooav madam, mopssz Sham momhoamsm momNOdmam mo ampadz mound mead .omwoopm maawh no panamamaoo omhoaaam yo mowpwmomaoo .m canoe hl the year. While all interviewees made estimates, they were perhaps least sure of their figures in these areas. Managerial time beyond 60 hours per week is not accounted for in the model. There is consi- derable indication on the part of managers that they devote more time than this to their Operations. Further, there are indications that wives and children contri- bute considerable amounts Of unpaid labor to the Operation. In some cases, younger children are paid an allowance fOr doing chores in the greenhouse. Similarly there are indications that part-time labor may have been understated by managers. With these observations, it is considered that a 12-man permanent complement including the manager may provide a more realistic estimate Of the usual permanent labor complement available to the manager of a range the size used in the model. It must be noted also that the permanent labor complement should vary among the businesses studied on the basis Of: 1. CrOp enterprises in the annual production rotation, i.e., certain enterprises require less labor on a day-to-day basis than others, but may have periodic peaks of labor requirement, e.g. bedding plants, holiday-oriented crOps. 2. The specific cultural practices used to produce crOps, e.g. one participant manager waters all crops automatically with the exception Of poinsettias which he feels must be hand- watered. Other poinsettia producers studied water poinsettias automatically. 3. The efficiency Of layout Of the greenhouse range. Assumptions about the layout of the greenhouses in the model are specified 1:. A2 earlier in the chapter. The model is laid out likely more efficiently than the average firm studied. The managerial approach to organization and implementation Of the use of the labor resource, e.g. several producers organize the potting Of certain crops in an extremely efficient assembly line which minimizes steps and motions. Others give less thought to such organization thereby requiring more employees to accomplish the task. Of course, the level Of mechanization influences substantially the labor complement required. As noted earlier, the green- house operations included in the study are mechanized essen- tially to the extent prescribed fer the model. Some are mechanized.beyond this level thereby reducing the number Of employees required. Pricing Greenhouse Production Area The production area constraint is established in units Of square feet of production area available for cropping per week. The basic pricing unit is the cost to provide one square feat of production area per week. factors: This cost includes the costs Of these fixed, non-crOp-specific 1. Non-capital costs associated with providing the physical greenhouse, heating plant and allied facilities including prOperty taxes, depreciation on buildings and installed equipment, interest on capital, maintenance and repairs, rents paid tO provide facilities, insurance and related costs. 2. 3. 5. 1‘3 Costs associated with providing non-installed equipment including motor vehicles , Office equipment , greenouse equip- ment and non-installed storage equipment, e.g. portable refrigeration equipment. Also included are associated depre- ciation, insurance and interest costs, maintenance and repairs, and fuel for Operation Of the equiment. Cost of natural gas fuel required to maintain greenhouse night and day temperatures at #01" year-round. This portion Of the heating cost is assigned as a part Of the cost Of providing greenhouse production area because greenhouses must be main- tained at this minimum temperature to prevent collapse in periods of snow and ice, and to prevent damage to the heating system 02). Fuel costs to heat the greenhouse from MP to the temperature required for a specific crOp enterprise are assigned to that enterprise in that the temperature requirement varies not only by crOp enterprise but by stage Of production of each crop. The method used to calculate heating requirements and costs is discussed later in this chapter. Cost of utilities including water, sewer, and electricity except in those crOps where artificial lengthening of the m is required for control Of certain photoperiodic responses. In these cases , cost Of electricity for photoperiod control is assigned as a crOp-specific cost to the enterprise requiring it. General administrative and marketing expenses including legal, tax and accounting services , corporate taxes, telephone, admi- nistrative and office supplies, contributions, freight, uh express and postage, advertising and promotion Of a general nature, selling, travel and entertainment, life insurance premiums on the owner/manager's life, and dues and subscrip- tions. To calculate the cost to provide a square foot Of production area, the cost per unit Of greenhouse production area is determined fer the Michigan firms studied in this project. Data from nine Of the firms are used in calculating the mean cost of production. Data from.two of the 12 firms studied are omitted because they Operate less than 12 months per year, and cost data for one firm a‘enot available. Table I: specifices average total costs Of production, costs per square foot of production area, and percentages Of Operating costs. In Table 5, cost Of production data generated by Goodrich in his study Of 16 New York State producers, and Fisher in his study of 10 Ontario, Canada, flower production firms are presented. Cost of production per square foot Of production area as determined in each Of these studies is detailed in Table 7. These data are not directly comparable because of variations in handhng of certain costs. Fisher (8) notes that while $3.61 per ft2 of production area is the average production cost fer all Operations studied, the average cost for producers Of cut flowers only was $3.69 per ft2 Of production area. The average cost fOr producers who grew both cut flowers and potted plants in the same Operation is $3.52 per ft2 of production area. A fixed cost per unit (ft2) of greenhouse production area for use in the model is determined based on data from these three studies. 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Therefore, the total fixed cost per ft2 used in the model is determined by reducing the total fixed cost per ft2 Of production area'by the amount attributable to crOp-specific costs. Components of fixed costs used in this calculation are listed in Table 6. On this basis, the total fixed cost Of providing greenhouse production area in the model is established at $l.h5 per ft2 Of production area per year. Pricing Fixed Cost for Permanent Employee Complement The basis fOr pricing the permanent employee complement as an input are data for calendar year 1970 from 10 floriculture firms in the study. These data are summarized in Table 8. As thus calculated, salary and wage rates used in the model are as specified in Table 9. Table 9. Salary and wage rates used in the model firm. Salary or“' Level of employee Number Hours per week wage rate($) Manager 1 60 $25,000/year Supervisor 2 5h $h.00/h0ur Skilled laborer 7 1.8 $2. 50/hour Semi-skilled laborer 2 1.8 $2.00/hour On these bases, the fixed cost of one hour of salary and wages including benefits is set at $3.31. 51 An Option to hire temporary labor is programmed. It restricts the model to hOO hours per week Of permanent employee complement but gives the manager the option to employ unlimited hours of temporary labor once total pemanent employee hours are fully committed. In this Option, temporary employees may be hired at one Of three hourly wage rates: $2.00, $3.50 or $5 .00. In any given use Of the Option, however, only one Of these wage rates may be used for all temporary hours paid. Estimating CrOp-Specific Variable Costs Crop specific variable costs are those non-fixed expenses associated with production and marketing of a specific crOp enter- prise Or one Of its internal Options. Specific expenses vary from crOp to crop depending on the production process and the final form in which the product is marketed. These variable input costs are included in the estimates: 1. Costs of purchasing stock plants, cuttings, started plants, seeds and bulbs with which to initiate a crop. These costs are determined from 1970 suppliers‘ catalog listings, price quotations in 1970 issues Of trade magazines, and discussions with salesmen and producers. Prices are verified to be within the usual range paid as identified by producer participants in the study. The usual quantity and early-order discounts, as well as appropriate premiums and royalties , are included where apprOpriate. 2. Costs of ingredients for soil mixtures including soil, peat moss, perlite, fertilizers and other soil amendments. The soil mixture used in the model is a mixture of one-third field S2 soil, one-third Canadian sphagnum peat moss and one-third perlite by volume. This mix, with minor variations, is a standard recommendation for the crOps produced in the model (to). Basic amendments Of ground limestone for soil pH adjustment, and Of superphosphate to provide basic phosphorus nutrition are also assumed. The cost of the soil mixture, $12.00 per cubic yard, is determined on the basis of price quotations from.Mdchigan suppliers Of’the ingredients as verified in interviews with project participants. These costs are detailed in Table 10. Table 10. Costs Of ingredients in soil mixture used in model. Ingredient Price per cubic yard (3) Field soil 3.00 Canadian sphagnum peat moss 15.75 Perlite 17.h0 1:1:1 mixture of soil, peat moss, perlite 12.05 In the model, a soil mix charge is applied tO potted crops and bedding plants because the soil is sold with the crop. NO soil charge is assigned tO the crop-specific variable costs fer cut flower crOps because the soil mix remains permanently in the bench and is sterilized between crops. Only periodic addition Of amendments is made and these costs are considered minor enough to be absorbed in the general supplies cost category. 3. 53 Costs for containers in which to produce potted crOps and bedding plants, e.g. clay and peat pots Of various sizes, plastic flats and packs, BR—8 blocks. Prices used for con- tainers Of various types are from suppliers' catalogs and verified in interviews with producers. The usual trade and quantity discounts are considered in assigning container costs to crOp Options. It is assumed that a.manager will purchase his container supplies on an annual basis for all planned crOp production and thereby qualify for quantity discounts. Costs of natural gas fuel to heat the greenhouses from the basic h0F included in the fixed cost Of greenhouse production area to the temperature required fer the crOp enterprise or Option. Heating requirements and costs are calculated using Aldrich's (l) procedure. F . HSHDD)2h E(At)C where: F is the fuel required, H is the estimated heat loss in Btu/hr, HDD is the heating degree days for the time period, E is the efficiency assumed for the boiler, C is the heating value Of the fuel, At is the temperature difference for which the heating unit was designed. 5. M-FxP where: M is the fuel cost, F is the fuel required, P is the price per unit Of fuel. Heating-degree data used in calculations are based on those for Corry, Pennsylvania (32). Aldrich (he) recommends these as sufficiently representative for purposes of the geography Of the model. Natural gas rates used in the heating calcula- tions are those charged by Consumer Power Company, Jackson, Michigan under their "commercial and industrial service con- tract rate C (39)." Interviews with producers indicate that a majority are on this rate. Project participants in western Michigan are in the territory served by Michigan Consolidated Gas Company. Rates Of the two firms are roughly comparable. In calculating the cost to heat production area occupied by a unit Of a crap enterprise or Option, the production area is increased by a factor of one-third. In this way, the cost of heating the 301 non-productive area in the greenhouse is prO- rated across each unit of cm enterprise or Option. Costs of providing photoperiod control equipment, e.g. light fixtures , bulbs , black cloth, and the cost Of providing elec- tricity for photOperiodic lighting purposes. PhotOperiOdic control equipment is used for successive chrysanthemum crOps over a period of years. Accordingly, depreciation schedules are established. A useful life of 10 years is assigned to 55 lighting fixtures and reflectors; a useful life of five years is assigned to black sateen cloth. The cost of these produc- tion inputs is pro-rated on the basis of umber of craps pro- duced per year for each of the years in the depreciation period. A photoperiodic expense factor is then assigned all craps requiring such treatment. Electricity expenses for notoperiod- ic lighting is considered a crop—specific expense for those crops requiring it. 6. Costs of labels and other miscellaneous supplies specific to crop enterprises and options. Identification of each market unit of bedding plants with a label containing a color photo- graph of the cultivar is essential. The cost of labels is included in crap-specific variable costs for this enterprise. Label costs are based on current suppliers' prices and are adjusted for apprOpriate quantity discounts. In all crap-specific variable costs , producers participating in the program indicate that prices used in the model are in general agree- ment with prices paid by them for similar items. Establishing Market Returns for Products Sold The market for florist crops has heavy seasonal and holidw orientations. Perhaps the best examples of seasonally oriented crepe are bedding plants and geraniums. Both are grown primarily for sale during April through June when the consmser is planting his garden and making other outdoor uses of flowering plants. Adverse weather condi- tions during this period can affect total sales. But, specialists in 56 these craps generally cover a wide enough geographical market area to be able to plan production with considerable certainty. Nearly all potted plants and cut flower crops at some time in the production year are timed to serve the consumers' demands for holiday decorations for home and business, and for holiday gifts. Two crops, Easter lilies and poinsettias, are grown almost exclusively for the Easter and Christmas holidays respectively. However, potted chrysan- themums and the major cut flower crops - roses, camations, chrysanthe- mums, snapdragons - are produced on year-round schedules with production peaks timed for the holiday and occasion markets when prices tend higher. Producers of cut flowers generally market their crops through wholesale commission florists and pay a commission of 20-25% for the service. These producers generally do not set the price of their commo- dity but leave it to the judgment of the wholesaler based on market supply and.demand for a given day. However, many producers do work closely with their wholesalers to establish a price range in which sales are to be made. Potted crops on the other hand are generally sold directly by the grower to the retailer. The grower usually sets his price in advance and often issues a price list fer major holidays. Accordingly, he exercises considerably more control over the pricing and sales of these craps. In estimating market returns for specific crOps and internal options, price data from project participants serve as the primary basis. These values are verified by comparison with prices quoted in market reports and price quotations listed in trade paper reports and advertisements. Two 57 assumptions concerning marketing and pricing are made in the model: 1. Prices are assumed tO remain constant throughout the period required tO sell the entire crOp, i.e. the last unit sold of a specific crOp enterprise or option is assmned tO bring the same price as the first and all other units sold. 2. The market is assumed tO have the capacity tO absorb the entire production Of the model with the exception Of crOp enterprises and Options listed in Table 11 for which market quotas are established. These quotas are set on the basis Of discussions with managers who participated in the project. For the longer run, it is assumed that once the manager has the Optimum solution produced by the linear program as a planning guide: 1. As a part Of the change from one production program to the other, the manager will carry out apprOpriate market develOp- ment activities to ensure that the new product mix and quan- tities will be saleable at least at the market price used in the linear program model. 2. If a manager applies the Optimum solution indicated he can change the crOps grown and the production Options and schedules used only over the period Of one or more years, i.e. he will phase out Of his present production programs and into the new prom. Prices used for crOp enterprises and Options are specified in Table 12. S« Bu Se] Sell 58 Table 11. CrOp Options with market quota. Crop and Option Market quota (production units) Bedding plants Potted petunias, Mether's Day 50.00 Potted.marigolds, direct sown, MOther's Day 25.00 Memorial Day 25.00 Potted marigolds, transplanted, mother's Day 25.00 .Memorial Day 25.00 Potted impatiens, Memorial Day 12.00 Potted fibrous-rooted begonias, Memorial Day 12.00 Carnations, controlled holiday cropping Christmas 5.00 Valentine's Day h.00 Easter 5.00 Mother's Day 6.00 Easter lilies Sell started plants, Feb 2, grades: 10/11 3.00 9/10 3.00 8/9 6.00 7/8 3.00 Buy started plants, Feb 2, grades: 10/11 5.00 9/10 5.00 8/9 10.00 7/8 5.00 Sell started plants, Mar 2, grades: 10/11 3.00 9/10 3.00 8/9 6.00 7/8 3.00 Buy started plants, Mar 2, grades: 10/11 5.00 9/10 5.00 8/9 10.00 7/8 5.00 Sell finished plants, Apr 2, grades: 10/11 10.00 9/10 20.00 8/9 h5.oo 7/8 h5.oo 59 Table 11. (Cont'd). CrOp and Option Market quota (production units) Geraniums, loo/l program Sell started 12 inch stock plants, early Mar 1.00 Sell started 12 inch stock plants, mid Mar 2.00 Sell started 5 inch stock plants, mid Mar 1.00 Sell started 5 inch stock plants, late Mar 2.00 Sell started 7 inch stock plants, mid Mar 1.00 Sell started 12 inch stock plants, mid Dec 2.00 Sell started 12 inch stock plants, mid Jan 2.00 Sell started 12 inch stock plants, mid Feb 2.00 Sell finished 12 inch pots, MOther's Day 1.00 Sell started 7 inch stock plants, mid Feb 2.00 Sell started 7 inch stock plants, late Nov 2.00 Sell started 5 inch stock plants, late Feb 2.00 Sell finished h inch stock plants, Easter 2.00 Sell finished h inch stock plants, MOther's Day 12.00 Sell finished h inch stock plants, Garden sales 200.00 Sell finished 5 inch stock plants, Garden sales 200.00 Sell finished 7 inch stock plants, Garden sales 0.50 Sell finished 12 inch stock plants, Garden sales 0.25 12/1 program Sell finished 7 inch plants, Garden sales 0.50 Sell started 7 inch plants, mid Mar 1.00 Sell started 7 inch plants, late Dec 8.00 Sell started 7 inch plants, mid Feb 8.00 Sell finidhes h inch plants, Easter 2.00 Sell finished h inch plants, Mother's Day h.00 Sell finished 7 inch plants, Mother's Day 2.00 Tree program Sell finished geranium trees, Mother's Day 1.00 Sell finished geranium trees, Garden sales 1.00 Sell finished h inch plants, Mother's Day h.00 Poinsettias See figure 30. Potted chrysanthemums Craps which bloom in: - August 6.00 September 6.00 OctOber 6.00 Early November 6 . 00 Thanksgiving 8.00 Late November 5.00 Christmas 2.00 60 Table 11. (Cont'd). CrOp and option Market quota (production units) Potted chrysanthemums (cont'd) Roses December February Valentine's Day Early Mbrch Late March Easter Late April (1) Late April (2) Mother's Day Late May Memorial Day June July Snapdragons 6.00 6.00 6.00 2.00 h.00 15.00 h.00 h.00 25.00 h.OO none 5.00 6.00 none none Table 12. Wholesale market prices assigned crop options in the model. Crop option $/each $/unit Bedding plants: 3 inch pot: petunia, Mother's Day 0.30 300.00/1,000 pots marigold: Mother's Day 0.25 250.00/1,000 pots Memorial Day 0.20 200.00/1,000 pots impatiens, Memorial Day 0.30 300.00/l,000 pots fibrous-rooted begonia, Memorial Day 30.30 300.00/l,000 pots plants in trays, garden sales 2.30 h60.00/200 trays Carnations: standards: Extra fancy 0.18 2 single-pinch program Fancy 0.15 2,050/h00 ft2 multiple-pinch program Standard 0.12 2,250/h00 ft controlled holiday crops: Design 0.06 2 Christmas Miscellaneous 0.30 1,800/h00 ft2 Valentine's Day 1,800/h00 ft2 Mother's Day 1,800/h00 ft2 Easter 1,h50/h00 ft2 miniatures 1.89/bunch 2,800/h00 ft Easter lilies, 6 inch pots: less than 3 buds 1.25 1,250/1,000 pots 3 buds 1.75 1,750/1,000 pots h-S buds 2.25 2,250/1,000 pots 6—7 buds 2.50 2,500/1,000 pots 8-9 buds 2.75 2,750/1,000 pots Geraniums (See Table 28.) Poinsettias (See Table 35.) Potted chrysanthemums, 6 inch pot 2.25 2,250/1,000 pots Roses 2 Hybrid teas 0.27/flower 3,2h0/h00 ft2 Floribundas 0.225/flower 2,700/h00 ft 62 Table 12. (Continued.) Crop Option $/each $/unit Snapdragons, single—stem 2 November-March 1.60/doz 6h0/h00 ft2 April-October 1.32/doz 528/h00 ft2 Christmas, Easter, Mother's Day 1.80/doz 720/h00 ft Standard chrysanthemums pinched crops: 2 July-November h.25/doz 871/h00 ft2 June h.50/doz 810/h00 ft2 December-May 5.00/doz 900/h00 ft2 Holidays 5.50/doz 1,100/h00 ft single-stem crops: 2 July-November b.25/doz 850/h00 ft2 June h.50/doz 810/h00 ft2 December-May 5.00/doz 800/h00 ft2 Holidays 5.50/doz 880/h00 ft 63 Estimates Of Greenhouse Production Area and Labor Coefficients for Crop Enterprises and.0ptions The production program.for the crOp enterprises and their internal Options are selected as enterprise alternatives for use in the model on the basis Of several factors. First, the programs reflect the most :modern approaches recommended by Cooperative Extension and other trade advisory groups on the basis Of availability Of precision technology and equipment for the process. Second, those systems which utilize the latest tested and industry-accepted crOp cultivars are given priority. Finally, only production processes which hare'been adopted by a substantial number Of industry managers are included. All programs are in use by two or more producers in the 16-firm.group from which estimates were drawn. Greenhouse production area coeffi- cients are generally easy fOr interviewees tO specify in that they are familiar with pot sizes, cut crOp and pot spacings, frequency and dates of planting, and spacing adjustments made in potted plants as these crops grow and develop. The standard units Of crops used in the model are: Fer Potted Crops. The production area required by 1,000 pots Of a crOp, regardless Of pot size used, at a given spacing is considered to equal one unit Of greenhouse production area for potted crOp enter- prises Or Options. Production area coefficients are established in multiples Of one week, i.e. a potted crop is assumed to be grown at a given space requirement for a.minimum Of one week and fOr periods of longer duration, in multiples Of the oneaweek time unit. This standard 6h fer determining production space required is selected in that nO other meaningful standard adequately recognizes differences imposed by the use Of various pot sizes and Of different spacings Of pots during specific time components Of the production program.fOr a given crOp. Also, the differences in time components among the various crop enter- prises and Options are adequately treated.by use of this standard. For Cut Flower Craps. A production bench unit 100 feet long and A feet wide or too ft2 per‘week is considered a production unit fer cut flower purposes in the model. As fer potted crops an enterprise or Option is required to occupy the bench space in multiples Of oneaweek time periods. This 800 ft2 unit is selected primarily‘because these dimensions represent typical bench units in cut flower firms. Of course, spacing Of the plants in the bench units varies with the enter- prise Or Option. For Bedding;P1ants. Two hundred standard ll"x22" plastic trays each containing 12 plastic packs per tray and spaced tray-tO-tray are considered a greenhouse production area unit fer this crop enterprise. This unit represents 3&0 ft2 per week and may occupy space only in mul- tiples Of one week. This tray/pack combination is the one typically umed'by Michigan bedding plants producers. Number Of’plants per pack varies by species Of bedding plant; the number again is based on general practice among firms studied. Potted bedding plant Options are speci- fied in the same units used for potted crops in general. Coefficients for permanent employee complement are estimated in units Of manhours per week. The production program for each crOp enter- prise Or Option is analyzed in terms Of major crOp-specific tasks which 65 must be performed. Managers specify or estimate the number Of manhours required in their firm tO perform the task. These data are then inter- preted into manhours per greenhouse production area unit Of the enter- prise or Option and provide the basis for manhour per week estimates Of labor coefficients for each Of the crOp alternatives. An additional labor-use factor is considered in detemining the final labor coefficients. Two manhours per week are added to the coeffi- cient determined in the manner just described for each greenhouse produc- tion area unit Of the enterprise. The rationale is that non-crop speci- fic labor and managerial tasks essential tO the production and Operation Of the firm are performed by the permanent employee couplement and must be pro-rated across all units Of production. Included in the two-hour per week per unit factor are the time the manager and his family spend in the performance Of such tasks as production and business planning and control, general supervision, purchasing, marketing, customer and commity relations, accounting and other Office work, and similar activities. Both managerial and labor force input into non-crOp speci- fic tasks are included, i.e. maintenance Of greenhouses and related facilities, non-mechanized watering and fertilization when necessary, pest management , hand-ventilation when required, general clean-up, heating plant Operation , general pick-up and delivery activities , and - numerous other minor non-crOp specific tasks. Vacation and sick days are also accounted for in the two hour per week factor as are part-time employees utilized for general tasks , e.g. students employed in the stunner to perform greenhouse and other facility maintenance. 66 There is a tendency fer the managers Of the firms studied tO estimate a somewhat lower manhour per week per production unit value for this non-crOp specific labor use. They eliminate from consideration much Of the time devoted tO these tasks, and especially tO the management function, on the basis that it is work done by the manager after hours, on weekends and during other "free time" and should not be charged against the crOp enterprises. Input-output coefficients fer each Of the crOp enterprises and options are developed.from.estimates made by managers participating in the study. Rarely, does the person interviewed hare data recorded on which tO base these estimates. Rather, the coefficients must be deve- lOped in intensive interview sessions in which managers estimate coefficients based on their firstehand knowledge Of the practices, tasks and procedures involved in each crap production program, Estimates from.two or more firms producing each crOp enterprise or Option are carefully compared. Where one or more firms vary subs- tantially from the other firms in their estimates, a basis for the differences is sought initially by careful review Of the production process to determine ways in which the deviant firm.perf0rmed diffe- rently. Where no reasons for the variation can be determined, the producer is contacted either by telephone or a second visit and re-inter- viewed. In most cases, a rationale fer extreme differences in coeffi- cients estimates is determined. CHAPTER III ANALYSES MADE WITH THE MODEL The model finm is used as a vehicle to analyze and compare the several modes Of enterprise specialization and combination generally used by floriculture producers. These include: (1) specialization by crOp or monocrOpping, (2) specialization by a combination of potted crOps and bedding plants or by cut flower crops, ( 3) diversification with the production of a wide range Of crops. Table 13 summarizes these modes . Crop,Specialization Specialization by crOp or monocrOpping is a common production alternative chosen by many flower growers. TO examine this approach, production Options within a number Of major crops are analyzed using the fixed resources of the model firm. Crops studied include standard chrysanthemums for cut flowers , carnations, snapdragons, poinsettias, potted chrysanthemums and geraniums. Discussion Of the results Of’these analyses fellows. All analyses are discussed in terms of one calendar- fiscal year constituted Of 52 weeks. Comparison Of Production Options for Carnations Two types Of carnations are produced for the cut flower market- standards and.miniatures. Standard carnations are large-flowered types disbudded tO allow only the terminal bud to develOp. Miniatures are 67 68 Table 13. Descriptive summary of models used in study. Mgdel Carnation specialization Standard chrysanthemum specialization Snapdragon specialization Potted chrysanthemum specialization Poinsettia specialization Potted geranium specialization Diversified crops program Internal Options standard carnations: single-pinch production program multiple-pinch production program miniature carnations controlled holiday cropping for: Christmas Valentine's Day Easter Mother's Day pinched crops to produce one crop per month single-stem crops to produce one crop per month single-stem crops to produce one crop per month; option to: produce own seedlings purchase seedlings one crop per month and fer Christmas, Valentine's Day, Easter and Mother's Day stock plant program to produce for sale unrooted and rooted cuttings, started plants in 2 l/h inch and h inch pots, and finished pinched and single stem blooming plants in h, 5, 6, 7, 8, and 12 inch pots, and finished stock plants in bloom finished pinched and single stem blooming plants in h. S. 6, 7, 8 and 12 inch pots from purchased propagation material Options for production for sale Of unrooted and rooted cuttings, started plants in 2 l/h inch and h inch pots, started stock plants in 5, 7 and 12 inch pots, and finished crops in h, 5, T and 12 inch pots for Easter, Mother's Day, garden sales and Memorial Day. Programs in which these options occur are: hO/l, 25/1, 12/1, 8/1, 5/1, 2.5/1 and the tree geranium program. all specialization program Options plus: roses for cut flowers: hybrid teas r floribundas bedding plants: potted petunias and marigolds for Mother's Day and garden sales: - direct-sown option - transplanted Option potted impatiens and fibrous-rooted begonias for garden sales petunias, marigolds, impatiens, fibrous-rOOted begonias, tomatoes in packs and trays for garden sale: - direct sown option - transplanted option Easter lilies: controlled temperature forcing program home case—cooled or non-pre-cooled program case-cooled or pre-cooled program (for all three programs, opportunity is Offered to buy and/or sell started plants at two points in the production program) Table 13. (Continued). 69 Model Potted plant specialization Cut flower specialization Bedding plant specialization January-May; diversified crops program June-December Bedding plant and geranium specialization Employment of temporary labor Internal options all potted options listed in above programs: potted chrysanthemums poinsettias geraniums Easter lilies bedding plants all cut flower options in above programs: carnations standard chrysanthemums snapdragons roses all options in bedding plant specialization for January-May period; other crops June-December including all options of poinsettias, and those options of carnations, snapdragons, standard chrysanthemums, potted chrysanthemums and gerani- ums which can be produced within the limits of this period. all options of bedding plants and geraniums with fixed resources of 75,000 ft2 greenhouse production areaand hoo hours per week of per- manent employee labor, the mode1.provides the options to hire temporary hourly employees at $2.00, $3.50 and $5.00 per hour. 70 smaller-flowered cultivars in which all flower buds are allowed to develop to produce a spray of small flowers on a stem. The terminal bloom is removed because it flowers earlier than laterals and is usually fading when the spray is marketable. Carnations are a long-tenm crap when compared with most other cut flowers. Standard chrysanthemums and snapdragons may be produced in 3-h months whereas the usual carnation production Options occupy bench space for 1-3 years depending on crop vigor, freedom.from.disease, and grower preference. Carnations are in greatest demand during winter and spring, but also find acceptable markets at other times of the year. Carnation cropping is determdned.by time of pinching of the crop. The new growth which develops following pinching generally produces a peak of'bloom.in h-6 months depending on the season of’year. MaJor carnation holidqrs are Easter, Mother's Day, Christmas and Valentine's Day. Red carnations are in primary demand for the latter two holidays. Two’maJor cropping programs are currently used‘hy standard carnation producers. And, there is considerable discussion among them as to which system or combination of systems are most productive and profitable. The systems are described as follows: Biggie or terminal—punch szgtem under this regime, plants receive only an initial terminal pinch approximately h weeks after planting. The crop generally responds with two complete crops during the next ho-hs week period. This system tends to allow'more accurate timing of crops for peak markets. Multiple orzpiggh-andpaéhalf szgtem All plants receive an initial pinch as in the single pinch system. About 6 weeks later the most vigorous shoots are pinched again. Cropping 71 is spread over a longer period of time, and the initial peak of bloom occurs 5-6 weeks later than plants grown in the single-pinch system. Proponents of this system.suggest that this delay peaks the crap in late fall and early winter when demand and prices are generally better. In recent years, "controlled holiday crOpping", a short-term production program, has been introduced as a means Of supplementing standard carnation production fer peak markets. Some producers also use it to ensure consistency of grade during less Optimum growing periods fer the long-term plantings. Under this program, cuttings are planted and single-pinched to time them fer a specific period of bloom. Two to three blooms per plant are produced simultaneously. The plants usually are discarded after initial bloom. Because plants are in the bench fer only 2h to 30 weeks, they are spaced h by 6 inches rather than the usual 6 by 8 inches used fer long-term.options. Of course, the tighter spacing also bolsters yield per square fbot. The production program.fbr miniature carnations uses a single pinch or with some cultivars no pinch at all. Plants are spaced h by 6 inches. Otherwise the production program is essentially that used fer standards except that temperatures 3-5? higher are used. Carnation options included in the model The model greenhouse firm is utilized to study the profitability of the three systems of standard carnation production as well as the miniature carnation Option. The manager has available the Options described in Table 11:, The following information supplements that in the table: '72 new» ocwuosooam axon Mo .I \s 4 mm m as: m >02 5. o a .. coo.» sen 3850: A mm m nn< H 900 PH. w x : ooo.w nausea a aw. m sea m m3 S. m x ._ ooofi s8 c.3353, 4 am :sm ova N Hob ha. m x : ooo.m nesunwaco uwnaoooao zmoudon oouaonvnoo 0:0: mm \MM 900 H mo< M\H 0:02 mm Mm one A one M\H oeoz mm \mm #00 H as: M\H pa. w x : ooo.wH oasusanax 0:02 Nm m as: a he: mm. m a w ooo.wa nuaaanoaaauas: 25: mm. m as: H =3. mm. o x m 893 sueaaiagam "ondoneum unawueonao nunwwa u A waoomv oo>osun ovoomam unnam\uuu menus“ AnEO»WM mwavnomOuomwooum mucosumonp cocoa om muonaq use: mcaonam can: caco«ncacuoca uses xooz scaposooao may 00: vacuw .Hocoe ecu cw capcaue>c noofiuao noduosoona "DGOHuGSU .GaH ”And? '73 mauve 0H goons a noon» 1 \o mo.o : moooasaaoomwz 00.0 m omwnon NH.o mm cndvcmum nfl.o on mouse mH.c a hunch nu»xm Any Ecoao\oowaa noesmwwfi n "mucosa one seesaw mewsOHHom mo encuuQESnne no women monsoon nexus: \w oo.o:m.m ow.a oo.w oom.a om.o awn assessor 00.0mm.» m».a oo.m om:.H mw.o acumen ma.mo:.a oo.oo~.a 00.: oo.a oom.a om.o as: a.oeoucoae> mm.mss.a oo.ooo.m oo.m oo.m oom.a cm.o «anemones "moummono hsowaos eoaaospcoo oo.mam.mm mo.w~ oom.m \meo:=p\oo.m ossoewmwz mm.amm o o omm.m \m eoeaanoaaasasz OO.QWN.®~. CHIQM Omoom \ndl EOBHQIUchfim "camcodum mgOMusnneo Anon: um oo:\av prod bu oo:\aw “pan: sowuomoonm\fiv Rouge: :ofiuosooam. Ammo easy man: may oo:\» sooan\» oprno coauoooonm wanes ”enema seesaw nuaoo conga ow who ooav noose monsoon vegan: huasoanoaoo unseen Andaman: shoves Hobos awe mono assuage amass: .xwa acne assuage ho hhdesdm unno«voohoo .D:H ease? 7h Single-pinch standard carnation option Cuttings are planted directly in the bench in the first week Of June and the plants removed one year later in the fifth week of May. This Option occupies production area for 52 weeks. Multiple-pinch standard carnations Carnation producers plant cuttings fer the multiple-pinch stand- ard carnation option in peat pohslo- 2 weeks prior to benching. This practice presumes that benching of a well-develOped plant will fayorably affect subsequent growth and flower production. To account fer this practice in the model, 10!: it2 or additional production area is assigned to each 1:00 rt? production unit for the weeks March I: through June 1. Hence, greenhouse production area assigned this Option fer this period includes 10h f't2 fer the potted cuttings, and hOO ft2 fer the crOp currently in production. Additional heat, pots and other input costs fer the potted phase are included in the variable costs for this Option. Miniature carnation Option As indicated in Table lh one-third of this Option is planted at each Of three times in the production year for the purpose Of providing more uniform levels Of production throughout the year. Further, the Option requires continuation Of each Of'these plantings through the third week Of OctOber of the second.year to take advantage of a favorable early fall market. Thus, the planting made in the first week Of’March is in the bench 86 weeks, the June planting 72 weeks, and the August planting 6h weeks. Fixed resources of greenhouse production area and labor, variable inputs specific to each Option, and market returns fer each Option reflect these multi-year aspects. 75 The Optimal crOp mix Table 15 summarizes carnation Options in the Optimal crOp mix. Table 15. Carnation Options and number Of units Of each in Optimal crop mix. Production Option Number Of units in mix Market limits Lunits) Standard carnations 38.18 none single pinch Standard carnations none none multiple pinch Miniature carnations 18.92 none Controlled holiday cropping: Valentine‘s Day h.OO h.OO Easter 1.75 5.00 Mother's Day 14.00 6.00 Christmas 5.00 5.00 The multiple-pinch system Of producing standard carnations is the only Option which does not appear in the Optimal crop mix. The solution indicates that total returns net Of variable costs will be reduced by $631.65 for each unit of this practice which is used in place Of more profitable Options. In other words, fOr each unit of multiple-pinch system carnations, an Option not in the Optimal mix, which is produced in place Of other carnation programs which are identified in the Optimal mix, returns to the fixed costs will be reduced by $631.65. Controlled holiday cropping Options for standard carnations are assigned market limits. The Valentine's Day and Christmas Options are produced to meet these limits. The Mbther's Day Option falls only 1.2 units short Of the allowable 6.0 units. Only 30 percent of the 76 allowable 5.0 units of the Easter option come into the Optimal mix. Nearly 19 units Of miniature carnations occur in the Optimal mix. The greenhouse production area fixed resource was used in the range Of 3h to h5% capacity by the Optimal carnation crop mix. The long-term.nature Of the mador carnation Options couples with market limitations on the short-term.controlled holiday crOpping Options to provide relatively little flexibility in combining activities fOr maximum use of production area. Figure 1 depicts greenhouse production area useage through the year. weeks in the year when the labor resource is limiting are indicated. The pattern Of labor use fOr long-term carnation Options including the miniature Option is characterized by a relatively low but regular weekly input Of labor into harvest. unlike chrysanthemums and snapdragons where harvest occurs in the final 1 or 2 weeks Of the production cycle, bng-term carnation Options are harvested during most of the last 9 months Of their production cycle. The harvest Operation though requiring a low weekly input by virtue of its continuation over a 9 month period easily accounts fer the madority Of total labor input. Bench preparaflonilplanting Operations and final crop removal account for mador peaks in the cycle. Disbudding coincides with and continues as long as the harvest Operation and accounts for a steady labor input through the latter three-fourths Of the production cycle. Because Of the program objectives, contrOlled holiday crOpping is not characterized by continuous harvest. Rather, the Option incurs two maJor labor peaks, one at bench preparation/planting and one at harvest. .55 no.8 .3530 5 can: send oozes—noun Opponents» 3033.30 .H enema o In all kw“ 1 9 F ..a 1 m ~b J4 u . hen c.3502 non manage c3030: oedaonvnoo cm W unearned ban 6005.3 downed.“ 3 6353 65a case: a cocoon potion coho m: ..mm m .unogenneo caduceus» . seesaw Pa consumes? m: m concede ooioflua 14\ K 1cm m moampewcwa m: moguowemn m: M - .3...=..:~:=. I mm N \ censuses?— as W O swoon ..II 33330 nouns—J; .« H «c To: m 7: N wages: 05009 .883 :03: 5. axons no 13 m 3 IR mu m TR 8 .m 100 m .a 15mm m ”w I2. hpwusmso 8:6“sz f/ mommasmma smmflws man an: «swims mmaosmmas noamsmmesmmasm mama. 92 ea. .5. 3.2 «.2 5i men 56 own >8 So an». 78 In h weeks Of the 52aweek production year, the level Of labor resource limits further use Of greenhouse production area. Marginal returns, i.e. the amount by which return to fixed resources would be increased if one more unit of labor were available, fOr each of these periods, are given in Table 16. Table 17 and Figure 2 summarize labor resource use. Table 16. Carnations: production periods in which labor is limiting; marginal returns fOr labor in those periods. Production week Marginal return per hour Of labor (3) OctOber 3 h5.00 April 1 127.00 May 1 26.91 June 1 11.52 Table 11. Carnations: emery Of use Of 600 hours/week Of permanent employee resource. Excess labor capacity (hours) Number of weeks in year with excess labor capacity 0 h 1-50 5 51-100 1 101-200 11 201-300 114 301-h00 1h 1:01-1:50 3 .h51-600 O 79 .55 no.8 ace—«poo 5 on: couscous Ochoamac omega "so“ unseen .N chow: o non—Ouch. hope." u .0 sewage .. 9. I on T own r 8H .. com I Sm I one I owm r 8m 1 8.. I 93 I cm: I own I own 000 Hmmam. m on m. l a: me: .ma: mmamqammasmma 5:. BBQ >03 Foo mam (KEEN/9800f!) CIEZI'IIM som 80 Market limits are imposed on controlled.holiday Options based on the nature Of demand for carnations at these periods. The Optimal crop mix contains full production quotas for only the Valentine's Day and Christmas Options. Shadow prices (marginal returns), the amount by which total returns tO fixed resources are reduced for not producing an addi- tional unit Of the Option, are $1h06.79 and lh22.83 respectively for these Options. The other Options are not produced to the limits imposed. The carnation Optimal mix generates $139,000 tgtgl,return to fixed costs per year, or $1.87 per ft2 Of total production area. This mix yields ngDreturn (loss) to fixed costs, i.e. returns after fixed costs incurred to provide 75,000 ft2 of greenhouse production area and 600 hours of labor are deducted, of -$73,07h.00 or -$O.9T per fta. However, if the carnation program is charged the fixed cost for only the greenhouse production area actually used to produce the amount Of the crop in the Optimal mix, e.g. about 35,000 ft2 and fer all 600 hours per week per year Of permanent employee complement, than total return (loss) to fixed resources is ~$15,022 or -$O.h3 per ft2 per year. On the other hand, if prOportionately more hours Of labor are provided tO fill the 75 ,000 ft2 Of production area with the carnation Optimal mix, total return (loss) to fixed resources is -$32,096 or -$O.h3 per ftz. Productionfiguidelines which emerge from analysis Of optimal crop_mix A number Of production guidelines emerge based on analysis Of the Optimal crOp mix: 1. The single-pinch system Of producing standard carnations is a more efficient program than the multiple-pinch approach. While the multiple-pinch Option returns $200 more per unit of 2. 81 production than the single-pinch Option it also requires additional labor and 10% ft2 more production area per unit for the 10-week pro-benching, potted phase Of production. Further, more labor is required for the additional pinching Operation. Essentially, the single-pinch and:mu1tip1e-pinch programs are identical except fOr these differences in inputs and returns. Where the labor and space resources available are fixed, and market returns for the product are the same, the program requiring the least Of each Of these resources should likely emerge in the Optimal crOp mix. The level of permanent labor resource limited further use Of production area at four points in the year. In two of these weeks, June 1 and OctOber 3, major crOp planting Operations and maJor crOp removal activities respectively accounted for exhaustion Of the labor resource. With the exception Of the peak labor needs generated by annual planting and removal of crOps and by harvest peaks at holiday times, the labor requi- rement for 1ong-term.carnation Options is relatively uniform throughout the year. The short-term.controlled.holiday cropping system imposes additional peak labor requirements primarily at holidays when harvest requirements of long-term Options are swelled by this supplemental production. The other two weeks in the year in which labor is limiting are April 1 and May 1, weeks in which harvest occurs for the peak Easter and.Mbther's Day markets respectively. Marginal returns fer labor in the April 1 week are highest at $127.00 per hours. This demand 3. 82 fer labor is influenced not only by the Easter harvest of both single-pinch program.and Easter controlled holiday option, but also by the demand fer labor in this week for disbudding Mother's Day crOps to'be harvested h weeks later. Similar competition for the labor resource does not occur with other controlled holiday Options because of the greater time period between their harvest dates. These situations exemplify the need for the carnation operation manager to consider carefully how the maJor labor-requiring tasks of planting, disbudding, harvesting and crap-plant disposal mesh among the production schedules for the options. Where conflict in these operations indicates labor resource limitations, selection of alternative production Options, or employment of temporary labor fer peak periods become necessary considerations. By their occurrence in the Optimal crOp mix, controlled.holiday cropping options are shown to be economically valid for supple- menting long-term.production programs for peak holiday markets. While each of these Options occupies production area fer about one-half the time required for the long-term.options, and yet yields only one-thrid to one-half the number of flowers per production unit, grade is generally better and peak harvest occurs at holidays when prices are considerably higher. There are fewer Operations requiring labor input because pinching and plant maintenance practices essential for long- term Options are unnecessary. 83 1:. Miniature carnations emerge as the second maJor component in the Optimal crOp mix. This Option occupies a greater amount of bench area per production unit over a longer period of time because of the nature of the cropping system. Labor input is somewhat greater per unit but returns to fixed resour- ces also are greater. However, the greater returns apparent- ly are countered by the Option's greater use of the fixed re- sources of space and labor. 5. The Optimal crOp mix favors those options which make most efficient use of fixed resources. Given available precision production technolog , it is questionable whether production systems which require additional labor and space inputs ostensibly for the purpose of building more vigorous plants , e.g. the standard carnation multiple-pinch system, should be carefully evaluated for validity before being implemented by the modern floriculture firm. Before concluding discussion of the carnation Options, it is important to note that long-term programs do not lend themselves well to analysis within the 52-week production year of the model. The standard carnation multiple—pinch and the miniature carnation options require more than a year to complete and would be more accurate” ana- lyzed within a two-year time frame. Some compromise with the actual industry situation has been made through the various assumptions necessary to fit these Options into an annual model. The Optimal mix and its analysis should be considered with this in mind. 8h Comparison of Production Options for Standard Chrysanthemums for Cut Flowers Standard chrys anthemums for cut flowers are grown year-round. Specialists in this crap produce three to four crOps annually. Growers of diversified crOps produce chrysanthemums only at times selected to mesh with their markets and production timetable for other crOps. The chrysanthenmm blossoms in response to temperature and photo- period. At 60F night temperatures, and under long-day conditions, the plant is vegetative; given short- days at this temperature, flowers ini- tiate and develop. The chrysanthemum flowers naturally in the fall in the northern United States. Through the use of lights and/or black shade cloth, the crop m be manipulated to flower in arm week of the year. Precise schedules for year-round flowering of specific cultivars are provided by major chrys anthemum prOpagators . The chrysanthemum grower has the options of producing a single- stemed crop, or of pinching the plant and allowing two blooms to develop. Pinched crops are given about twice the spacing as single- stemmed crOps and so require about half the number of plants. Spacing for both Options is further influenced by grade of cut flower desired and the light intensity as it varies from season to season, i.e. greater spacing fall and winter, closer spacing spring through summer. The major production input difference between the pinched and the single- stemed production Option is that the latter requires about twice the number of rooted cuttings with which to start the crOp. Single-stemmed crOps generally require two to three weeks less production time and do not require the pinching labor input, 2 hours per unit of production 35 area (too a?) . Other variations in production inputs apply to both pinched and single-stewed crops alike and stem from differences in heating costs and photOperiodic requirements as determined by season of production. The costs of photOperiodic manipulation include those of lighting equipment, electricity and/or black shade cloth, and the labor to daily cover and uncover the crap with cloth during the required shading period. Standard chrysgnthemum ofiions included in the model The manager of the model greenhouse Operation has the Option of producing pinched or single-stemmed crOps timed to bloom at least once per month and for the maJor holidqs of Easter, Mother's Day, Thanks- giving and Christmas. The options are specified in Table 18a. Market quotas are established only for the four maJor holiday crOps. Yield per 300 ft2 unit of production area ranges between 160 and 205 dozen blooms depending on seasonal spacing. Also, the yield for pinched crOps is slightly favored by use in the model of the grower practice of allowing three stems per plant to develop on outside rows of the bench. Pinched crOps occupy bench space for two to three weeks longer depending on season than do single-steamed crOps. Pinched crOp time-in-bench ranges Ram 18 to 22 weeks ; single-stewed crops from 15 to 19 weeks. Market returns vary with the crap based on seasonal and holidw price fluctuations. Hence , revenue from a 1:00 ft2 production unit varies with seasonal production requirements in terms Of plant spacing, heat, and photOperiodic requirements , and with market demand as reflected in price. The "Returns to fixed resources" column in 86 m ma m ms< A use wH.o m x : unsms< am ma m m=< m as: ea.o m x a com pusms< am ma m «:5 a ua< ma.o m x a com haze am ea a use a he: om.o e x m one case a ma m as: m can om.o o x m ore seq u.hozuo: a ma m ha< m use om.o e a m one seamen a on m as: w >0: om.o e x a one note: an ea m sea m coo om.o o x m owa nauseous ea m use m new om.o m x m ooa macaque cm oa m can m es< ow.o m x m com nassuauno a ma m can m ws< om.o m u m om” tunamuon a ea 4 so: a ms< o~.o w x a com m=a>amuxaege m we m >oz a fine ma.o m x a com topau>o= m ea w sue a use ma.o m x a com hobopoo undone seam edmmum m «a m wsa m ha< mm.o a x m com umsms< an ma m wz< m ua< mm.o m x m com unswa< am ea m age m as: mm.o m x e com ease am om m can a sea mm.o o x a oma case a ma m be: m con am.o m x a owa ave a.uoaaoz 4 mm m aa< m >oz am.o o x a can Luanda 4 am m as: m 900 mm.o m x a one note: a mm a can a new am.o m x a one assess» am mm m use m m=< mm.o m u a own aaaaqen am mm m can a den mm.o w u a mom aa-aoaueu m 3m N eon H wo< mm.o w x p oma nonsense am aa a >0: m age am.o o x a mom cussu>oz m ea m >oz a ash mm.o w x 0 new uuaau>oz m as m goo m ash mm.c m x w mom ungoaoo "noose oononum mummun one 1~wxeosw pepmosam: poqmdflm. aceHQNNuw menus“ \Ndonodv \Mdo«amo :Oauozooum nuoaoxooan a 4m :ooon ma non: x003 mmaornm was: noduooooun aszmaa a a teas was ac: and euoa» nsoaoxoeap u m nanosecouv eoahmdoucsa .Huooe ezs :w cansafis>s macahao noflposmouu "nadaonazdmhano pudendum .nwa manna 87’ mm.aoa o «3.40m can mm.: pusma< >m.maa o mo.mmm can m~.: unsw=< o:.mm o :p.mwm one mm.a Aqua 8;. 348 com on... «5.. om.mmm .oo.oa oe.a~o oa coo om.m awn a.hmaaoz mm.~ «p.3oe ma one on.m nausea ea.oa mm.mem com oo.m noes: ma.ma mm.emm coo co.“ sequence mm.cMu o mm.omm cow so.“ acescsu om.ow oo.oa we.eao ca coda om.m . usasmahzo eo.:m o o>.omm. com oo.m accessed om.m am.omm oa ooaa om.m maa>amnxcaga em.w m;.mmm one mm.a nonau>oz oo.mom o mp.~om one mm.a smpouoo "macho Bean oawcfim mm.am mm.mae Hem mm.: unamz< we.o o:.wo> Hem mm.: anams< ea.wm om.aow new mm.a haze ao.wm mm.mmw one o«.: ease me.mem oo.oa ow.a:m cm can om.m awn u.honuox me.~wm oo.w~ nm.mmm ma cam cm.m seamen oa.a: mm.a:e , com oo.n none: me.am oo.moe com oo.m auuznun a;.w me.eae com oo.n assess» we.m em.o:m oa wwaa om.m usssuauao om.mm ma.o:r com oo.m nonsuoon mm.:ma oo.oa m~.mmm oa cues on.m hepau>oz ow.p mo.oa> Aha mm.a honau>oz mo.m~ am.oap Hem mm.: honouoo "macho venomam Aces: wwm oes\ww .pa:2 and oo:\«v mean: Aav canoe 1~nuaqs mac coal use coauwx evnoe\» mmmmmmmlmmwmmmmmmm Anew seesaw umoo sawsooeoam pexwa Op saoso vexed: cassava paras: maroon Hanamunz hawmsuuomgo Jam oo: unseen nouoa C was none Academe .KHE mono Husdumo Mo hanassn amasaonamsnhuno pudendum .an adage 88 Table RMJreflects the revenue from.each production option after the cost of production inputs specific to the option are deducted. The Optimal crOp mix Table flhxspecifies the number of units of each production option in the Optimal mix. Pinched Options predominate with units of all 1h such options in the mix. units of only eight of the 1h single-stemmed Options occur in the mix. The holiday options for which highest prices are assigned are produced to the level of market limits imposed with the exception of the pinched Christmas crOp and the single-stemmed Easter and Thanksgiving crops. In these latter three Options, level of pro- duction is more than one-half the number of units allowed by the market limitation. Production Options appear to come into the optimal mix generally on the basis of level of return to fixed resources. As expected, among the pinched options, number of weeks in the bench, i.e., the greater use of the fixed resource of greenhouse production area, influences selection with those options in the mix in greatest quantity requiring generally fewer weeks in the bench. This is not the case among the single-stemmed options where returns to fixed resources appear to be the primary basis for selection of the option. The pattern of labor use in the chrysanthemum crOp has maJor peaks at bench preparation/planting, disbudding and harvest. Additional labor inputs are required for installation of lights and manipulation of black cloth in those Options which require one or both photoperiodic treatments. The fixed labor resource becomes limiting in 17 of the 32 weeks 80 Table 19. Standard chrysanthemums: production periods in which labor is limiting and marginal returns for labor in those periods. Production week Marginal regurn per hour of labor Sep 1 16.32 Oct 1 38.08 h 15.6% New 2 2l.h5 Dec 1 25 ,h9 2 28.58 h h7.23 Feb 1 3.05 3 36.h8 Mar 1 19.15 3 10.h6 Jun 1 57.28 h 29.28 Jul 1 1h.65 h 17.1? Aug 1 23.10 Table 20. Standard chrysanthemums: summary of use of 600 hours/week of permanent employee resource. Excess labor capacity (hours) Number of weeks in year with excess labor capacity o 17 1-50 7 51-100 3 101-200 12 201-300 10 301-350 3 351-600 0 52 90 as indicated in Table 19. The marginal return fer an additional hour of labor at each of these periods is also given. These marginal returns suggest that the employment of temporary help in each of these 11 weeks will allow the manager to increase productivity of his fixed resources. A.higher percentage of available greenhouse production area likely will be used, and the permanent employee complement will be more fully utilized. Table 20 summarizes the use of this latter resource. While greenhouse production area is not limiting in any period, it is nearly completely used during the period of the third week of OctOber through the second week of'lovember. The lowest level of usage occurs the third week in July when only about 50% of the production area is in use. The patterns of greenhouse space and labor use and those points at which the exhaustion of the labor resource occurs are shown in Figures 3 and h. In those crOps fer which market limits are imposed, the mar- ginal returns are listed in Table 21. Table 21. Standard chrysanthemums: marginal returns fer’holiday crOp options with market limits. Holiday crop option Market limit Marginal returns (production units) (3) Pinched crOps: Easter 12 262.75 Mother's Day 10 369.79 Thanksgiving 10 29h.55 Christmas 10 limit not met Single-stemmed crops: Easter 12 limit not met Mother's Day 10 522.96 Mgiving 10 limit not met Christmas 10 60.6h .56 no.3 11.5.30 5 one: no.3 53025.3 ogoonooum Hosanna—anbgo ououmevm .m 093mg 91 o In IOH :2 ION 18 non ..em to: In: ..R ram 18 L... (1.33.! 387008 OOO‘T) 390 III W NOICLODCIOHJ 33003an 95.33: noaooon gonna no MWHMHMMW eminence 1.2. \ €85de 3:33-3:32....388: 23.283.833.88... r m P ...,. -.. .ammam measmaamaraasmaaamma flamed..mma....eaa....«e»%amwaamama ._ c=< 4?. x4: mum 5:. awe >02 ab: mmm 92 .55 no.3 Hoawumo 5 coxmnzwuo ochoameo managed "fiasco—admire veep—Bum .: show: deuawd ca .845 coach ma axon: .. O o I 3 .| CD I o2 .. 8H .. 8m .. 3m .. one I 0mm I owm r 8; l 93 r 8.. I own I com N a: H Pl .1 mm 41m .5 z. a N m a :2 an N H who meagmmmsmmfl >Oz Boo mum oow ()EEM/SKDOH) (IEZI'IIJJI 50m 93 Six single-stemmed production Options do not appear in the optimal mix. These options are listed in Table 18b along with the costs in terms of reduction in total returns to fixed resources should the manager choose to produce these non-optimal enterprises. The standard chrysanthemum Optimal mix generates $266,710 total return to fixed costs per year, or $3.56 per ft2 of total production area. This mix yields get return (loss) to fixed costs, i.e. returns after fixed costs incurred to provide 75,000 ft2 of greenhouse production area and 600 hours of labor are deducted, of $5h,688 or $0.73 Per ftz. However, if the standard chry- santhemum program is charged the fixed cost for only the greenhouse production area actually used to produce the amount of the crop in the 2 optimal mix, e.g. about 65,000 ft and for all 600 hours per week per year of permanent employee complement, then total return to fixed resources is $69,188 or $1.06 per ft2 per year. On the other hand, if proportionately more hours of labor are provided to fill the 75,000 ft2 of production area.with the standard chrysanthemum.0ptimal mix, total return to fixed resources is $80,170 or $1.07 per fte. Production guidelines which emerge from optimal crop mix Production management guidelines may be identified for standard chrysanthemums grown for cut flowers on the basis of the analysis: 1. Pinched standard chrysanthemum production options provide greater net return to the use of the fixed resources Of labor and greenhouse production area than do single-stemmed crops. The maJor factor which appears to give these Options the advan- tage is the lower input cost fer cuttings with which the crop is started. Because two blooms are produced per plant in 9h pinched options, and because plants are given about twice the spacing, cost of cuttings incurred per unit Of production is about half even though essentially the same or somewhat higher yield is achieved. The assumption is made that a comparable grade of cut chrysanthemum‘will be produced under each Option. 2. Among pinched Options, those which come into the optimal mix generally tend to be the Options with highest return to fixed resources. While this is not as generally true of single- stemmed Options, the tendency is there. This is predictable in that labor input does not differ- greatly among pinched and single-stemmed Options. Most of it occurs during soil prepa- ration, disbudding and harvest, all Operations which require essentially the same input per stem regardless of whether the crOp is grown pinched or single-stemmed. And, while there is considerable variation among options in numbers of'weeks of greenhouse production area required, those Options which requi- re fewest weeks coincide in production with periods when market prices for their yield tend to be among the lowest of the year. Consequently, the production area advantage appears to be offset by the price disadrantage. In emery, with relatively few differences in the required input of fixed resources of labor and greenhouse production area among the various options, returns to fixed resources from.the Options are closely tied to a combination of the levels of variable input costs incurred and market prices received. The most significant production input affecting the solution is cost of cuttings. As a result, pinched crOps, which require about one-half the number of cuttings per unit as single- 9S stemmed Options, and which yield slightly more than twice the blooms per production unit, predominate in the Optimal crOp mix. However, any change by the manager in his spacing or in the number of blooms which he grows per pinched plant , which in turn affects both crop yield and quality, will alter the Optimal crOp mix. Comparison of Production Options for Single-stemmed Snapdragon Crops Snapdragons for cut flowers are produced throughout the year. Specialist wholesale growers account fer the maJority of production although many retail producers also grow bench lots. In recent years, snapdragon production in the northern united States has declined because market returns hare been inadequate to Justify production. The snapdragon is a spike flower and is readily substituted fer by the omnipresent gladklus, readily available from Florida and other distant production areas fer most of the year. Further,snapdragons do not ship well, and do not hate long storage life. Snapdragons crops are started from seed. Meet growers prOpagate their own although seedlings are available from suppliers. Crops m be grown single-stem or pinched. In recent years wholesale growers have essentially abandoned.pinahed crOps in favor of single-stem culture to assure better and.more uniferm quality, and.more precision crOp-timing. Uhlike chrysanthemum cuttings, snapdragon seedlings represent a consi- derably lower input cost thereby allowing the better prices received fer the higher quality single-stem crOps to easily overcome the some- what higher cost incurred by the use of greater numbers of seedlings in this Option. Snapdragon specialists program production to supply 96 a continuous flow to market during most weeks of the year. The crop is grown at 50? nights thereby having a considerably lower heating cost input than most other major crops. The rate of development of the crap is readily influenced by temperature. This makes timing of the crop difficult. A period of bright light and/or warm weather can substan- tially speed develOpment. Consequently, precise production management is essential to maintain marketing schedules. The length of time required to produce a crOp of snapdragons varies with the season. CrOps harvested in mid to late summer are produced in as few as 11 weeks; mid to late winter-flowering crops may require 23 weeks of bench time. Table 22a specified other aspects of snapdragon production programs . Mon production Options gncluded in the model The major objective of this portion of the stuck is to determine the profitability of specialization in snapdragons. The manager is given the options of producing snapdragons for major holidays and at least one crOp in those months in which no holidays occur. In an actual industry situation, a grower would have much greater flexibi- lity in scheduling, and a snapdragon specialist tends to program his operation to have some supply for market in all weeks of the year. Of course , greatest production is scheduled generally for peak market periods. In the model, only a monthly sampling of options, and holiday options are used in order to keep the problem Of manageable prOportions. The manager also has the option of starting each crOp from seed or purchasing seedlings from a supplier. The cost of variable inputs to produce seedlings is $8.00 per 1500 ft2 unit of production Option. 97 nH m muw 000 a w=< : 05< H mo< no.0 : x m 00: 00: 0H penaooon mH m aim >0: m ws< m w:< : How no.0 : x m 00: 00a 0H monao>oz mH m mum poo N H30 0 How m use no.0 : a m 00: 00: OH unsecuo HH m msw new m Hon m H30 m can no.0 : x m 00: 00: 0H monsoomow NH gum ws< H one no.0 : a m 00; 00: OH unowo< ma m ..-m as m 3. m as: m .34 86 .. x m 8.. 8.. S 32. 0H m :nm new m pom m com a one no.0 : K m 00: 00: OH some 8 m H 221.8... m 8a m 8 .. >3. 8.0 .. x m 8.. 8.. S as: an m wuH aa< m >0: m >0: m #00 no.0 : x m 00: 00: OH HHum< mm m Ta .8: m 80 m 08 m 8m 86 .. x m 8.. 8.. 3 not... mm m mum 8... m 8m m new m .03. 86 .. x m 8.. 8.. 3 838m Hm m muw one m mo< m 03¢ m msa no.0 : x m 00: 00: OH macaque mqoau mmcHHooem enume>aom eoucmHm. noumo>amn noumsdmlxamnHm\wuu nesomH mwenocv maouo nmoproom EOOHQ o» macho Amman meson :H mafia x003 x003 x00: :00: coHpoooouo mono pHms Hmeav aHm: soHuoovoum sounuoHanm moHuoodoam newuooooum mom moHosmm :OHaosoOaa ”mooHuao neeHooon mom oHOHw noHuooooum .Hooos or» :H oHnoHHs>r mecHumo :oHuosooua "meowsupamcm .omw OHnne 98 .oooH>oum nOHuao o: I \m nm.HH pm.:0> no.0: m0.mz 0 owe on.H monsoooo nm.HH mm.mmn 00.0 00.0 0 can 0n.H umpao>oz nH.mHH :H.:NH nn.mwm 0 0 0 nun NM.H mopoaoo nm.HH 0m.mmm 04.nm 0:.nm 0 nmm mm.H sepaoamow m0.mwm mn.nm \m. mn.nm nwm mm.H unswo< 84H 8.8m 8;... 8;... 0 can an .H .23. mn.HH MH.MHm Hn.am Hn.:m 0 nmm mm.H some 8.3 9.48 S... 9... o one. 84 as. 0n.HH mm.mnn m0.nm m0.nw 0 0m~ on.H HHum< 40.0H Hm.mon m>.mm mp.mm 0 can on.H nous: mm .d ..m . 80 am . .. c an . .. 96 8 . H gene..— ::.0H :n.an H0.nm H0.nm 0 0mm 0n.H mundane mmoHHpoea mmoHHoeem Away 004\an. macho wwcHHooon nuaHHoooa Nah 00:\m. mosoo\w EOOHD o» nmoao seam Onssouom namoo ooxau Op ooanewm roam omnzoaoa choose vexed: supeIOHnan Amen 00axav museum Haves «mOch moHucsooan New 00am. unmoHpao amoo hvwmspaomoc xHE memo HnEHumo :oHuosooum .xHa mono HoaHomo no hhseasn uncomeaomsmm .nmw OHmce 99 The total cost of purchased seedlings per unit is $20.00. The fermer option requires labor and production area inputs; the latter does not. Market quotas were not established for any of the Options. Yield per h00 ft2 of production area (one production unit) is set at h,800 stems or hOO dozen based on a 3‘by h inches spacing of plants. Market returns range from.$l.32 per dozen for summer crOps to $1.80 per dozen fer holiday crOps. The major variables in return to fixed costs are differences in market returns and in the heating input as it varies with season. Return to fixed costs for each Option are specified in Table 22b. The Optimal crOp mix The Optimal crop mix is specified in Table 22b. In that each option requires about the same major labor input, the factors which tend to influence whether an Option occurs in the mix are the number of weeks in the bench and the returns to fixed costs. The latter, of course, reflects primarily differences among the Options in market price and heating inputs. Only the crop option scheduled fer OctOber bloom.fails to occur in the mix. Total return to fixed resources would be reduced by $112.11. per unit of this Option produced instead of an Optimal Option. Review of’the program fer the OctOber Option reveals a.minor coding error which resulted in adding 2. weeks to the production time fer the crop. This error also places the planting period fer this Option in direct conflict with that for the September crop, an Option which blooms h weeks earlier than the OctOber crOp, and fer which return. to fixed resources sis slightly more than those fer the OctOber crop. 100 Under these circumstances, the September Option should consistently be favored in the solution especially under conditions where the fixed labor resource is ultimately limiting. All other Options occur in the Optimal crop mix in the range of 28 to hh units each with the exception of these crops which bloom in February, late April and late November. These options occur in the Optimal mix to the extent of h.59, h.h3 and 2.09 units respectively. Analysis of production programs for these Options indicates that each of them is competitive with another option fer the labor resource during either peak planting or harvest periods. Consequently, the option which contributes most favorably to the optimum.mix is programmed in a greater number of units. Table 23. Snapdragons: Production periods in which labor is limiting, marginal returns for labor resource in these periods. Week Marginal return per hour of labor ($) Sep 2 20.6h Sep 3 3.71 Oct 2 28,90 Nov 2 h2.65 Dec 3 51.96 Feb 3 29078 May 2 3mm: Jun 1 39.66 Jul 2 lh.5h Aug h 3.08 Aves 25.96 101 Table 2h. Snapdragons: use of 600 hours/week available permanent employee resource Hours of excess labor capacity Number of weeks in year with excess labor capacity 0 1-50 51-100 101-200 201-300 301-h00 hal-SOO 501-600~ t: ...a OQGV'I #‘VII'O V! N In all cases except that of the FebruaryAblooming crOp, produc- tion programs in the Optimal crop>mix are started from seed. Per the February crOp because the labor resource is limiting fer 3 of the h weeks in the period required for seedling production, seedlings are purchased. For all purchase-seedling options, the reduction in total return to fixed costs is in the range of $10-12 per production unit produced in place of one propagated from.seed. The pattern of labor use in the snapdragon crop is characterized by major peaks of input in the bench preparation/planting Operation and at harvest. In a.mechanized Operation there is relatively little crop- specific labor expended in the period between these operations. Limitap tions in the ayailability of labor ultimately prevent the entire green- house from‘being programmed fer production. The h weeks in which the labor resource is exhausted and the marginal returns for the resource in these weeks are shown in Table 23. In all cases, labor becomes limiting in weeks when planting and harvest Operations occur. In that 102 these Operations represent the only major labor inputs in the crop, this result is predictable. Marginal returns for the labor resource show the weeks of Dec 3, Nov 2, Jun 1, and May 2 to be the periods when one additional unit of labor resource would contribute most to the returns to fixed costs. Again, as would be expected with the labor input pattern for this crOp, considerable excess labor is available in the weeks in which neither planting nor harvesting Operations occur. Table 2b specifies these levels. In a real situation where the manager is crOpping on a weekly or biweekly basis, instead of on a.month1y basis as was necessary in the model, these amounts of excess labor would be considerably reduced as greater numbers of planting and harvesting Operations came into the Optimal crOp mix. The fixed resource of greenhouse production area does not become limiting at any point in the production year. Figures 5 and 6 depict the pattern of greenhouse and labor use, respectively. Points at which the available labor resource limits further use of greenhouse produc- tion area are also indicated. The snapdragon Optimal mix generates $176,952 tgtgl_return to fixed costs per year of $2.36 per ft2 of total production area. This mix yields ggt_return (loss) to fixed costs, i.e. return after fixed costs incurred to provide 75,000 ft2 of greenhouse production area and 600 hours of labor are deducted, of ~335.122 or -$0.h7 per ftz. However, if the snapdragon program is charged the fixed cost for only the greenhouse production area actually used to produce the amount of the crap in the optimal mix, e.g. about 60,000 ft2 and fer all 600 hours 103 .3... 00.5 H9530 5 00339: no.8 2030300.... omeoncooum "cownheanmm .m madman I... H ..om 1mm .8 . umm r... media: 9860.... .8an :02: an 3500 «0 10m 1mm (ma swabs OOO‘T) 38f] NI VZHV MOI-LODCIOHd 390014113330 38.3.... on» 8.23 ..NH Inn .3 «Oman 0 .5..onde lop mamNHzmmHame nzmmH:mmHm :MNH mmdmammH:MNHmJMNHq—MNHszH c. E a: n 2:5 MS... an; ”2.: max 25. .0an >02 98 mum .xHE dome HssHamo mH :oHusaHHHps nonsense oehoneo ombudsman ”soweupmomm .n ousmHm 0 1014 H. 9. 1 0NH meHHEHH nH mODmH ncHns cH axon: «e I 00H 3 r 08 fit gm 1 8m. 03211110 808V? I own I 00m I 8.. ( mss/ smon) .. o.... I 0n: I omm Hm>OH moanH asewxaz. I own n 8 «Hemmamammammemsmmaammam:mmHammHammH o H<£ mm< m02 BOO awn 105 per week per’year of permanent employee complement, then total return (loss) to fixed resources is ~313,320 or -$0.22 per ft2 per year. On the other hand, if prOportionately more hours of labor are provided 2 to fill the 75,000 ft of production area with the snapdragon Optimal mix, total return (loss) to fixed resources is -$16,590 or -$0.22 per m2. Prqgggtion;guidelipes which emergepfrom analysis of the optimal crop mix Production guidelines which may be identified based on the Optimal mix follow: 1. As noted earlier, production Options appear to come into the Optimal crOp mix primarily on the basis of number of weeks in the bench and returns net to fixed resources. Differences in the latter value among various options stem primarily from variations in market prices received and the cost of the heating input. Assuming at least a fair degree of labor effi- cienoy, and knowing that heating costs are difficult to reduce, it would appear that increases in profitability in the snapdragon crop must come primarily from increased market returns. 2. Production of snapdragon seedlings with which to start the crop is the Optimal alternative to buying seedlings from a prOpagator. The space and labor input are sufficiently small to make this practice economically favorable over the purchase Option. 3. with the exception of the four crOp Options noted, all Options are well represented in the optimal crop mix. The three 106 Options which occur in lesser numbers of units, i.e. crOps which bloom in February, late April and late November, could be rescheduled to avoid the present conflict with high labor inputs of other Options. If this were done, one would predict that these options would be more heavily repre- sented in this solution, thereby guaranteeing the desired uniform production pattern through the year. It. In a real situation where a grower schedules to bring units into bloom on a weekly or biweekly basis rather than on a monthly basis as in the model, and given the labor use pattern for this crOp, careful production planning to avoid conflicts in planting and harvest Operations will result in considerably more effi- cient use of fixed labor resources. Comparison of Production Options for Potted Chrysanthemums Potted chrysanthemums are produced in every week of the year. Their diversity in color and form and their durability in the marketing pro- cess and in the consumer's home make them a highly acceptable product. They are produced with four to six plants per 5 inch or 6 inch pot. Increasingly, ’1 inch pots containing one plant are finding acceptance particularly for mass market sales. Potted chrysanthemums are grown from cuttings purchased from spe- cialist prOpagators. Because chrysanthemums bloom in response to photo- period, manipulation Of dqr length with lights and black shading cloth make possible year-round production. Most chrysanthemum cultivars used 107 for potted crops are in the 10-week response group, that is, they require 10 weeks to bloom following the onset of short-day conditions. Total production time for a crap will vary between 11 weeks for simmer crOps to 12-15 weeks for crop produced other times of the year. Most growers are able to produce four crops per year per unit of production area. Of course, through prOper scheduling, most specialists will have crops available every week of the year. Potted mun are grown for most major holidays with Thanksgiving, Easter and Mother's Day producing the greatest demand. Christmas and Valentine's Day represent minor demand peaks. The usual production procedure for potted chrysanthemums is to place pots with five newly planted cuttings directly in a "nurse" area for a period of l to 3 weeks depending on the season of the year. In this area, were temperature and high humidity are provided to initiate rapid establishment. Because mist facilities are required, plants are spaced pot to pot during this period. Thereafter, they are given in- creased spacing with some growers moving them directly to their final spacing. Plants are pinched usually once and growth regulator sprm applied to control plant height and form. Most producers use automatic watering systems to irrigate and fertilize the crap. Potted crysanthe- mm are gown at 601" night temperature. Potted chrysanthemum options in the model Most producers grow potted suns according to the procedures just outlined. The major point of decision for the manager lies in the sche- duling of crOps to meet the demands of the market at prices sufficiently 108 favorable to make the crOp profitable. Production options available to the manager of the model firm are specified in Table 25, and include the ppportunity to produce a crop at least once a.month and for all major holidays. The production unit is 1,000 6 inch pots, each containing five cuttings. This unit consumes 330 ft2 of "nurse" area fer l to 3 weeks, depending on the season. Pots are moved directly to final spacing from the "nurse" area. PhotOperiodic treatments are provided as required. As under present real market conditions, market return is set at a standard value for all crops including holiday Options. In the model, this price is $2.25 per 6 inch pot or $2,250 per 1,000 pot production unit. Market quotas are established for all options except Memorial Day. Return to fixed costs in Table 25b specify revenue from the Options after crOp-specific variable costs are deducted but before fixed costs of greenhouse production area and labor are deducted. The optimal crOp mix All production options come into the optimal crop mix to the limit of market quotes with the exception of the Easter crop and an option scheduled to bloom in the fourth week of December. The Easter crop is produced in 11.50 of the possible 15 units, and the December crop in 5.86 of the 6.00 unit quota. Table 25b specifies the number of units of all other Options in solution. Both level of return to fixed costs and weeks of bench time required are the primary factors influencing selection of crap options in the optimal mix. 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Market Options are met first in these Options. Table 25b specified marginal return (shadow price), weeks in bench, market quotas and units in the Optimal mix for all Options. Beyond these four Options, the quantity of an Option in the Optimal crOp mix appears to be determined by one or more of these factors: (1) the degree to which it does not compete with the four most profitable Options for the limiting labor resource, (2) number of weeks in the bench, and (3) returns to fixed costs. Input factors which determine returns to fixed resources include pots, soil, plants, heat and photOperiodic treatments. Only the latter two factors vary among the Options. 8 The pattern of labor use in potted chrysanthemums is characte- rized by peak inputs at time of potting, at disbudding (6-8 weeks before harvest), and at harvest. Minor amounts of labor are used when pots are moved from the "nurse" area to final spacing, at pinching, and during the period black shade cloth is pulled over crOps. Labor is the fixed factor which limits further production. The supply is exhausted in four of the 52 weeks. Tables 26 and 27 summarize use of the labor resource and specify marginal return for weeks in which labor is limiting. These prices range from $23.85 to $h5.25 per hour indicating that managerial action to alter availability of the 112 Table 26. Potted chrysanthemums: production periods in which labor is limiting and marginal returns for labor resource in those periods. Production week Marginal returns per hour of labor ($) Nov 2 h2.25 Mar 1 26.03 Mar h h1.3h Apr 2 23.85 Table 27. Potted chrysanthemums: summary of use of 600 hours/week of permanent employee resource. Excess labor capacity Number of weeks in year with excess (hours) labor capacity 0 h 1-50 2 51-100 0 101-200 2 201-300 h 301-h00 15 hOl—SOO 19 501-600 6 Total weeks 52 113 labor resource or to reschedule periods of its peak use would increase considerably use of both greenhouse production area and permanent employee complement. Returns to the use of these fixed resources thereby would increase. Greenhouse production area, the other fixed factor in the model, does not become limiting at any point. Range of use is from a maximum of 57,897 ft2 during the third and fourth weeks in March to a minimum of 16,500 ft2 during the fifth week of May. Pattern of space and labor use is shown in Figures 7 and 8, respectively. The potted chrysanthenun Optimal nix generates $179,365 19352 return to fixed costs per year, or $2.39 per ft2 of total production area. This mix yields _n_e_t_._ return (loss) to fixed costs, i.e. returns after fixed costs incurred to provide 15,000 ft2 of greenhouse produc- tion area and 600 hours of labor are deducted, of 432.109 or -$0.h3 per ftz. However, 1: the potted chrysanthemn program is charged the fixed cost for only the greenhouse production area actually used to produce the amount of the crap in the optimal mix, e.g. about 58,000 ft2 and for all 600 hours per week per year of permanent employee complement , then total return (loss) to fixed resources is 48,007 or 40.11: per ft2 per year. On the other hand, if prOportionately more hours of labor are provided to £111 the 15,000 ft2 of production area with the potted chrysanthemu- Optimal mix, total return (loss) to fixed resources is -31.,859 or 40.06 per rte. Production guidelines which emerge from analysis of the optimal crOp mix Within the range of the situation on which this problem is based, production guidelines for potted chrysanthemums may be offered. Static market returns through the year and relatively uni fem patterns of labor 11% SSE no.8 Hen—wane 5 eons 2032695 3.5583» "gaunosawhuzo coupon" 4. 95w: ,0 lm 10H Tma ION Imm Ion, 1mm lo: wcwuwawd unecoon uonna no?) as 350m as \hkusmoO poonswné 1| on R. 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Thus, profitability of a specific potted chrysan- themum option is essentially determined by season of the year in which it is produced. This suggests that an effective management approach to the year-round production of potted chrysanthemums is to plan some minimum level of production per week sufficient to maintain market posi- tion. Thereafter, an effort should be made to increase market demand for those production Options which yield the greatest return to fixed costs. These options will tend to be those produced during periods of minimal heating costs and the least amber of weeks in the bench. In the model, these conditions occur primarily in options planted in May, June, July and early August for bloom in late July, August, September, and October respectively. Comparison of Production Options for Geranium Geraniums are grown as potted plants for sale in May for garden and other outdoor uses. Some production is geared for sale at Easter and Mother's Dav, with a maJor portion timed for mid-May and Memorial Day sales. While the crap is grown in a wide range of pot sizes, as well as in packs and tubs, the 3: inch pot is the most cos-son container. Geranium are propagated from cuttings. Serious disease problems in recent years have led comercial geranium propagation specialists to 117 apply culture-indexing techniques to the crOp. They are now able to offer the grower disease-free cuttings with which to initiate his crop. This develOpment, coupled with new fast production techniques for the crop, has resulted in significant changes in the production schedules fOr geraniums. A grower may now produce spring-flowering geranium crops in numerous ways ranging from.10-month stock plant program as a basis for providing his own cuttings, to 6-8 week programs in which finished h inch potted geraniums are produced for spring sales from purchased cuttings. Further, there are Opportunities fOr buying and selling cuttings and started plants at a number of points in the production year. Figures 9, 10, 11 and 12 show how one maJor commercial geranium propagator has diagrammed and named the numerous production programs available to the geranium grower. Fer purpose of this study, these programs have been modified and expanded to include numerous additional options as described‘below. Geraniums gptions studied in the model All geranium options included in Figures 9-12 are available to the manager of the model in the study. Further, a number of additional options are included. A 25/1 option is added which allows fOr initiation of a stock plant program in mid to late September rather than in August as fer the toll option. The Opportunity is available to sell unrooted and rooted cuttings and started plants in 2% inch and h inch pots at nume- rous points in the program. Further, started stock plants in 7 inch and 12 inch pots may be sold at several points early in the program. Stock plants kept late into the production program may be completely 118 or... awn-E at. mafia .355 w x w as so... soon—m .v-«I noun: :2— re. 5 var—.3 xenon .300: use Jasmine.» am.— ..3: 5.3m 62.2: o x u 0.. have» 9.90: a 90st Jaw.- ..ouS. noon .3 5 Juan .aeuflov omw .nom Mason axon: xoqau one: Ioouon coda-wack— nau- gsua on»? msnw «Eu—.8 8n anus: £9593 a 3 a on: .355 w u 9 cu nous." ._ 81.» J:- ueuo: 32— ..a 5 aces: Jingle» Rm .3- .aflmoam 339.693 lie-hen muse-Ia coax—Ea eleven-noun Adagio :6 .o ring .82 as... .t. as. emletllao ...e.o.>BIo....2n .88 IE e323 \u RN." 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A "tree" geranium program is also available whereby stock plants are staked and grown in tree form. The purpose of this program is, mmugh frequent pinching and growth regulator treatments , to develop and store large numbers of cuttings "in the vertical" on the stock plant until they are needed for finished production Options. Stock trees used in this program are disposed of through sale as finished trees in May or are entirely cut up as a source of the final flush of cuttings. Market quotas are set for nearly all of the holidw options , and for the finished stock plant and stock tree options. The production unit assigned is 1,000 cuttings, started plants, finished plants, or stock plants. Prices assigned for the sale of each product are those current in the trade in 1970 and specified in Table 28. Terms used to define various categories of geranium plants and propa- gation material are defined here: Stock plants m be initiated from unrooted or rooted cuttings or started plants in 2% inch pots. The hall and 25/l options are potted directly in 12 inch clay pots. The 12/1 and 8/l options are grown in 7 inch clsy pots and the 5/1 option in 5 inch clay pots. Usual spacing commensurate vith size of pot and stage of development is provided. Finished crop! are produced fron unrooted cuttings stuck direct- ly in '1 inch clw pots under mist. February propagation are spaced pot to pot at the outset and spread to a final 6 inches by 6 inches spacing 1: weeks later. Propagations made fron March on are spaced imediately at 6 inches by 6 inches. 123 Table 28. Geraniums: market prices assumed in the model. ‘ w Type of plant material Price per unit of 1,000 ($) Per each ($) Unrooted cuttings 60.00 Rooted cuttings 130.00 Started plants in 2% inch pots 160.00 Started plants in 5 inch pots 300.00-h00.00 Started stock plants in: 5 inch pots h50.00 7 inch pots 700.00-2,000.00 12 inch pots . l25.00-3,000.00 Finished h inch geraniums for: Easter 600.00 Mother's Day $50.00 Garden sales 500.00 Memorial Day $00.00 Finished stock plants: 5 inch pots for: Garden sales 500.00. 7 inch pots for: Mbther's Day 2,000.00 Garden sales 2,000.00 Memorial Day $50.00* l2 inch pots for: Garden sales $00.00* 12 inch tree geraniums for: mother's Day and Garden sales 12,000.00 0.06 0.13 0.16 0.30-0.h0 0.50“ 2.00 2.00 0.55“ 0.50“ 12.00 “Prices for these Options erroneously set at incorrect low prices. 12h unrooted terminal cuttingg_are taken when 3 inches in length; 9:91 cuttingg are 2 inches long. Egrooted cuttiggg_are sold immediately upon removal from the stock plant. Rooted terminal cuttiggg_haye roots of at least 1/8 inch in length and are sold bare root. §§arted plants in 2% inch pots are produced by sticking an unroot- ed cutting directly in a 2% inch pot. The plant is sold h to 5 weeks . later depending on season of the year. Started plants in h inch pots are produced by rooting a cutting directly in a h inch plastic pot. The plant is sold 6 weeks after the cutting is stuck. Started stocképlants are stock plants which are generally grown on for 2 weeks after a given flush of cuttings is taken and then sold to another grower for stock plant purposes. Cultural practices used may be summarized as follows. Finished h inch pot options are grown at 65F night temperatures. Bottom best (751') and mist are provided during rooting. Soil mixture, renum- tion and irrigation programs are those generally recommended by suppliers and Cooperative Extension, and known to produce continuous quality growth. Essentially, the manager contemplating geranium production is faced with decisions concerning sources of propagation material as well as the form.in which he will market his product. The options are many and are strongly interrelated. Some require considerable inputs of greenhouse space and labor ; others require use of practically none of these resources. Hence, linear programming provides an effective means for analysis to determine an optimal combination of enterprises under a given set of constraints. “mu plan‘ cm; of t] CORGI 125 The Optimal crOp mix A total of 22h Options are available in the program for producing plant material with which to initiate the crOp, for production of the crOp, and for form Of product in which to market the crop. Eighty-five of the Options occur in the Optimal plan as listed in Tables 29-32. The Optimal mix is examined in terms of information it provides concerning several decision points in geranium production: 1. 3. 5. Should stock plants be produced, or should plant material be purchased when needed to start a crOp? If the decision is to produce stock plants, then in what form is the product to be sold: unrooted cuttings, rooted cuttings, started plants in 2% inch pots, started plants in h inch pots, finished plants? If the stock plant Option is adopted, what will be the final disposition of the stock plants: a) sold as started plants in 7 inch and 12 inch pots to other growers? b) grown on to sell as large finished blooming plants? c) completely out up into terminal and heel cuttings at the last propagation and dumped? If the decision is to not produce stock plants, then what type of plant material will be used to initiate production: unrooted cuttings, rooted cuttings, started plants in 2% inch pots, started plants in h inch pots? What mix of’markets should be developed, i.e. what quantity Of h, 7 and 12 inch pots and tree geraniums should be grown for ti st 126 Easter, MOther's Day, garden sales and Memorial Day? The Optimal mix Of geranium Options provides the fellowing infor- mation on these questions. Stock plant Options come into production in the 25/1, 12/1, 8/1, 5/1 programs and in the geranium tree program. The holl program does not come into the Optimal mix. However, the 25/1 program, a sub-program of the toll program which begins in mid-September rather than mid-August, and the 8/1 program another sub-program.of the h0/1 program, do come into solution in 9.1h units and 3.0 units respec- tively. The 5/1 program.which can be produced as a separate program started from cuttings or started plants in January, or as an integral part Of the 30/1 and 25/1 programs, has only 2.67 units in the Optimal mix. The 12/1 program contributes l8.25 units of stock to the mix. The stock tree program.is represented by 0.81 units which, while seemingly small in number of units, contributes considerable quantities of cuttings. All stock options except that fer the tree program fellowed a consistent pattern in the mix. Immediately after the initial yield of cuttings was produced, a quantity of’the stock plants, usually equal to the market quota fOr stock plant sales at this point, is sold. The unsold stock is transferred into the next production Option. Following the next yield of cuttings, an amount of the stock plants again equal to the market quote is sold, and the remainder transferred into the next production Option. In the 25/1 stock plant program, after fOllowing this pattern through the last stock plant sale Option, 2.1h units (2,1h0 12 inch pots) of stock are dumped. This indicates 127 that fOr this Option at least, sale of started stock plants is not the only purpose fOr production. The maJority Of cuttings prOpagated from stock plants is sold through Options other than finished h inch plants. In the Optimal mix, only 35.2? units, or 11.8}, are produced from cuttings taken from stock plants produced in the model. Stock plant Options then are programmed into the optimal mix primarily for the returns generated from the sale of prOpagative plant material, started stock plants and a relatively few units of finished product. Table 29 summarises the sales of prO- ducts from.stock plant Options. Sale of 13h.87 units (h5.71) of un- rooted cuttings represent the greatest quantity of any Of the products sold from stock plant Options. Rooted cuttings and started plants in h inch pots account for 35.7 (12.0%) units and started stock plants for 30.h8 units. Started plants in 2% inch pots account for the least with only 6.18 units sold. The third decision point listed earlier deals with final disposi- tion of stock plants grown in the program. In all Options, with the exception of the 25/1 program» all units of stock plants in the mix are sold either as started stock plants or as finished flowering plants. As previously mentioned, the number of units was at or very near the market quota established fOr stock plant and finished plant sales Options. In the 25/1 program, stock plants were sold to the limit of the market quotas and 2.lh units were ultimately dumped. The preceding analysis shows that the maaority (82.2%) of finished h inch potted geraniums are produced from plant material procured from other than stock plants grown in the model firmls green- houses. Sources of plant material with which to initiate finished .XfiE COMO Haw—CHORD 059 Ch ECONQQC HEHuHR omUCfiQ Elana-thown 50.5.“. UHOQ muQUZUOLAN -fiomw ...uNquS 128 00.00H 0».>H mm.a mH.0H :m.0m III oaon moans mmwpowomoam Hopop mo pooo mom 0:.0m m0.mm :~.Hmm mm.mm 0H.m mm.am hm.HwH hm.mm noowpmo Macaw Han Hopoa 0 H0. m0.m mm.wm 0.0 0.0 0.0 mm.0w Hm. anamonm some 0 pm. m 00.: 0m.» 0m.m 0.0 0. 0 0.0 m.m H\m 0 0. m 00.mm 0m.dm 0.0 0.0 0. 0 0m.mm 0.m H\w 0 0. pH 00.N wm.mm 00.ma 0.0 mm. m: :0.Nm mw.wH H\NH m.m : 00.: m0.mm m>.0: 0H.m 0. 0H 0.0m :H.m H\mm coward upoonI meow :: oaon HoHHopma upon =a npom =:\H N oopoom oopooama Nfia Hosanna ow amawoum mpoodm MoOpm ooSmHowh oopowomoam .oa madman oomumpm mmowppso mpooam xOOpm panda Macaw oopampw mowed Hence no mean: xOOpm .xfia mono Hmaapmo map ow moofipmo woman xOOpm amwoouom scum UHOm mpomooam .mm manna 8| DI 1: inch potted geranium programs are primarily from purchase Options and are shown in Table 30. Purchased unrooted cuttings account for the source Of 56.971 Of finished 1: inch geranium plants, purchased rooted cuttings 18.1“, purchased started plants in 236 inch pots 7.151 and cuttings from stock plants grown by the firm 17.171. The Option to purchase started plants in I: inch pots is not chosen. In producing finished 1: inch pots of geraniums, the manager has the Options Of seeling the crops the first week in Mu for Mother's Day, or he may commit them to garden sales comencing the third week in May. Several early production programs also contain an Easter sales Op- tion, and some of the later programs a Memorial Day (fifth week Of May) option. Table 31 summarises the distribution of finished crOps among these markets. Market quotas are placed on all Easter and Mother's Day Options but no limits are placed on garden sales options. The Memorial Day Option has a very high market quota of 200 units which is inserted as a programing precaution only. This limit is not met in that only 39.81: units are produced. The Easter and Mother's Day crop options are assigned a $0.10 per pot and $0.05 per pot price advantage respectively over the garden sales Options. All Easter and Mother's Day it inch potted geraniums are produced to market quota with the exception Of one Option within the geranium tree program. The marginal return (shadow price), i.e. the addition to the total return to fixed costs to be realized for the next unit to be sold beyong the limit set by the market quota, for Options with market quotas ranged from $13.87 to $151.90 per unit. 130 5.: ~0.mm 0.0 0.0 3.» maid :10." no.9” soon $.94 0.00..” 3&3 k 25.5 3.25 .w 5.25 m .325 M :35 F 33.5 3 menu a no” nos“ rm oouoom 00000.25 35% 5 35am uofiaam $338 xooun upon good a a 13:20 one-«EC 33.2002: Suassooum condone 3.25 .1509 Hortense 05.3 no common 29.2315 «5.3 no condo. an upon #03 a com-«mun «o 3.25 "ad—spec .0m 0390 clun- d3d3a. 0:0 :— fldavru no.0—a1 J Eu Ids-ids! 505.19.!“ a I! 15509 .HH. -dkd: ];3]. ..m . mad sm.oa so.os am.oa o so.o: so.oa o 0m . mwa 0m.m~n on .MNA 0 no.3 no.3 0 0rd.- 0~.~._ 0 3.0.. 3.0.. 0 m: an 9.4m 0 00 b 004. 0 00 m 00.“ 0 we on 3.0." 0 00.: 00.3 8.0 00.: 00.N.n 0... A3 313 .h ...- a a: .a . .. 2:0: 0.3.5 53.30.:— «300. 000000 30090 H300. 0.5090 oak—0:0 «309 34 001.3! 001.3! annual annual .3000. 030033 5; 0:05.; .3; ”<0 0509.8. mus—<0 many—<0 inch—:0 3a.! 7009 «32. Cam g 1203: .038. 1009 N a :3 gov n a a .28 some» sound... «.0 :13: 0.3 .7009 «.0 8.00.— 0.« as? 00.5 2.50m 0... 309 0043 0.~ « 0043 0d a Qua 00.03 0.3 .708. 543 0.0 w «0.2. 0.~ a 362 0.~ a 5.00.— 0.~ n 3.0.3 0.0 a 3.0.8 9m a «Ru '0 0.0238- gov 0... 0 0.: m 0.0 0 00.an 0.0 « «RN 0.m 0 3.9 0.~ wean-a 0.35. 3.! 03.3 0.3.! 03.! was I «I. . .u _ . 839680 .3050 0030 030.6 H309 .3090 03.3 aeoos. «one. .6018 annual commas so: venues £85; a»; 002.30 5:. :0 0.55.9. g .5... 1138 25 5 Eon =2: ._ 5 353 03.30 “lac-nee . 3 Soon. 132 Finished sales options in pot sizes larger than 1: inch are shown in Table 32. Market quotas are placed on all of these options. Only 7 inch potted geraniums for Mother's Dav sales are produced up to quota. The only others Of these options to occur in the Optimal mix are 7 inch pots for garden sales and 12 inch finished tree geraniums for Mother's Day. Substantial marginal returns are reported for two 7 inch options. Table 32. Geranium: finished Options other than in 1: inch pots in the optimal mix. Option Units Market quota Marginal (1,000 pots) (units) returns (3) 5 inch pots for garden 0 200.00 sales 7 inch pots: 0 .50 Mother's Day 2.00 2.00 1,237.95 Garden sales .50 .50 935.29 12 inch pots: 0 .25 Trees - Mother's Dc .81 1.00 Trees - Garden sales 0 1.00 The use of greenhouse productia: area and labor by the geranium production option is shown in Figures 13 and lb respectively. Maximum area in production (68.53) is the third week of April; minimum occu— pancy occurs for the period covering the months of Jme, July, August and the first week of September when space used ebbs to 0.h2%. Labor supply limits further use of greenhouse production area. Weeks in which labor is exhausted are shown on Figure lb. Labor use is su-arised in 133 .02"! mono 3000 5 00.3 003260.:— oesomoofluw "guinea .2 our»: 0 in ..S In row m ...m 10m Inn '01“ 331: 3 no.3 62.. e. 352— ..e .. a. ) 3803 0332: w. I R m Imam f3“ Inw( \330000 line-z I 2. up namwdamwdamwdnammdanwd nammdnwdmammdamwamamwd anmdammn 9.2 .50 .50 x<= s g a .5. 86 >0. 5 an sommous AUG .V‘JL JUN MAY AP" MAN F In: 131% .52. no.3 3.30 a.“ .6333: 3.30»: 005398 wagon "sundae .3." 0.53m fl \glda 4‘ A. ‘ ‘ 4‘ “‘J1 ‘ -' u ammuammaammam ..m «Hamwmngmmamman nMHflmmamanwaammaanua 22 a2. 3:. a! an: .2: at 5:. can 8- 8o mum '-”’ 6mm $5.35: am .39: no?) 3 .300: a. do»: .33 gm .- Ta 135 Tables 33a and 33b. The pattern of labor use for geraniums is similar to that for most potted craps. HeaNy labor input occurs in the propagation operap tion, at soil preparation and potting, in spacing pots, and in the sales operation at harvest. These are the operations in progress at those points in the production progran.vhen the labor supply becomes limiting. Total returns to fix resources fOr the geranium Operation are $116,288.66 or $1.95 per n2 of greenhouse production area. net return to fixed resources in this situation after fixed costs of $3.31 per hour for labor and $l.h5 per ft? for greenhouse production space are deducted is -$65,785.3& orr$o.88 per ft2 of production area. Table 33a. Geraniums: production periods in which labor is limiting and marginal returns fer labor in these periods. Production week ‘Marginal returns per hour of labor (3) Dec 7.92 8.87 Jan 9.02 25.66 lh.3h 2051‘ Feb 11.50 5.71 15.13 19.68 18.75 1h.83 13.08 on WP “3'me w." rm PM 25.01 136 Table 33b. Geranium: summary Of use Of 600 hours/week Of permanent employee resource. Excess labor capacity [lumber Of weeks in year with excess labor capacity 0 ll: 1-50 1 51-100 0 101-200 I: 201-300 2 30l-h00 3 1001-500 6 501-600 22 Total 52 Production guidelines which steam fron angisis Of the optimal crop mix A nuber Of production guidelines m be identified within the limits of the situation analyzed: 1. 2. Long-tern geraniun Options , i.e. those involving stock plant production, make most effective use Of fixed resources vhen‘ used to produce cuttings and started plants for sale tO other producers. Among the stock plant options in the mix, the 12/1 progran vhich is started in early love-her is progra-aed in the great- est nuaber Of units and is the nest productive of cuttings and started plants for sale. This Option apparently utilises the available fixed resources of labor and greenhouse space more productively than the longer-term though twice as produc- tive 25/1 stock plant option. Similarly, the 25/1 Option comes into production over the longer term 150/1 Option which does not 3. 13? appear in the Optimal nix. This suggests that the long-term stock plant Options while very productive of prOpagation material do not nake as efficient use of fixed resources as the shorter-tern 12/1 Option. It is interesting to note that one Of the main advantages suggested by suppliers for the long-tern Options is that a late summer start builds a stronger more productive stock plant. Apparently this valid cultural consideration is counterbalanced by the econaaic aspects Of the shorter-tern 12/1 program. The relatively few finished plant Options produced from progress which involve stock plant production are prOpaga- tions made in mid-February and for the most part in March. The latter are the final flushes Of cuttings before stock plants are sold or discarded. Further, two Of the Options propagated in February are for Easter and Mother's M sales when a premium is applied to the sale price. Essentially, the tendency is for few finished Options to be produced fran stock plants, and when such Options are progrmed, they tend to be the final prOpagations as well as propagations for which price premiums exist. The majority Of finished 5 inch geranium Options for Mother's Dc, Memorial W, and garden sales are produced in the 6-8 week Options begun directly fru purchased cuttings or started plants. This suggests that the grower whose primary geranium markets are for finished plants is best advised to use fast- crop Options grown fron plant naterial purchased for delivery 5. 138 on or near the starting date Of those crOps. There seems to be little to be gained from.the production Of stock plants primarily as a source Of prOpagation material for one's own finished geranium programs. Geranium.growers Often advance the suggestion that starting material for finished crOps should be purchased early enough tO allow for the removal Of one flush of cuttings from the crOp thereby doubling the quantity produced from the purchased cuttings. Only one such Option is programmed in the optimal mix. The preponderance of finished Options is produced digest? lz_from.purchased unrooted and rooted cuttings fromlwhich no cuttings are taken during the production process. Under condi- tions where the lcbor resource is limiting, as is the usual situation in floriculture firms, the choice Of'these latter Options makes fOr a.more lcbor-efficient Operation. And, under this lsbor situation, savings in the cost of cuttings made possible by harvesting a flush Of cuttings from.the starting material apparently does not compensate fbr use of additional lcbor. Direct potting of unrooted cuttings in h inch pots appears to be the most efficient means Of initiating finished h inch geranium Options. Rooted cuttings and the use of started plants in 2% inch pots are programmed in the Optimal mix in considerably lower quantities. Started h inch pots are not purchased as starting material for any Option in the mix. These results indicate that the returns tO the grower fOr 7. 8. 139 use of his lcbor and greenhouse space to produce geraniums from unrooted cuttings to the started h inch pot stage is greater than that which would accrue from the purchase Of started h inch potted plants. For the grower who engages in production for sale Of propagap ting material, unrooted cuttings appear to represent the most favorcble form.in which to market his product. Thereafter, rooted cuttings and started h inch potted plants Offer about the same advantage. Started plants in 2k.inch pots appear to be a relatively inefficient fOrm in which tO sell propagation material. This latter Option requires labor inputs approach- ing those for the h inch potted Option but returns substan- tially less income. while space requirements are considerably less, under a situation where lcbor is the limiting factor, the h inch potted option is likely to represent more produc- tive use of the lcbor resource. Similarly, the sale of rooted cuttings requires almost as much lcbor input per unit as does the production Of started plants in 2% inch pots, but revenue from the latter is not substantially greater. Hence, rooted cuttings are programmed over the 2% inch potted Option in the Optimal mix. The sale of unrooted cuttings requires use of no greenhouse production area and less labor than the other Options. While revenue per unit is less than oneahalf that returned by other Options, the relatively low demand Of the program for fixed resources makes it an attractive option. As expected, Opportunities to sell started stock plants at 1.1.0 various points in the production regime contribute substantial- Lv to the manager's programing flexibility as well as to the profitability Of the stock plant Options. In industry, this is a rare practice. The solution would indicate that it is a marketing Opportunity worth exploring for the manager inte- rested in use Of stock plant Options for at least some portion Of his geranium program 9. The geranium stock tree program as a means of producing prOpa- gation material for sale cases into the Optimal mix in relati- vely substantial quantities. This is somewhat surprising when one considers the space and labor inputs required by the prO- gram. However, productivity Of cuttings is substantial. It should be noted that it was possible to examine this progrms only in a somewhat more general manner than for the other geranium programs studied because so few producers use it thus making sources of data sparse. Further study Of this program is merited. S Of ction delines for ranitlms Several conclusions emerge from this analysis Of geranium produc- tion Options: 1. The production Of geranium prOpagation material for sale to other growers Of finished plants, and the production Of finished flowering geranitns in h inch pots for spring sales emerge as essentially two separate production enterprises. The Optimal mix indicates that when a grower engages in stock plant production, his primary revenue comes from the sale of 1’41 prOpagation materials. Relatively few units of finished 1: inch pots are sold in this program. On the other hand, the majority Of finished h inch potted geraniums for spring sale programmed in the Optimal mix are produced from purcha- sed unrooted cuttings potted directly in the finishing pot. 2. Long-term stock plant production programs appear to be less efficient in producing prOpagation materials for sale than somewhat shorter range though less productive programs . 3. For the producer of prOpagation materials for sale to other growers , unrooted cuttings are the form of product which appears to be most efficient in use Of fixed resources and most profitable. Sale of started. plants in 2‘»; inch pots is least efficient. ‘ h. The sale Of started stock plants at various points in the pro- duction program Offers the producer the Opportunity to subs- tantially increase his revenue from the use of fixed resources. In that this is not a common practice in the trade, there would appear to be market potential here. However, more detailed stun Of this Option is warranted. Comparison of Production Options for Poinsettias The poinsettia is the traditional scarlet potted plant Of the Christmas season. Finished plants are produced for sale beginning in earlv to mid-November and continuing through Christmas. The finished product takes many forms; the moat canon are individual single-stem and pinched plants grown one plant to a pot of the size range of 3 inch l 11:2 to 8 inch; 3-6 single-stem plants in 5, 6, 7 and 8 inch pots, and large specimen plants and trees in 10-12 inch pots and containers. A poinsettia producer uses one or both Of two basic production programs for the crOp. One option is to grow the cuttings required to start his finished crOp through a stock plant-prOpagation-finished plant program, herein after referred to as a. stock plant program. The other Option involves purchase of cuttings or started plants with which the finished crap is directly initiated, herein after referred to as the bmr-plants program. In the stock plant program, the producer purchases started plants from one Of several national propagation firms at some point between March 1 and June 1 Of the year in which he will market finished poin- settias. The started plants are rooted directly in 10 inch pots and grown as stock plants from which cuttings are taken in mid to late stunner. The earliest cuttings may be used to establish sub-stock plant programs, or sold to other growers who wish to do so. An additional Option is Open tO the producer on a stock plant program. He may Operate sufficiently large stock plant program tO allow him to sell cuttings and started plants to other producers Of finished plants. PrOpagations for the Christmas finished crop are generally taken late August through mid to late September. Thereafter, the stock plants are discarded although some Operators will carry a small portion Of the plants through to Christmas bloom and sell them as large specimen plants and trees. However, there is a limited market for this product primarily because of size and price. In the bw-plants program, the producer of finished plants simply 1&3 buys the required number Of started plants in 2% inch pots in the Sep- tember week in which his finished plant programs commence. Planted directly in the container in which they will be sold, they are grown for the September-early DeceMber period at the end Of‘which they are sold as finished plants. Poinsettia options studied in the model The manager in the model may use any Of the production Options shown in Figure 15. Included are a stock plant program initiated in the first week Of June which yields cuttings which may be sold as rooted cuttings or used by the producer tO initiate his own finished plant program in September. Host of the finished Options are propap gated directly in blocks Of’medium (BR-8 blocks) which are then planted directly into the pot in which the plant will be finished. One option is propagated by sticking an unrooted cutting directly from the stock plant into the h inch pot where it will root and develOp into the finished plant fOr sale. This laborbsaving technique is being used increasingly in the industry. At the conclusion of the stock plant program, the manager in the model may retain up to 0.25 units (250 plants) of stock to grow on fOr sale as finished plants fOr Christmas. The small stock plants used in the sub-stock plant program may be sold as started plants to other growers or grown On for sale as a finished 6-bloom.pinched plants in a 6 inch pot. Numerous buy-plant Options are also available to the manager in the model, all Of'which initiate finished plant programs during the first and second weeks Of September. The finished plant Options are described in Figure IS. Pinched.multiébloom plants are a recent trend made possible by Key to Figure 15. lhha Poinsettia production and marketing Options. Code A cemwpwozzrrsue‘mowmuow Description Buy started plants in 2 l/h inch pots; repot in 10 inch pots to initiate stock plant program Take cuttings, root in peat blocks Sell unrooted cuttings Take cuttings Sell started stock plants Dump stock plants, retrieve containers Buy started plants in 2 l/h inch pots Pot l started plant in a 6 inch pot Take cuttings, stick direct in h inch pots 1 plant, h inch pot 2 plants, 5 inch 3 plants, 6 inch h plants, 7 inch 5 plants, 7 inch 6 plants, 8 inch Pinched, 1 plant h-blooms, h inch S-blooms, 6 inch 6-blooms, 6 inch heavy 6-bloom, 6 pot pot pot pot pot pot: 3-blooms, h inch pot pot pot pot inch pot Sell finished blooming stock plants in tubs .I.1w..—E. Alioélas Id fituJ-GCacq—u. (To sale- lhhb Home! 0.3 cu manna—3s coca—mo mamas—med use macaroni.— ”mouse-=30.“ O. O.fl I O O: O ‘ “OJ” .H seamed. 3M+ can maamfim G O.N.H “Owl“: O B I 3.3 “.3. .3 o G.@ G O Ac¢.N .NH O . F O 2 — .o.c n.n~ «Ow 0.0N noose mamas: ‘ 3. o “2.3 o.% soon so.“ someones - 13.—no.3 cacao 5333592? Anmmm 8.: Smears»? 33238 cu naussv mm sauce 5 a2..«floe¢:..d.o.a: Ha. .3 use: FINN E HNM sham mama use. nu Ill lhs new selfAbranching cultivars. The more traditional method Of develOping multiflowered poinsettia plants, i.e. planting of two or moze plants in a S, 6, 7, 8 inch or larger pot, is also available to the manager. In this approach, each unpinched plant produces one large flower; with several plants in the pot the "multibloom" is produced. Offering Of both Options to the manager in the model provides an Opportunity fOr compa- rison Of the two production techniques. Wholesale market prices and market quotas for each Of the finished plant options are detailed in Table 3h. The pinched finished plant Options are assigned a lower market price than their counterpart multi— plant pots with comparable flower count. This reflects current practice in the industry. Poinsettia Options in the Optimal mix The poinsettia program‘which emerges as the Optimal mix is shown in Figure 15. It contains both stock plant and buy-plant options. However, the ratio of number Of units Of finished plant Options produced via the stock plant program to those grown from‘buy-plant Options is about 3 to 1; the ratio based on dollar contribution to gross returns tO fixed costs is 1.56:1.00. A total Of 52.00 units, or 52,000 rooted cuttings, are sold from.the stock plant program, as is the market quota Of stock in the sub-stock plant program, i.e. 2.0 units or 2,000 plants are sold as started poinsettias in 6 inch pots in early September. The full quota Of finished stock plants, i.e. 0.25 units or 250 plants are sold as finished plants at Christmas. The remaining units Of stock plants are dumped and the large 10 inch pots in which they grow salvaged. 1&6 00.0»0.m 00.H 00.H 00.0 000.0 0 madman 0 0m.m0~.m 00.m 00.N m>.: 0m~.: P mumnam m H0.mm0.m 00.m 00.m m~.m 0m>.m b magmas : 00.0 oo.ma ow.m oom.m 0 messed m o 00.0 om.a cow.a m massed m 0 moon m>.0 0m~ : panda H "Boom mammam m0.a00 00.NH 00.mH mm.a 0mm.a : aooanlm 0m.m>z.a 00.0H 00.NH 00.m 000.m : sooanlz 0H.N~m.a 00.0 00.0 0m.m 00m.m 0 EOOHQI0 mp.::0.a 00.0 00.0 Om.m 00m.m 0 aboaplm mo.ma0.a 00.0 00.0 mm.a 0mm.a : aboapnm 00.0 00.0 0m.m 00m.m 0 aooap|0 .h>noa “pom mom nomad H .poaoowm 0H.0Hm.oa mw.o mm.0 00.NH 000.mH pop noooos H mpsnam Moose mafiaoaoam A00 Ampom nos“ 0 opomd mom, 000qa mo Amonomwv oompmonmoao momma 000.H mo meansv woman: mom a was: mom 0 mean 909 seesaw Nae Heaapmo mOHam woman: mammoaozz OHpmnHm .caom mmapfipmdsv can mnvodd peruse .moowmm unmade oHnmmHons "massed nonsense .msappomaaom .am manna 1h? The poinsettia Optimal mix generates $129,333 total return to fixed costs per year, or $1.72 per ft2 of total production area. This mix yields net return to fixed costs, i.e. return after fixed costs incurred to provide 75,000 ft? of greenhouse production area and 600 hours Of labor for 30 weeks are deducted,of $6,350 or $0.08 per fta. However, if the poinsettia program is charge the fixed cost for only the greenhouse production area actually used tO produce the amount of the crOp in the Optimal mix, e.g. about 56,000 ft2, and for all 600 hours per week Of permanent employee complement, for only the 30 week production period, then net' return to fixed resources is $22,909 or $0.hl per ft2 fer the period. On the other hand, if prOportionately more hours of labor are provided to an the 75,000 ft2 of production area with the poinsettia Optimal mix, net return to fixed resources is $30,676 or $0.55. Greenhouse production area is never limiting in the poinsettia situation. Available labor does limit further greenhouse space utilization in the first week Of’June when the stock plant potting Ope- ration is done, and again in the second week Of September during the height Of the finished plant propagation and potting Operation, and the selling of started stock plants in 6 inch pots. Marginal return fer the labor resource in these two weeks are $37.71 and $h6.l9 per hour respec- tively. Although it does not become limiting, labor supply approaches exhaustion in the third week Of September fer the same reasons as in the second week of this month. Figures 16aand ledepict greenhouse production area and labor use respectively through the poinsettia cropping period. Analysis Of the Solution The stock plant Option enters the Optimal program because of plentiful labor and space resources available June through August. The 1148 .3! no.3 Has-3A0 5 can: some saves—6.3 0855.095 "sqaaoncuom .s0a sham: 0 on o a”. are fitnesufie sooom v m I 3 m I ma 0.. m rl O m .l MN m T. l on m T mm W .. 3 .r I .9. S acumen solo-«.28 anon now 35.3 10m m . 3033 cocoons 352: ..o 38 J J. a :3? m 353 eon-«e2 a. one. ( oooeaa coats...- es. escapes... sod 2.93 so 83262.. :8 no case one 33260.3 £33 3030 053a: an nomad no?) 5 axons ue In0 33:33 to» \ heavens". and: cavemen—Om.— IJF 2. «inma emuHammoncnddefiwamlmmanmawemmaanman an“: anthemum Se n2. :2. as. 52 as. a: 5:. 8e 8.. .So mum 119 .3! 00.3 Hsmuuqo 5. 003:»: seasons.- eohodulo unconfined "oaaooncucm .o0H 0.30: 0 T 0: I000 33300 panda T oma commas: no oozes—5E .- 00H . W 1.00mnm acouuao mono oceans: no I 05.5.:— d sogsmsA—Oaa r. cam m amomo suauencwom I 00w ) eon-«5a do ones a |.0~mmm r. 8m m T 00.. r 3.. u 8.. mogul: nu nosed couch mu amour at r can r 00m 33:33 nosed— mOOaa 3.32509. 83%an conceded conscious 80 {nemuafimmwaanmunamwaamWananmanaanammaamaanammaamwaan Ma :3 .Su :2. as. .5 52 Ba 5:. use so: ...8 sum 150 quantity of stock plants is determined by the availability Of planting labor the first week Of June. Once this limit is met, the abundant labor and space resources available in August are used to prOpagate those cuttings available from stock plants the third week of July and to grow them to saleable 2% inch potted plants, rather than sell them as unrooted cuttings. However, cuttings available from the stock plants in the second. third and fOurth weeks of August are fOr the most part used to produce finished plant options initiated in the first three weeks Of September. The only portions of the prOpagations sold for other purposes are 15.13 units of those propagated in the fourth week of August which are sold as rooted cuttings in the third week of September. These likely are sold after the finished options available for initiation in third week Of September are filled to market quota. Apparently, this prOpagation- tOLsell Option represents efficient use of space and of the small amount of labor still available during these weeks when labor is approaching the point Of limiting further activity. Finished plant options produced from cuttings taken from the stock plant program predominate in the optimal mix. These options include the 3, h, 5, and 6 plant per pot options, and.the 3 and h bloom pinched plants. Further, all options are produced to the limits of the market quotas except fer the 3 plants per 6 inch pot Option which is pro- duced from the stock plant program in an amount Just less than oneéhalf of its quota. However, the quantity of this Option produced is increased to about three-fOurths Of quota through the purchases of 12.51 units of started plants. The pinched, mmltibloom, single—plant per pot Options are all produced to market limit. The single-stem, multiplant per pot option 151 are produced only in the tap three Of the five grades available. The tOp two grades are grown to the limits Of the market quotas. The middle grade, 3 plants in a 6 inch pot, is produced in about three- fOurths Of its market quota. The lowest two grades Of the latter Option are not in the Optimal mix. The lowest grade, a lehloom plant in a h inch pot, is priced $0.50 less per pot than is the 34bloom, pinched plant counterpart. There is no 24bloom.pinched counterpart fer the lAbloom, 2 plants per 5 inch pot Option, but it is priced $0.25 higher per pot than is the 3 bloom, pinched plant in a h inch pot. Started plants are purchased fOr finished plant Options only in the second and third weeks of September. Slightly more than oneAhalf of the finished crops so produced are of the 3-sing1e-stem plants per 6 inch pot Option. As mentioned earlier, the remainder Of the market quota for this Option is produced from cuttings propagated from the stock plant programt The 5 and 6 bloom.pinched plants in 6 inch pots are produced to their market quota limits from.purchased started plants. Started plants purchased in the third week Of September are used to produce finished pinched 3~bloom plants in h inch plastic pots. The pinched Option which utilizes direct sticking Of one cutting per h inch pot to produce a 34bloom plant is produced to market quota. The market price assigned is equal to that fer a comparable plant pro- duced in the traditional manner. This Option Offers a relatively low labor requirement fOr initiation in the first week Of September when labor is not taxed. Further, it eliminates the need fer propagation space and fOr some of the labor associated with propagation. 152 W of production guidelines for poinsettias These guidelines for poinsettia production emerge from the analysis. 1. 2. Both the stock plant program and the bmr plant Option are profitable means Of Obtaining started plants for the produc- tion of finished poinsettias. The stock-plant program uses greenhouse production area and labor during the smnmer months when the supply of these fixed resources is relatively more available. Further, the stock plant program Offers great flexibility through the numerous Opportunities for the sale Of unrooted and rooted cuttings and started plants in 21.; inch pots. Given a more abundant labor supply in key weeks Of the sunmer months , returns from the stock plant program would likely increase significantly because the space resource is available. The bw-plant Options on the other hand Offer the Opportunity for the manager to allow another firm to make labor inputs into the prOpagation phases during key periods in the sinner months, and in the second and third weeks Of Septem- ber when his own labor resource is limiting. In this way, the manager is able to initiate programs to use labor and space which he has available in October through December. Finished plant production appears to be somewhat more effi- cient in use of resources when initiated from cuttings produ- ced from the stock plant program. These Options occur in a 3:1 ratio Of stock-plant-initiated Options to big-plant Options, and in a 1.56:1.00 ratio on the basis of contribution to total return to fixed costs. 153 3. The continuation of stock plants fOr sale as large finished 5. specimen plants at Christmas appears to be profitable within the limits of the market quota of 250 plants. The price for the next unit to be produced if the market quota did not exist is $10,916.16, or about $10.92 per 10 inch plant. This shows a return Of nearly the full amount Of the $11.75 per 10 inch pot gross return to fixed costs possible. Given the necessary labor and space resources,production Of at least another 1,000 plant unit would be profitable. However, market development would be necessary to expand the demand for these large plants. The new technique Of sticking unrooted cuttings directly into the pot in which they will develop into finished plants compe- tes efficiently fer fixed resources with the traditional pro- pagation programs. The techniques were compared in the 34bloom per pinched plant, 1 plant per h inch pot Option. Both Options carry the same market price and.hoth had market quotas Of 6 units. Shadow prices, i.e. the amount by which net return to fixed costs would be increased by production of the next unit beyond market quota fer the direct-stick and traditional propagation techniques are $1,619.08 or $881.82 respectively. This indicates that the direct-stick program has considerable advantage over the traditional method. The lower labor and space requirements are its primary advantages. Pinched, multibloom finished plant Options appear to utilize labor and space more efficiently than do the single-stem 15h multiplant finished Options, even though the latter are given a considerable market price premium. The requirement for two to six fewer starting plants per pot depending on the Option, combines with the considerably lower labor requirement and the somewhat lessened space requirement to overcome the price dis- advantage. Within the finished plant options the top grades appear most profitable. The shadow prices fer the Options as shown in Table 3h indicate that the largest plants are the most profi- table under this situation, and that contribution to profits declines as grade drops. However, it should.be noted that market demand for the largest sizes is definitely limited. The typical poinsettia crop, the one available in this situas tion, requires mador labor inputs when planting stock plants, when propagating cuttings and started plants either for sale or use tO initiate finished crops, and when initiating finished crop Options. CrOp harvest, the other maJor labor-requiring Operation, does not present as great a demand upon the labor resource as do these Operations. 155 The Diversified Crops Program The diversified crOps program stw conducted using the model is designed to determine the most profitable combination of crap enterpri- ses and of Options internal to these enterprises from among the nine crOps specified in Chapter II. he fixed resources of the model are as specified in Chapter II, e.g. 75,000 square feet of greenhouse produc- tion area per week and 600 hours per week Of permanent employee labor. Limitations in the number of units of some crOp options are imposed based on quantities the market will absorb. These market quotes are also specified in Chapter II. The crOp enterprises and Options are detailed in Table 13. The production techniques and programs for the crOps analysed separately in the previous section of this chapter are the same as described there. Production techniques and programs used in the analysis Of roses occur later in the chapter, while those for bedding plants and Easter lilies follow imedi ately. Bedding Plants In recent years demand for bedding plants has greatly expanded as increased concern for environmental quality has emerged. In this same period, production of bedding plants has become a specialised operation; many firms produce bedding plants January through May and no other crOps during June through December. This is especially true of those growers who Operate vegetable farms during the summer months. A usual rotation Of activity for these Operations is to 156 produce bedding plants January through May , grow outdoor vegetable crOps April through October, and prepare plastic greenhouse and growing medium for the bedding plant Operation September through December. Others , both vegetable farmers and florists, use a rotation Of bedding plants followed by poinsettia production June through December. Some glasshouse Opera- tors combine only a few bedding plant Options such as potted petunias, marigolds, impatiens, begonias and tomatoes in their regular florist crOp rotations , while others employ both potted and flatted bedding plants as a major part of their rotation. Consequently, it is diffi- cult to characterise the exact nature of this enterprise as readily as that for most other crOps. Both flower and vegetable plants are considered bedding plants by most producers. The crop is grown January through May for sale primarily in May for garden purposes. They are grown in plastic packs which in tum are carried in plastic trays. Some also are grown in pots both for sale in early May for Mother's Day as well as for later sales for garden purposes. 'dhile bedding plants are produced in both glass and plastic greenhouses , the latter greenhouse covering annually accounts for an increasing percentage of the production area. The plants in trays are generally grown directly on the greenhouse floor with minimal aisles. The highly mechanized prOduction Operation eliminates the need for direct access to the flats. Potted bedding plants usually are grown on greenhouse benches although some producers grow them in flats on the floor at least during some stages of production. Nearly all bedding plants are started from seed. Because Of the high labor input required for transplanting seedlings from the tray 157 in which they are germinated to the packs and pots in which they are finished, producers are increasingly interested in perfecting methods for germinating seeds directly in the container in which the plants will be sold. Direct seeding is used successfudly for some species including alyssum, marigold and tomato. Producers who use this tech- nique generally grow extra plants with which to fill gaps in pots and packs where direct-planted seeds fail to germinate. Beddinguplant production options included in the model There are literally hundreds of species Of flower and vegetable plants which are grown as bedding plants. For purpose Of this study, only a sampling Of the maJor species is included because Of time and program limitations. In the model, the bedding plant Options described in Table 3iiare available. During the maJority Of the production period, a unit of potted plants occupies 250 ft2 of greenhouse production area; a unit of true requires 31:0 ft2. Some variation in spacing during the early periods of’the options results from variable growth rates among the crops. Seedlings for use in transplanted options are germinated by the producer. In direct-seeded Options, additional seedlings are germinated for use in filling gaps in pots and packs by transplanting. Easter Lilies Easter liliesgproduction options Easter lilies are produced as potted plants fer the Easter season. The crOp is initiated from‘bulbs grown on the west coast of the United States the summer‘befbre they are flowered in the greenhouse. The bulbs are dug in September and OctOber and either stored by the supplier, or shipped to the greenhouse producer depending upon the production Option he chooses. 158- nu ma mu Om on ha a. .d I. 8...»...I.I.Ia§._~u norms: no 1002 zones on ulna a-“ an: a-“ as: aIa as: a-“ as: .1 3. «In as: .13. NIH as: «Id but a as! 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Bulbs are shipped directly from the field to the greenhouse Ope- rator who pots them.the third week in September and places them in a 63-651? bulb room for 3 weeks for root system develOpment. Thereafter, the temperature is drOpped to 35-hSFdepending on the cultivar to provide the precooling or vernalization necessary fer the plant to complete developnent to the point where it will respond to greenhouse production regimes. The CT? technique generally produces a sturdier plant with considerably higher bud count than bulbs given the vernalization treat- ment in the packing case. Home case-cooled or non-pre-cooled method (UPC) Bulbs are shipped directly from the field to the greenhouse producer; he places them, still in the cases, into refrigerated storage at 35-h5F depending on the cultivar fOr at least 6 weeks to achieve vernalization. Commercial case-cooled or precooled method (PC) The bulb supplier provides the 35-h5F storage in the cases prior to delivery to the greenhouse producer. Under this system, bulbs arrive at the producers having had vernalization treatment and ready to pot. Another factor which determines quality , height and bud count of the finished lily plant is the size or grade of bulb. Lily grades are based on circumference of the bulb in inches, and the larger the bulb, the higher‘will be the bud count and the more vigorous the plant. The grades most commonly used in greenhouse programs are 7/8, i.e. bulbs 7-8 inches in circumference, 8/9, 9/10, 10/11. Larger and smaller 163 grades are available but not commonly used for the maJority Of a potted crOp. A typical potted Easter lily greenhouse production program commences in mid-December. Bulbs in the controlled temperature fOrcing (CTF) program are already potted and are moved directly into the green- house. The non-pre-cooled (NPC) and pre-cooled (PC) bulbs are brought from.storage, potted and placed in the greenhouse. The crOp is then grown for sale the week prior to Easter. Of course, the date Of Easter Sunday varies annually between mid-March and late April. For purposes of this study, Easter is assumed to occur on the second Sunday in April, a relatively average Easter date. There is a trend in industry fOr growers to purchase started lily plants from other growers at various points during production. This practice enables the initial producer to start more plants than he will be able to finish because of the need to give the crOp greater space as they develOp; the secondary producer has the advantage of not haying to make the heavy labor input necessary to initially store, pot and move the crop to the greenhouse. Lily,options available in the model Options available in the model are arrayed in Figure 17. The manager may choose among three bulb storage Options: CTP, NPC, PC. The production program is divided into Phase I, the third week in December through the first week in February, Phase II, the second week in February through the first week in March, and Phase III the second week in March through the first week in April when finished plants are sold. At the beginning Of each production phase, the manager has léha Kg: to Figure 11. Easter 11;! production gfiions %ima1 cr§2mix Market auota Code Description 10 ll 9 10 9 T 10 ll_9 lo /9 T A C.T.F. storage 16.00 10.15 0 0 B E.P.C. storage 0 0 0 0 C P.c. bulbs arrive 0 0 O 0 D Production phase I initiated: - l.P.c. and P.C. bulbs potted - greenhouse 0 0 0 0 - C.T.P. bulbs, storage - greenhouse 16.00 10.15 0 0 E Sell started plants Feb week 1 3.002/ 0 o o 3.00 P Buy started plants, / Feb week 2, P.C. o o 6.16 5.009- 10.00 5.00 6 Production phase I 13.00 10.15 6.16 5.00 B Sell started plants Mir week 1, c.'r.r. 3.00-‘1 3.002/0 o 3.00 3.00 I Buy started plants Mar week 2. P.C. o 0 10.009/ 5.005! 10.00 5.00 J Production phase III 10.00 7.15 16.16 10.00 K Sell finished plants in bloom, Apr week 1 10.00 7.15 16.16 10.00 &/ Market quota achieved. 16hb SEP 3 NOV DEC DEC ford\n L__.. DEC 3 FEB 1 I E l MAR 1 l H l‘ APR 1 APR 1 Em for—I r- _1__ Figure 17. Diversified crops program; Easter lily production and marketing options available; Options in Optimal mix. 165 the Options of keeping or selling some of all of’hia started plants and/ or buying started plants. These alternatives make possible grower entry or exit from lily production at a.number of points between the third week of September and the second week of March. Once he commits to produce in Phase III, the only remaining Option is to sell finished plants fer Easter. The producer is also given the Option of selecting among bulb grades 1/8, 8/9, 9/10, and 10/11 within any Of’the production options. Cost of bulbs and started plants, and selling price of’the finished lilies vary with bulb grade as shown in Table 36. While CT? storage programs generally produce a plant with higher bud count and‘better general plant quality, a premium price is not assigned this option in the program so the direct comparison of the fixed resources require- ment among the storage Options can be made. Table 36. Easter lilies: cost of bulbs and started plants, and whole prices fer production Options- Wholesale market Bulb Cost of Cost of started plants price for grade bulbs (fill,009)_ finished lilies ,(cm) (8/1,000) For Phase II For Phase III 1,000 7/8 h06 750 1.025 1.150 1.75 8/9 535 1.250 1,525 2,250 2.25 9/10 61” 1,525 1,775 2,500 2.50 10/11 670 1.775 2,025 2.750 2.75 166 @48th 15o... p~.n.o.~ wo.are oo.o~ aa.o m as: 8.8.... 8.9:. 8.3 8.9.. ~ .3. ~o.-n.~ oo.oop oo.o~ co.o a are 8.3.... 8.2.. 8... 8... m 9:. 8.2.9..“ 9.62. 8.; 8... m 52 8.2;...“ 858 8... 8... m o... 848$ 2.4.8 8.3 8.3 .ofizeexfifiv .. so: 8.8:... 3.3.. 8.2 8.3 w 8o 8.28.... and: 8... 8... a «co sored O... noose oases: area use More $553.05 235.5 8.83 . door 848.6 8.8.... 8.... 8... to. as: a... 32.3.31» 9.68... 8.8“.” 6.... 8..“ .n or: 8.5.26 to. 898 3.3.2. oodfioio unguadgb wing.“ A38. 3486 8.9.“ 8.8 28.. .. m3. 3 long 3 encase- eo-sgoasa IPC sebum soauIedmsum 362...: 8.3a 5.8 28.. m «8 8.8 «3.2 ode 23.. n eon 84.3.3 2.?“ “Ted econ .. dz. . 5 loo: so vee- sosu 55am loo-I085» um. a sum . doe» sedan .323 4.3.... 39308.. new: so was no.3 duos asoqaao one no.6 2558 H8... 15on vote: .uus mono inn—O "8.89.:— 380 refines->3 .5 names 167 van 30:. 8 you ocaun n .nuuuou: vegan xooooapan 868. a 8.3.. 2.6 0...... .. 9... 33 no. noon :u:.£~ :« ocean; wound». .ouzvonn 0a A Han «unannoum mw.~am u ae.mmw t oo.~ oo.w 9686 - no.6... - no... 25.. 3 a... 385...... 35.... 63.1.: .8... 3.3.. ..ooahuouéo... .qcuauoacuom $.9ch 1...... 862.6 338.. 86 2.2. .8 118...... $664...” «4.4.8.3 om.~ 8.3 b... .1853... 34.3... 8.08.. an.“ 86 a... 32.3.31... 8.2.6.... 8:36.. «4... 86 .. .2... 3 68. m an .86. 3 3:... 8. 3 .11.... 6.3.6 84...... 8... 8.. .. .3. 8686 84.8.. 8.... 8.... u .5. 3 4.3.3 3.8.. 86 86 .. 1.. a... in... 86:... 8.. 8.. .. a... 8 8.} 362... 8.... 86 .. 68 8 2...... 8.84... 4:... 86 n .8 «u «8.3 5.84... 86 86 n .2... hose 0a «gs—ulna“? enact 86%."... 1...... 3636 2.44.6 S... 8.3 m .3. 8......“ 248 8.. 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B... vs. S gnu.» :5. 8n >0. In [OH In. TON rm... Ion ...... I... I... ..R :8 :8 1.2. ...-8 u..m1.n..n~...m~. “an... ...“...m... 2. tan. (can OW'I) W ROI-12000086 moms 17h .0990an 0283-! 3:030.— “quaa 30.3 03:33.3 .3 0.3»: o Io: roe IONA ) $33!: 10.3 3333.:— 3505 ID ) .. 3.. J 'a (MA/88008) mom mm W 48: you“ fawn 8w .. «Agmwfl .. «a aJamudanmawam: ..mmaanwav :1 .5 .3. a: .3. can .5... 8o mum 175 Optimal Crop Mix for Diversified CrOps Program Table 37 specific! the Optimal combination of enterprises and options for the diversified crops program. Number of units of each option in the combination as well as market limitations also are shown. Roses are the only crOp not represented in the mix by at least one option. Bedding plants and carnations occur in relatively minor amounts. {Most of the optimum combination is comprised of stan- dard chrysanthemums, potted chrysanthemums, geraniums, Easter lilies, poinsettias and snapdragons. Analysis of crops and options in Optimal mix occurs later in this chapter. The fixed resources of greenhouse production area and permanent employee complement are used at or near full capacity for most of the period of midsJuly through early April. Analysis of the patterns of use of each of these resources follows. Figure 18 shows the pattern of use of greenhouse production area; Figure 19 shows labor utilization. Table 38 specifies weeks in which the greenhouse facility is at capacity and the amount by which the return to the firm would be increap sed if one additional unit of space (rt?) were available in this week. at the 7 weeks in which space is limiting, it is most constraining in the third week in September when the marginal return reaches $0.82 per ftz. Labor is also limiting in this week. In this period, both poin- settia and geranium stock plants are in production. Both enterprises are grown in large containers requiring considerable space. Further, this is a‘week in which pinched poinsettia options are potted and placed at final spacing. Both the Christmas and Valentine's Day controlled holiday carnation crops are in the bench. A considerable planting of snapdragons is in production fOr October bloom as are a large number 176 of units of cut standard chrysanthemums. Essentially, this is a period when cut flower Options which take advantage of low smer and early fall heating costs are in their final weeks. These Options overlap the period when the finished poinsettia options are being initiated and the geranium stock plant program is comencing. Table 38. Diversified crOps program: weeks in which greenhouse production area is limiting, and marginal returns for a unit of space in these periods. Production week Marginal return ($lft2) Sep 3 0.82 Oct 3 0.030 Nov 3 0.15 Nov '5 0.00 Feb 2 0.08 Mar 3 0.12 Jul 3 0.02 he third weeks of November and March have the next highest margi- nal returns, e.g. $0.15 and $0.12 per ftz respectively. Labor is also limiting in the March week. In the third week in November, finished poinsettia Options occuw maxim space, heavy production of standard chrysanthemum: for Thanksgiving and December is underway, and the Christmas and Valentine's Day carnation programs continue. Heavy plant- ings of controlled temperature forcing Easter lilies and the 12/1 geranim stock plants have also entered production within several weeks 177 of this date. The third week in March represents a similar pre-holiday period.when the greenhouse is filled to capacity with Easter, MOther's Day and garden sales crOps. Heavy plantings of potted chrysanthemums fer spring holiday sales are in production. Easter lilies now occupy maximum space and purchased started lilies are now in the bench. Many finished geranium Options also are in production. Two major plantings of standard chrysanthemums fer Mother's Day also occupy space. It should be noted that these two periods occur relatively close to maJor holiday periods and represent times when large quantities of’holiday crOps are finishing and space is also in demand fOr initiation or expan- sion of crops for subsequent sales periods. For example, in the third week in November, the greenhouse is carrying peak crop loads fer both Thanksgiving and Christmas. At the same time, Valentine's Day and Easter crOps are already requiring space. In the third week of March, Easter and Mother's Day crOps are at peak space and crops for spring sales are also demanding space. The second week of February also finds the greenhouse at full capacity although the marginal return of $0.68’ er ft2 is somewhat lower than that fer the two preeholiday periods Just discussed. Labor is also limiting in this week. Valentine's Day crOps are in their final week of production in this week. Heayy plantings of potted mums are already underway for spring holidays and numerous geranium options are in production. All Easter lily Options have now been eXpanded to final spacing and purchased started lily plants are now in place. The periods of the third week in OctOber and the fourth weeks in 178 November and July are the other times when space becomes limiting. However, as specified in Table 38, the marginal returns fOr these periods are relatively low, i.e. $0.01., 0.02 and 0.0 per n2 respective- ly. The OctOber period again represents a pre-holiday period.when summer and early fall crOps are maturing and Thanksgiving and Christmas crOps are already well along. The fourth week in November is Thanksgiving week and similar to the second.week in February, Valentine's Day week. This final week of the holiday crOps finds these crOps at full space capacity, and demand fOr space for subsequent crOps increasing. The fourth week in July is a period more similar to the third week in September. Heavy plantings of summer and early fall snapdragon and standard chrysanthemums are in the bench. A number of potted chrysan- themum options are in production and the Christmas carnation crOp is underway. Capacity is strained by the introduction of expanded poinsettia stock plant and prOpagation activity in this week. Analysis of space use shows further that greenhouse capacity is very heavily utilized throughout the period of the fOurth week in July through Christmas, and again February through Easter. In nearly all periods when the greenhouse is not used to capacity, labor resources limit further space utilization. In the period of Christmas through Valentine's Day lack of labor limits further space use in all but 2 weeks. During this period heavy labor inputs are required for the spacing of the lily crOp, fer planting, disbudding and.marketing numerous potted chrysanthemum Options, and the propagation, potting and spacing of geranium Options. 179 Similarly, labor limits full use of space in h of the 7 weeks from the week after Easter through Memorial Day. Major labor inputs are made during this period in propagating, potting and selling gera- nium Options, and initiating summer crops of snapdragons and standard chrysanthemums, and in initiating as well as selling several potted chrysanthemum Options. Analysis of the pattern of labor use in the model indicates that the 600 hours of permanent employee labor input likely would be suffi- cient to maintain this amount of greenhouse space at a high percentage of occupancy particularly if temporary employees were hired at the holiday and other peak labor input periods. Table 39 shows the weeks in which the labor supply is exhausted thereby limiting further prOduc- tion. Table ho summarizes labor use in the program. Marginal return, the amount by which the return to the firm would be increased if an additional hour of labor were available in the period, for these weeks ranges from $0.1h to $66.85 per hours with a mean marginal return of $16.09 per hour. Labor is of greatest value in Easter week when the marginal returns is $66.85 per hour. It is second most valuable in Christmas week (the third week in December) at a price of $h7.56 per hour. Peak labor use periods correspond with capacity use of green- house production area primarily (l) at mador sales periods, i.e. Valen- tine's Day, Easter, Mother's Day and garden sales (mid-May), when the greenhouses are full with holiday crops and considerable labor is re- quired to market them as well as to initiate subsequent crOps, and (2) at periods when prOpagation, potting and planting activities are underway. These activities generally introduce production units which 180 occupy increased amounts of space, and which require considerable labor to accomplish. The diversified crOps program Optimal mix generates $38h,135.6h total return to fixed costs per year, or $5.12 per ft2 of production area, or $12.31 per hour of labor paid. This mix yields net return to fixed costs, i.e. returns after fixed costs incurred to provide 75,000 ft2 of greenhouse production area and 600 hours of labor are deducted, of $172,11h.6h or $2.29 per ft2 or $5.52 per hour of labor paid. Table 39. Diversified crOps program: weeks in which labor is limiting and marginal return for labor in these periods. Production week Marginal return ($Ihour) Sep 2 8s03 Sep h 8.91 Oct 3 h.52 Nov 1 17.10 Nov 2 22.66 Dec 2 3.18 Dec 3 h7.56 (Christmas) Dec h lh.71 Jan 1 b.6h Jan 2 .15 Jan h lh.77 Feb 1 2h.71 Feb 2 16.97 (Valentine's Day) Feb 3 5097 Mar 1 12.7h Mar 3 9.71: Mar 5 3.09 Apr 1 66.85 (Easter) Apr 2 18.96 Apr 3 11.h6 May 2 27.2h (Mother's Day) May 3 15.87 (Garden sales) Jun 1 23.83 Jul 1. 27.h2 Aug 2 8.60 Aug 3 5.21 181 Table 150. Diversified crops program: summary of use of 600 hours/ week of permanent employee resource. Excess labor capacity Number of weeks in year with excess (hours) labor capacity 0 27 1-50 1 51-100 h 101-200 10 201-300 7 301-h00 2 h01-500 1 501-600 0 52 These returns fer the optimum crOp mix are more favorable than average returns for the nine northern united States greenhouse firms from which data were taken in this study. However they are lower than fer the model used in the Massachusetts study (33). Table kl lists the returns fer these latter two situations. Returns to fixed costs are considerably greater in both models. This results partially because the models assume ideal conditions and, to some extent, because the Table hl. Diversified crops program: comparison of net returns to fixed costs for nine northern united States firms with those generated in the model, and in the Massachusetts model. Net return to fixed costs 2 2 ft Total ($) #per rt"($) firms 89,388 30,391.92 0.3h 1 e1 75,000 172,061.6h 2.29 Massachusetts model 10,000 37,977.50 3.80 a) a) Vaut, G.A., R.L. Christensen, T.C. Slane and J.F. Smiarowski. 1973. Greenhouse Linear Programming, Dept. of Agric. and Food Econ., Univ. of Mass., Public. no. 93. 182 crop mixes of the nine growers may be considerably non-Optimal for their Operations in terms of profit maximization. Production_guidelines which emerge from analysis of the Optimal crop mix The Optimal crop combination programmed fer the model contains 73% potted crOps and 27% cut flowers based on contribution to total return to fixed costs. Potted plants Offer a production programmer greater flexibility to enter and exit production because of’the numerous and Often short-term Options, and the Opportunities to‘buy and sell potted plant material in various stages of development. Conversely, once planted, cut flower crOps represent a firm commitment of production area for a definite period of time. Ninety per cent of the total return to fixed costs accrues from the production of five crOps: potted chrysanthemums, standard chrysan- themums, geraniums, poinsettias, Easter lilies. In industry, these are the crOps which tend to be found in production by the mixed crOp grower, and, of course, with the exception Of standard chrysanthemums, by the potted plant specialist. In industry, the crOps which occur in the mix in relatively small amounts or not at all, e.g. snapdragons, carnations, bedding plants, roses, tend to be produced by specialists who have tailored both facilities and markets to these crOps. These crOps likely would yield more favorable contributions to total returns if the model were to be specified more closely to the characteristics of the specia- list crop producer, as is done in a later section of this study. Analysis of crop patterns in the Optimal mix through the production year September through Christmas During the fall period with major holiday markets at Thanksgiving and Christmas, the production program is heavy in poinsettias fer sale 183 as prOpagation material and finished plants, standard chrysanthemums fer cut flowers, and geranium.stock plant production. very minor activity occurs in Easter lilies, potted chrysanthemums, controlled holiday crepping of carnations for Christmas and Valentine's Day, and snapdragons. Roses do not occur in the mix in this period. Bedding plant production is possible only in January through May. Mid-December through Easter The Valentine's Day and Easter markets occur in the winter period. The production schedule is heaviest in potted chrysanthemums, Easter lilies, geranium stock plants and geraniums for finished plant sales. Minor activity occurs with standard chrysanthemums, controlled holiday crOpping of carnations fer Valentine's Day, and bedding plants. There are no crOps of snapdragons or roses, and poinsettia activity during this period is not possible. Mid-April through August This period embraces the maJor Mother's Day market, spring garden sales, and the relatively slow summer market period. Potted chrysanthemums predominate throughout the period. Finished geraniums are significant Options in April and May. Snapdragons are a.maJor component of the mix with nearly the entire production of this crap occurring during this period. Minor activities are standard chry- santhemums, poinsettia stock plant production and prOpagation acti- vity, bedding plants and controlled holiday crOpping of carnations for Christmas and Valentine's Day. Roses are not in production and Easter lilies cannot be programmed in this period. 18h Analysis of factors which appear to influence the entry of various craps into the optimal crop mix at various times of the year Potted chrys anthemum ‘ Potted chrysanthemums contribute nearly 211 of the total return to fixed resources. In our previous analysis of this enterprise under a situation where only potted mum are grown, the variable costs of heat and photOperiod control, and the length of time an Option is in the bench, are cited as the apparent maJor factors which determine the occurrence of the Option in the Optimal mix. These factors again appear to be Operative when potted chrysanthemums are studied in combination with other crOps. Nearly all of the production or 31 of the total 1:3 units in the crap mix occurs in the first week of March through the end of August. During this period heating costs are among the lowest of the year, and a potted mum crop requires fewer weeks of bench time. However, the competitive influence of other major crops may also influence the production pattern. For example , during the period of the first week Of September through Christmas, only one potted chrysanthe- mum Option occurs for em major period of time. And, this Option is produced in only one-third of the allowable market quota, i.e. 2.00 of 6.00 units possible. This period coincides with that for production of finished poinsettia Options. Also, approximately 25% of the production area is devoted to standard chrysanthemums. The combination of poin- settias and standard chrysanthemums in the fall months appears to offer greater profit potential than does potted chrysanthemum monocrOpping. In the specialised potted chrysanthemum program, this same period ranked near the top in number of units of potted chrysanthemlms in production. 185 Easter lilies do not appear to compete with potted chrysanthemums for use of fixed resources as strongly as do poinsettias. In the period from mid-December through Easter, the maJor portion of the production period for 19 units of potted chrysanthemums occurs. This is also the period when heating costs are highest. Lilies and potted chrysanthemums are grown at essentially the same temperature. It is interesting to note that in the second week in February when the Valentine's Day potted chrysanthemum crap is sold, started Easter lilies are purchased in a quantity almost sufficient to fill space formerly occupied by the potted chrysanthemums. During the first week of March through the end of May, the maJor portion of the production period of 15 units of potted chrysanthemums occurs. This is also a period of lower variable costs and shorter bench- time requirement for potted chrysanthemums. It also coincides with the time when the Options for producing 6-8 week finished geraniums in 1: inch pots are avaihble. Potted chrysanthemums appear to compete well for fixed resources with fast-crOp geraniums . Standard chrysanthemums occupy about one-half as much of the production area during this period as do the potted chrys anthemum Options . In emery, the potted chrysanthemum crop in general uses fixed resources of space and labor efficiently within the parameters of this situation. It appears, however, that poinsettias and standard mums represent a more profitable combination for production during the period September through Christmas. Potted chrysanthemums appear to compete well with Easter lilies and finished non-stock geranium Options, and seem to be most efficient during March through August. In the stunner 186 months of'June through September, potted mums, standard chrysanthemums, and snapdragons represent a profitable production combination. Standard chrysanthemums - pinched and single-stem Options Standard chrysanthemums for cut flowers rank second in value in the Optimal crOp mix with total return to fixed costs of $7&,h82.75. This represents nearly 191 of total returns. Earlier, when the standard chrysanthemum monocrOps program was studied to determine the Optimum combination of crOp options for a grower specialising in the crOp, the pinched Options predominated in the mix. This pattern occurs again when the Options are programmed along with those of the other eight crepe. Pinched Options comprise about 13% of the total return to fixed costs, about 68% of’the revenue from.standard chrysanthemums; single-stem.crOps are 6% of total revenue or 323 of standard chrysanthemum revenue. The lower input cost for cuttings, essentially oneéhalf that of single-stem- med Options, is apparently the basis fer the greater profitability of the pinched Options. After this maJor difference, the effect of the season on heating costs and length of bench time required for a crOp appears to heavily influence the profitability of both the pinched and single-stem, med Options. The impact of these latter two factors is apparent when the cut chrysanthemum Options compete with the other eight crOps in the diver- sified crop program. Feurty-six of the total 99 units of chrysanthe- mums in the mix are produced in the fall, i.e. September through Christ- mas, 29 units in winter, i.e. midPDecember through Easter, and 2h units in mid-April through August. In the fall, heating costs and time in the bench are moderate. But the factor which likely brings so large a quantity of cut chrysanthemums into the mix in the period is the relatively 187 low labor requirement when compared to poinsettias, the other major enterprise in the mix at the time. More than one-half of the cut chrysanthemum crOps (20 units) in this period are timed for Thanks- giving harvest, a period when relatively little labor is required for the companion crOp of poinsettias. The Thanksgiving chrysanthe- mum crop is produced to the limit allowed by the market quota. Fifteen units are harvested in early to mid-December fer the Christmas market. The remaining 11 units, while in production primarily in this fall period, bloom in the next time period in January. Premium prices are assigned to cut chrysanthemums sold in holiday markets with Thanks- giving and Christmas premiums the highest. Hence, standard mums are a good complementary crap for poinsettias. The favorable effect of the lower labor input required for cut chrysanthemums is further illustrated‘oy the relative absence in the fall mix of potted chrysanthemums, a.re1atively high labor consuming crop. Apparently, poinsettia and cut chrysanthemum Operations mesh more favorably quantities and timing of labor input. Similarlyy the several geranium stock plant Options while perhaps Operating under additional constraints, do require higher labor inputs than out chry- santhemums and fer this reason occur in the fall mix in relatively minor quantities. During the winter period, 19 of the 29 units of standard.mmms in the mix are produced for the premium Mether's Day market. The remaining 10 units are an October-planted Option which blooms in mid- March. In this period, cut chrysanthemums again appear to represent a low-labor-requiring complement to the higher-labor-requiring Easter 188 lilies, potted chrysanthemums, and geraniums which comprise the maaority of production in the period. Standard chrysanthemum production during the mid-April through August period is 2h units which is somewhat less than in the winter period but almost one-half that of fall production. With the exception of 8 units, standard chrysanthemums in production in this period bloom during the next period, fall. The 20 Mother's Day units are produced primarily in the winter period. During this period heating costs and time in the bench are both relatively low. Primary companion crOps are potted chrysanthemums and snapdragons fer cut flowers. Once again, the standard chrysanthemums are serving as a low-labor complement to the labor-consuming potted chrysanthemum which predominates in the schedule. However, snapdragons apparently now become competitive with standard chrysanthemums because of the extremely short production period required under spring and summer growing conditions, and because of the conside- rably lower, variable input costs for snapdragons. Fer example, snap- dragon seedlings are far less expensive per production unit than are chrysanthemum cuttings. Consequently, a combination of cut chrysanthe- mums and snapdragons serve as the low-laborbrequiring complement to the potted chrysanthemums, and to the geranium and poinsettia stock plants during the spring-summer period. while snapdragons are a profitable Option during at least the spring-summer-fall period, roses and carnations, with the exception of the Christmas and Valentine's Day controlled holiday Options, apparent- ly are not as efficient nor productive in their utilization of fixed resources as are standard chrysanthemums. And while two controlled 189 holiday Options of carnations do occur in the mix, they are produced to only slightly more than one-half the market quota placed on them. Roses fer cut flowers Commercial rose growers cycle their crap on a heyear rotation. Once plants are benched, the grower is committed by his relatively high investment of about $1.00 per plant to continue fer a.major portion of a 3- to 5-year period. A plant occupies one ftz. Because this study deals with only a one-year production period, all labor inputs are pro-rated on a heyear basis. For example, the high labor input required for planting the crop is pro-rated across h years. Similarly, a labor factor for cutting and grading roses is pro-rated across the full hdyear production period to compensate fer the fact that no cutting is done during the period of early plant development in the summer following planting. Annual production of cut flowers is similarly adjusted to reflect the heyear regime. As noted earlier, neither the hybrid tea rose Option nor the flori- bunda rose Option occur in the Optimal crOp mix. For each unit of hybrid teas a producer grows in the mix in place of an Optimal component, the returns to fixed costs are reduced by $50.53; and for floribunda roses by $1,212.h2. Floribunda roses require generally higher labor input than hybrid teas. They also yield fewer flowers per production unit and net somewhat lower market prices per flower. Further, growers report that they do not have the same Opportunity to Obtain premium holiday prices for this Option as they do for the longer-stemmed hybrid tea roses. These differences are considered in the model and are likely the basis for the considerably greater reduction in return predicted 190 for the forced production of this Option. In a situation where greenhouse production area and labor are both limiting, it is likely that roses or any other crOp which requires commitment of considerable amounts of fixed resources fer an entire production year are at a disadvantage when being evaluated against the many'shorterdterm crOp Options arrayed. Further, roses fer the most part are produced by specialists rather than in combination with other crOps. Snapdragons - single-stem Options Ranking sixth in value in the Optimal crOp mix, single-stem snapdragons fer cut flowers contribute $28,531,10 or 7.18% to total return to fixed costs. While 12 production options are available, enough to make conti— nuous year-round production of snapdragons possible, only h Options appear in the Optimal mix. All are produced during May through OctOber with crop harvest commencing as fellows for each of the Options: 19.35 units the third week of July, 0.18 units the third week in August, 22.0? units the third week in September, and 12.81 units the second week in OctOber. While market returns fer snapdragons are usually the lowest Of the year during the June through OctOber period, the cost of producing snapdragons is similarly at its lowest in this period. Minimal costs stem from the near absence of heating expense and from considerable shor- tening of the time required to grow snapdragons under summer light and temperature conditions. Also, poinsettias and lilies, two high-profit Options, are not available for production in this period. No market quotas are imposed on any snapdragon Options. During May through mid-OctOber when snapdragons come into the 191 Optimal mix, other crap options in the mix include potted chrysanthemums, standard chrysanthemums for cut flowers, and controlled crOpped carna- tions. The early propagation stages of both poinsettias and geraniums also occur in the mix. Of course, poinsettias and geraniums for finished crOps, bedding plants, and Easter lilies are not available for production programming in this period. Analysis of the presence of snapdragons in considerable volume in the Optimal mix in the May-OctOber period, a time when the fixed resour- ces of space and labor are both being utilized at near capacity, points to several characteristics of the crap. Snapdragons are a fast crOp under summer conditions requiring only 11-12 weeks from benching to harvest. They also require relatively little labor, Standard chrysan- themums require one-third more time in the bench and considerably more production labor. Potted chrysanthemums may be produced in the same or slightly less bench time as snapdragons, but this potted crOp has a much higher labor input. 0n the other hand, standard chrysanthemums and potted chrysanthemums both have a considerably higher total return to fixed costs per comparable unit of production. It is likely then that the snapdragon Option by virtue of its relatively short production period under the growing conditions of’the May through OctOber period, and its characteristic low labor requirement, becomes a profitable filler crOp which enables a producer to substantially increase his total return to fixed costs during this period with relatively minimal usage of fixed resources of greenhouse production area and labor. The other crap Options available, roses and carnations, do not offer similar advantages, and the geranium.and poinsettia prOpagation Options represent only one of many alternative ways of initiating these crOps for sale later in the 192 season. Snapdragons do not occur in the Optimal mix during the period bracketed by the fourth week of October and the first week of May. During this period, snapdragon market returns are greater per unit but so are the costs of production and the amount of bench time required per crop. Snapdragons also lose the time-in—the bench advantage which they hold over standard chrysanthemums in the early May through early October period. Total return to fixed costs also is reduced during the fall and winter period because the longer time in the bench increases total heating costs per crOp. These factors couple with that of the availability of numerous poinsettia, geranium, Easter lily and bedding plant production Options which are not available during the W through October period. Many of these cmete favorably and to the disadvantage of snapdragon crOps. Finally, of the four snapdragon production Options which occur in the final mix, all crOps except the August Option are produced from seed rather than from purchased seedlings. No grow-from-seed Option is pro- vided for the August crOp because of adverse temperatures for snapdragon seed germination at this time. As reported for the specialised snapdragon program earlier, the use of the minimal labor and greenhouse area required for starting seedlings apparently is efficient enough to make purchase of seedlings, the alternative source of starting the crOp, unprofitable. Bedding plant options Probably because the model does not portray the bedding plant Option as accurately as it might, only one bedding plant option, marigolds trans- planted into 3 inch pots and sold the fourth week in May, occurs in the Optimal mix. The market quota of 25 units of 1,000 3 inch pots each, or 25,000 pots, are in the mix. Total return to fixed costs of $h,31h.00 or 1.09% of the total generated result from this option. 193 All bedding plant Options occur only in the production period January through May. The potted marigold Option in the Optimal mix is seeded the fourth week in March and sold during the third and fourth weeks in May. This is the active garden plant and Memorial Day sales period. Market returns for this option are among the lowest of all the bedding plant Options, e.g. $200 per unit of 1,000 pots. An Option which is essentially similar except that the potted marigolds are sold for Mother's Day, the first week in May, has a market return of $250.00 per unit. Production costs per unit are essentially the same for both Options as are greenhouse space and labor requirements. The potted marigold Option which appears in the mix likely does so primarily on the basis of a coincidence in periods of relatively excess greenhouse space and labor with these periods when the option requires space expansion and greatest labor inputs. The heavy trans- planting requirement fer this Option coincides with the relatively excess labor period which occurs in the second week of April, immediately after heavy Easter sales. Similarly, marigolds upon being potted from the seed flat have a considerably expanded greenhouse space requirement. This Option when in the seed flat seems to use efficiently the space vacated by Easter crops the week prior to the potting of the marigolds. Also, relatively little demand for labor is imposed by this Option during the week of May when labor is limiting because of the heavy demand for this fixed resource for Mother's Day crOp sales (first week). Further, there are relatively few other crop options available during this period which Offer as short-term and as efficient a fit in their 19h use of the fixed resources. The Option is produced to market quota, e.g. 25 units. The relatively low marginal return for the option of $2.31 implies that if the quota were lifted, relatively few additional units would enter the mix. In summmuyg while the potted marigold Option which occurs in the optimal mix likely does so because it makes efficient use of fixed resources through its effective fit with available greenhouse space and labor, the marigold as a crop plant does Offer considerable flexibility in production timing. Modification of production schedules one week forward or back in time would likely still allow for the production of a saleable crOp fer the target market. Hence, it should be recognised that certain other potted marigold Options may be profitably fitted into the optimal mix with slight modification of the production schedule. Easter lilies Lily options in the Optimal mix are shown in Figure 17. Contri- bution of these options to the total return to fixed costs are $6,817.96 or 15.55%. In this respect, lilies rank fifth among the 9 Options, but are within 1% of the fourth ranked crOp, poinsettias, and within approximately 35 of the second and third ranked crops, standard chrysanthemums and geraniums. The dollar contribution of lilies is more than double the sixth ranked crOp, snapdragons. The controlled temperature forcing program.(CTF) is the only storage Option utilised in the mix. Sixteen units of 10/11 grade bulbs and 10.15 units of 9/10 grade are placed in such storage. The non-pre-cooled (NPC) and pre-cooled (PC) storage options are not used. 0f the 26.15 units which are initiated using CTF storage, 16.00 are of 10/11 grade and 10.15 of 195 9/10 grade. Of these units, 17.15 or 65.66% are grown to sale as finished Easter lilies in April. Three units of 10/11 grade are sold as started plants at the end of Phase I, and another 3 units of the same grade sold at the end of Phase II. The remaining 10 units are sold as finished plants for Easter at the end of Phase III. The 10.15 units of’9/lO grade bulbs are produced.through the end of Phase II when 3 units are sold as started plants; the remaining 7.15 units are retained for finished plant sales. No additional units of 10/11 and 9/10 grade plants are purchased as started plants. Conversely, the 8/9 and 7/8 grade options are not produced through storage Options‘but are purchased during the production period. At the outset of Phase II, 6.16 units of 8/9 grade and 5 units of 7/8 grade are purchased. These are supplemented by purchase of 10 and 5 more units respectively at the beginning of Phase II. Ultimately, all 26.16 units of these two lower grades are sold as finished plants for Easter. None is sold as started plants earlier in the program. Analysis oanaster lily units in the Optimal mix indicates that while the CTF storage Option adds the variable cost of heat during storage to the total cost of producing Easter lilies, it also offers the Opportunity to make more efficient use of the labor resource. One can shift the major input of labor for the initial potting of the bulbs from.the peak mid-December (Christmas) period required by the other storage Options, a period when labor is limiting, to the first week in September when labor supply is not fully used even after the green- house production area is filled to capacity. The occurrence in the optimal mix of the larger two grades for 196 production of nearly 661 Of the units started from storage and grown to final sale indicates that even though bulb cost is greatest for these grades, their premium.startedpplant and finished-plant sales prices are sufficient to Offset this higher variable cost. Also, the 10/11 grade Option requires greater use Of the greenhouse space resource because it is grown at wider spacing than are the other 3 grades during the latter half of Phase I and throughout Phases II and III. This greater spacing requirement, and.the consequent effect on heating cost per unit particularly during Phase I (third week Of December - first week of February), the costliest heating period, likely partially explain the sale Of 3 units Of lO/ll grade bulbs at the end of Phase I, and replacement through purchase Of started plants Of 6.16 units of 8/9 grade and 5 units Of 7/8 grade Options which produce more pots per unit Of space occupied. And, because the 9/10 grade bulbs utilize the same space as the lower grades throughout production, and yet yield higher started-plant and finished-plant prices, it appears that sale Of this Option occurs only after sufficient units of 10/11 grade are sold to bring about the price/space balance referred to earlier. Hence, 9/10 grade are sold at the end of Phase II but not at the end Of Phase I. However, the purchase of these quantities Of 8/9 and 7/9 grade plants requires commitment tO lilies Of substantially more total greenhouse space during Phase II (7,030 square feet) than that released by sale of 10/11 plants (3,000 square feet). And, several maJor potted chry- santhemum Options, and many of the spring geranium finished plant Options, also are initiated or expanded in spacing in this critical week when the Valentine's Day crops are sold. Both fixed resources 197 Of labor and greenhouse production area are at maximum use, and hence limiting in this period, and far most of the fbllowing 9 weeks through the week after Easter. It appears then that the lily Options described above and the potted chrysanthemums and geranium.finished plant Options which enter the program in the second week Of February represent an efficient and competitive combination Of enterprises. Essentially, the same transactions occur at the end of Phase II in the second week Of March when 3 more units of 10/11 grade plants are sold as are 3 units Of 9/10 grade. These sales release h,890 ft2 Of production area. But, 10 units Of 8/9 grade and 3 units Of 7/8 grade are purchased as started plants and will require 9,h50 ft2 during Phase III. Other crOps entering the Optimal mix at or shortly after the second week in March are several potted chrysanthemum.Options, numerous spring finished geranium plant Options, and the potted marigold program. Cut flower crOps are not strong competitors for fixed resour- ces during this period. The tendency toward replacement Of some units of 10/11 grade plants in the final production phase indicates that the lower grades Of bulbs are prObably more efficient users of space than is the 10/11 grade plant, especially when greenhouse production area begins to become, or actually is, a limiting factor. Further, the premium price paid far the finished plant in the 10/11 grade apparently is not entirely sufficient to compensate fer the added return to be Obtained from some level Of additional units Of 7/8 and 8/9 grades produced in the comparable amount of space, and in the same time period. Further, the heating costs per finished pot during this period are greater for the 10/11 grade as a result of production of fewer pots per unit Of greenhouse production area during Phase III. 198 On the other hand, 10 units Of the 10/11 grade and 7.15 units Of 9/10 grade are produced during Phase III indicating that the grades are profitable in the optimal mix. There appears to be a quantitative level at which the production of a greater number Of units per ft2 affOrded by the lower grade plants, and the premium prices paid fOr both the 10/11 and 9/10 grades, combine to achieve the greatest return for the use of greenhouse space and labor. In this multicrOp production situation, the number of units Of the various grades of lilies produced to finished plants defines that Optimum point for Phase III. The following Easter lily production management guidelines emerge from the analysis: 1. 2. 3. Easter lilies appear to be a compatible and profitable series of Options when used in a diversified greenhouse Operation. The CT? program.offers the diversified producer a relief Of pressure on the labor resource during the busy Christmas crop period by allowing the labor-consuming lily potting Operation to occur in September. This advantage accrues to the CT? sys- tem even though additional heating costs are incurred during storage, and an additional labor cost occurs in the moving of the potted bulbs from potting Operation into storage. Further, while not applied in the prOblem, in reality a premdum.price is Obtained for GTE-grown lilies in some markets because Of their greater'bud count and more vigorous plant quality. If the mar- ket Offers this premium, the advantages of the CTF system will be further enhanced. The NPC and PC storage Options may approach the profitability Of CTF if the bulb potting Operation were achieved in late 199 November when considerably more available labor exists. However, in some markets, CTP plants will still command a price premium. The sale Of started plants at several points during the lily production program m be a profitable Option, especially for managers who also produce potted chrysanthemums , finished gera- nium plants and bedding plants which must be initiated in February and March. This practice appears tO be most profita- ble with the higher grades Of bulb especially if sale occurs before or at the point of first spacing and sale price reflects bulb grade. Purchase of started lily plants appears to be a viable means Of initiating the crap. Advantages Of this practice include the elimination of a considerable portion of the storage, potting, handling and spacing labor requirement and avoidance Of losses steaming from poor bulbs and other maladies most prevalent during the early greenhouse production phase. This approach would Offer greatest advantage to retail growers and other firms with limited labor resources. aging) A range Of bulb grades appears to Offer potential for acbi %’ 59 an Optimum mix which uses greenhouse space and labor effi'c rte” l ”a the use Of these resources. However, the Optimum mix vi} 3’ v ly and achieves the greatest total return to fixed costs determined not only by the available lily Options but 3190 the other crOp Options available for production. 200 Poinsettia Options Production of finished poinsettia crOps from either or both stock plants and purchased started cuttings or plants is possible in the diver- sified crOp program. Figure 15 depicts these Options. A.considerable number of units of each occur in the Optimal solution indicating that both make efficient use of fixed resources in this production situation. or the total $65,5h9.83 return to fixed costs contributed by poinsettias, $h9,59l.67 or 75.66% comes from stock plant programs, and $15,958.16 or 2h.3h1 from Options which require the purchase of the initial cuttings or started plants. Poinsettias account for l6.h9% of the total return to fixed costs and rank fourth after geraniums which account fOr 18.311. Options in the Optimal mix are shown in Figure 15. PrOpagated options stem from a stock plant program which begins with the purchase of 2.93 units of started plants from a national supplier in the first ‘week of June. The first units of cuttings are available on these stock plants in the fOurth week of July; Of these, 8.79 units are prOpagated of which 6.79 units are sold as started plants in 2% inch pots, and 2 units are potted in 6 inch pots for stock plants. Six units of cuttings are taken from thse in the fifth week in August to produce 6 units of finished plants in h inch plastic pots pinched once to achieve 3 blooms per plant. The stock plants are grown on for sale as finished pinched, heavy 64bloom plants in 6 inch plastic pots. The stock plants started in June are continued after the cuttings are taken in the fourth week in July. The next prOpagation occurs in the second through fhurth weeks of August. Finished crOp programs are initiated from these cuttings as shown in Table h2 and are produced to market quota. Also, 6.80 units of cuttings from this propagation are sold as started plants. PLD~P356 PLO. S 56 U.. 1: la 201 Table h2. Diversified crOps program: finished poinsettia options in the Optimal crop mix. Optimal Market .Marginal Production Option week ‘mix quota return Initiated (1,000 pot (1,000 pot (Shadow units) units)_ priges) (£2 Finished plants from stock plants pinched plants: 34bloom,hinch plastic pot Sep 3 2.00 2.00 23.66 54bloom,61nch plastic pot Sep 3 2.79 2.79 785.11 64bloom,6inch plastic pot Sep 3 6.00 6.00 87h.32 Finished plants from purchased cutting§_and startedgplants single-stem.plants: 5 plants in 7 inch pot Sep 1 2.00 2.00 277.91 6 plants in 8 inch pot Sep 1 1.00 1.00 820.0h pinched plants: 54bloom,6inch plastic pot Sep 2 3.21 3.21 785.11 Finished stock Jlants Jun 1 0.25 0.25 6,727.36 Thereafter, 0.25 units of the stock plants, the market quota, are grown on far sale at Christmas as large flowering poinsettias in a tub. The remaining 2.68 units of stock plants are dumped. Finished plants of poinsettias are produced from purchased 2%.inch potted plants to market quotas as shown in Table h2. Analysis of poinsettia options in the Optimal mix, The stock plant program.initiated the first week in June requires considerable greenhouse production area during June through August, but is eliminated by September when pressure fer space increases for the late fall and the Christmas holidays. Further, it provides an immediate 202 successor crop to the geranium and bedding plant crOps which vacate space in late May. And, as with the geranium crOp, the existence of numerous alternatives for the cuttings yielded by the stock plants offers considerable programming flexibility. In the model, the yield Of the poinsettia stock plant program is channeled as follows: nearly 1h units of cuttings sold as rooted cuttings or started plants, and 17 units of cuttings go to produce finished crOps. These summary figures include a sub-stock plant Option initiated within the maJor program. All finished plant Options initiated from cuttings of the stock plant program are produced to market quota. The shadow prices for these finished crOp options, in all of which market quotas are met, indicate that total return to fixed costs could be enhanced considerably by the production of the next unit of each Option. However, the fact that other available finished Options in the program are not produced indicates that factors other than the profitability of the finished plant options are responsible fer limiting further production of the stock plant program Among these factors are both greenhouse production area and labor which become limiting in the fourth week of July. Further, the labor resource is exhausted the first week in June, the period which requires considerable manhours to plant poinsettia stock plants. Labor also limits Operations in the second and third weeks of August, a period when the maJor prOpagation Operations are slated. Further,labor is limiting in the second.week of September and greenhouse space is limiting in the third.week in September and nearly so in the second week. The availability of numerous finished plant Options which are not produced in the optimal mix indicates that other fall and Christmas 203 amps compete effectively for fixed resources with the finished poinsettia Options. Hence, the poinsettia stock plant program which occurs in the optimal mix is one which is limitedlby planting labor requirement in the first week in June, by space and labor requirements in late summer during peak propagation periods , and by the effective coupetition of other crap Options for the fixed resom-ces available both in the summer months during prOpagation, and in the latter third Of the year when finished Options compete with other crops. It is interesting to note that the option whereby large stock plants initiated the first week in June are continued in production for sale as finished tubbed, blooming plants for Christmas is produced to the market limit of 250 plants. A shadow price of $6,727.36 per unit of 1,000 plants indicates that the total return to fixed costs would be increased by this amount if the next unit could be produced. Unfortunate- ly, the market quota is all too realistic for present markets. But, the apparent profitability of this Option may merit efforts to expand the market for large-size poinsettia plants . Production of a amber of non-stock plant options in the Optimal program likely reflects the limitations imposed by labor supply in key weeks in the suner. These finished plant Options apparently utilise greenhouse space efficiently enough during September through Christmas sales to Justify substitution of the higher initial started-plant cost for the scarce labor resource . Options produced by the purchase of started plants in various weeks in September are for the most part the largest sizes of plants available for production. Further, they are all produced to market 20h quota and they all here substantial shadow prices. Analysis of these Options indicates that they return the highest market price because of plant size and number of‘blooms per plant. However, in the case of’the 6-bloom and S-bloan pinched single plants in 6 inch pots, there is no difference in space and labor requirements from.those of a similar hAbloom plant. In this situation, the Options in which the plants carry a higher number of blooms, and hence a.higher price, enter the Optimal mix first, and to the limits of their market quotas. It is interesting to note , however, that the h-bloom pinched single-plant per 6 inch pot Option does not come into the mix, but the 3 blooms per single pinched plant in a h inch pot does, and to the limits of its market quota. Apparently, the greater yield of plants per ft? for this smaller size pot more than compensates for the lower price per finished pot. Also, the crOp is in the bench fer fewer weeks and requires somewhat less labor. In the case Of the single-stem, singleébloom per stem plants produced from.the non-stock plant Option, once again the plants with highest market value appear at full market quota. It appears that the higher market returns fer this product more than offset the cost of additional cuttings and saswhat greater space and labor invested per unit. While the market demands a range of plant sizes and grades, and the market quotas reflect realistically the quantities of these higher grades which will be taken when Offered, one ponders whether the grower is not sometimes enticed by the volume of crOp which is demanded in plants of lower grade and smaller pot-size, and overlooks profitable Opportunities latent in the production of the higher grades and larger 205 sizes. In summary, when the poinsettia crOp Option is available for selection in a diversified crops program, both the stock plant and the non-stock plant Options compete effectively fer fixed resources. The mix in which they occur tends to contain a preponderance of the higher grades of the finished plant. Geranium options Geranium options in the Optimal mix contribute $72,768.36 or 18.31% of the total return to fixed costs. The crOp ranks third in dollar value contributed, and is almost equal to the second ranked standard chrysanthemum crOp. Further, both stock plant options fer the production of prOpagation materials and started plants fer sale, and those fer production of finished crOp Options, are well represented in the mix. This indicates that both are profitable alternatives. Quantities of options in the diversified crOps mdx are shown in Table 37. The long-term holl production program is the only maJor Option which does not occur in the mix. However, the 25/1 program, a shortened version of the hO/l program initiated a.month later in September from 2% inch started plants, does occur. The program procedes through the fall and winter’months in numb the same manner as was noted.in the specialized geranium program, i.e. selling various forms of prOpagation material and at most Opportunities, selling a portion of the stock plants. In the second.week in December, the program initiates the 5/1 sub-program.through which cuttings are sold at various points. Two units of h inch finished plants are produced fer Mother‘s Day sales, 5 units of h inch finished plants are produced for May garden sales, and 5 similar units for Memorial Day sales. 206 An 8/1 program is initiated in the first week in November from purchased rooted cuttings. In the fifth week of January a program is prOpagated from these stock plants and yields 2 units of 1: inch finished plants for Mother's Dw sales. The 811 program then phases out in the third week of February by sale of 6 units of unrooted cuttings produced at this time and the sale of started stock plants in 7 inch pots inedi- ately thereafter. A 12/1 program is begun in the third week in October by purchase of 13.09 units of unrooted cuttings with which to start stock plants. In the fourth week Of December, the first promotion is taken from the stock plants, 21.55 units of which are sold as unrooted cuttings, L83 units as rooted cuttings, and 6.38 units used to initiate a 2.5/1 program. III-ediately after this propagation (first week of January) 5.09 units of started 12/1 stock plants in 7 inch pots are sold. In the first week of February, 20 units of unrooted cuttings are sold, and the remaining 8 units of 12/1 stock plants are sold. be 2.571 program continues to completion producing 15.85 units of 1: inch finished plants for garden sales in the third week of Mn, and selling the 6.3!: units of 1: inch stock plants from the program as finished plants in the third week of May. A market quota of 8 units applied to the sale of started stock plants in the first weeks of January and February is not met. No market quotas are applied to propagation material or finished plants for May garden “1"- Finished plants produced through programs which did not involve stock plants occur in the Optimal mix as shown in Table 1:3. he geranium stock tree program also occurs in the Optimal mix. It is initiated by purchase of 216 inch started plants in the third week in February of the first year as a basis for initiating O.h3 units of 0: 0:85am 30 ofifldonOOlfiu flewfifigfc 0 n LPN UGOfiquHnm gflghom UOEDfiCfiM "page“ QQONO QVCfiflhfiarfiQ truss GHQ-urn 20~7 noon coca rm 2:: od o.~ a sea a .22 no apnea sateen «non 3.3 n one m .23 533.5 ooooom noon coca mm 2.8 8... m as n no: no 353 esteem noon soon rm «Ta. a an: m .32 3 38nd esteem om.as oo.~ $6 a .3“ m .3" 553.6 e382: Ram oo.~ o.~ a 3... m non 6338 3885 Anauos oHOn neon any woo ooo.nv Anooo mom“ : ooo.av menu a ma museum nonsmomsm venomousn Houseman ooze roofs 38o non—non Son .33 noflaz unnamed to: so»: Sausage .naoamouas souoomsmoam conomoasn soak ooosvouo condenser nonnuoau "seawomo noose coauwnsoran .ma edema stock 208 stock trees. In the fourth week of January of the second year, h2.81 units of unrooted cuttings are sold, and 0.19 units of stock plants for a 2/1 program are initiated. The program concludes with sale of 0.38 units of finished 16 inch potted plants for Mother's Day. The original 0.1:3 units of stock trees are finished as flowering trees for Mother's Day sale. However, finished trees are produced in only one-fifth the quantity allowed by market quota, and the finished h inch plant Options in only two-fifths Of the allowable quantity. As noted earlier, programs which produce prOpagation material and started plants for sale to other growers, and programs for the production of finished plants are both well represented in the Optimal mix. Among the finished 8 inch plant Options, plants grown from stock plant programs accounted for 36.57 of the total 57.59 units produced, or 63.50%; finished Options produced from purchased cuttings or started plants contributed 21.02 units, or 36.50%. These results indicate that stock plant programs, e.g. 25/1, 8/1, 5/1, which produce for sale cuttings, started plants and finished plants use fixed labor and green- house space efficiently and are viable production options. Similarly, "quick-crOp" geranium programs also have their place in a diversified production operation. Further evidence Of the profitability of the finished h inch geranium plant Options comes from the fact that all finished 1: inch plant options grown for Mother's Day sales that occur in the solution, with the exception of those in the geranium tree program, are produced to market quota. Shadow prices for those Options produced in non-stock plant programs range from $32.58 to $hh.50 per unit indicating that 209 worthwhile revenue would be added to the total return to fixed costs hy production of one more unit of each Option. However, shadow prices for Mother's Day Options produced from.stock plant programs are 362,09 and $88.59, about double of those Options which were started from pur- chased cuttings Or started plants. These programs.may be more profitap ble under the conditions of this situation than those which do not involve stock plants. Elimination of the cost of propagation material coupled with the revenue from.the sale of cuttings, started plants and started stock plants yielded by the stock plant programs, likely serve to effect the greater heating costs and increased fixed resources utili- zation of the stock plant programs. Further, the many opportunities for entry and exit from.the stock plant programs offers the production pro- grammer considerable flexibility in his use of labor and greenhouse space. This flexibility is likely enhanced by the fact that many of the Options in the stock-plant program.require relatively short periods of time in the greenhouse bench. Late May garden and Memorial Day sales Options do not carry market quotas, and hence here no shadow prices fer comparison with the MOther's Day Options. However, the substantial quantity of each Option that occurs in the Optimal mix.indicates that these programs likely are profitable. The geranium tree program, because of its selected Options being produced at considerably less than one-half’the quantity of the market quotas, appears to be a less profitable geranium program.than either the stock plant programs or the "quick-crOp", non-stock plant programs. the for thc pr 210 Geranium production Options appear substantially productive in their use of fixed resources and compete effectively with other options for their use. The occurrence in the Optimal mix essentially throughout the entire span of time for which geranium Options are available for production further reinforces their potential. In summary, geranium Options likely are profitable in a diversified crOps production scheme because the numerous alternatives for starting the crOp, i.e. unrooted cuttings, rooted cuttings, started plants in 2'»: inch, 1: inch, 5 inch pots, and started stock plants in 5, 7 and 12 inch pots, provide the production manager with considerable flexibility in initiating his geranium program. In this m, he can mesh this program more effectively with other crops competing for the same fixed resources. Also, numerous entry and exit points are available within the production Options which , when coupled with the relatively short-term nature of many of the sub-Op- tions, affords mamr Opportunities for efficient use of fixed resources. Further, a number of the sub—Options, e.g. production and sale of un- rooted cuttings, require minimal greenhouse space. Production can occur even in periods of relatively full use of this resource. This is especially advantageous at times when greenhouse space is used to capa- city but some labor resource remains available. to be In 211 The Potted Plant Specialization and the Cut Flower Crop_Specialization Still another common practice among floriculture producers is to specialize either in cut flower crops or in potted crOps. Often, bedding plants are included among the potted crOp specialist's Options. In order to examine the relative merits of specialization and diversi- fication, a potted plant specialization model, and a cut flower specia- lization model are examined. Discussion of these studies fellows. The Potted Plant Specialization Model Utilizing the same fixed resources of greenhouse production area and labor, and the same market quotes, a model is programmed as a potted plant specialist. CrOp options included all potted Options, i.e. potted mums, poinsettias, Easter lilies, geraniums, and bedding plants available in the diversified crOp prOblem. Table ht arrays the optimal mix for the potted plant specialist given these fixed resources and crOp Options. Figures 20 and 21 show greenhouse production area and labor employed, respectively. Resources are used at or near full capacity during the periods September through the first week in December, and again from the second week in February through Easter. Fairly full use of resources occurs in the period between the third week in July and the fourth week in August. The inadequacy of the labor resource limits more complete utilization of greenhouse production area in the period of December through the first week of February, and from the second week in April through mid-May. 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Hae- . udfiuaeomw.namwwaauw » meson omenxn Annoeaqlav .nnaesv .««. «we mono noose accuaao one mono nnaoo ensue on enannm anemone nnxne: 11c. .v.vcoo .aa Gun-B 2137 oo.SN.OHm seasona- neeaa 2.38 5 ...an 2n non 38. 293.3 158 . pm.mow.w mm.omo.aa mm.o oo.H none none ca am noon» Samoan» encoder“ do. ~0.owo.a no.3am oo.~ oo.~ aw.mn mm.mmm oo.~ on.o boa a.momuos avom soon 4 ea avenue com-«sum «Hoe oe.nma oo.om mm.» one: n as: om.om~.n oo.ou Hm.~m 0:0: n no» aweauoso veaoouns Hue- nnoa as: on no encode cabana- ooaezonsa Iona unease. commend sou» Imus-nee $52.8 2.3.. 3.8 neon 2.21.; and? and n8: 2.1.3 33:3 on... on... and: enenno $533 $63; 8.~ 8.~ 2.08; 3.8“ 8 u 8...». a8 .1382 anon one. a 5 353 9.533.“ do. "angina » Too» Semi... «nnwfso momma. was mono ouosu anemone one mono .38 non: on Sons 1325 annual .v.umou .a: canoe 21i3 .56 mono Asa—3&0 a.“ no.8 sodas—no.3 onsomseoam "scauonuasaoomm anod— coupon .om nasmHa o cocoa oncogenes» no on: tonnage on meanness moeooom hnaosw nomad :02: ea arose as honed no on: .352 on Magus: moaooon seas cozosoona ourossooum. noun: 5 axons s0 lull! m e m m an.. m u H a m m H m a m m a .. m m H m.. m m“ a m m.” m a m m H a m m H m_._ m m a 3 03¢ 5:. Ed. *5; ma: :5.- E ia...§/ ‘MV 52. um: >0: m NH Hbo ”mm l I I 1 O In 0 In N H H I In N I I O O .9 m I I O In M ..e I I 1 I in o In in \D \O In M (L331 MODS 000"!) W HOIJDMOHJ smonmuo I O I‘- r m g— 219 .xfia mono Hoeqvao cu scaumNfiawvs causeway oeAOHnso cameraman "codaouaasaooan ocean ooaaom .Hw neared Ho>oa nomad “55am: a: 7mm.flwms emwa ma Woe sfins mamm.~mm Hmecmme $2 496 ,5“. as. find magma: nu nomad no.2: ca 3.00: I. o l.o: I own 18m cow GS... am..— as. 9.5 >0: FUD «am a m” m n” m .1 m n n” a m m .H ecrm n. a 220 are significantly under-utilized. Constraints imposed by the limited 2 month production period as well as the selection of profitable crOp Options which require labor and space primarily in other periods and only minimal space and labor during this period likely account for this summer hiatus. It is interesting to note that the typical potted crOp specialist often runs at somewhat lower production capacity during sumer months and utilize the available labor for greenhouse and equip- ment maintenance, soil preparation for fall and winter crOps, and to cover for employee vacation time. Also, the market for all florist crOps generally dips during the summer months for numerous reasons. Comparison in crop Options programmed and profitability of Operation among several specialized production programs, as well as with the diversified program, is made later in the chapter. The Cut Flower Specialization Model Once again, as with the potted plant production specialization, the same set Of fixed resources used in previous models are made avai- lable for out flower programing. CrOp options include standard chrysan- themums, snapdragons, carnations and roses. Table 1:5 shows the Optimal mix yielded by the analysis. Figures 22 and 23 plot the levels of the fixed resources of greenhouse production area and labor employed to Operate this crOpping program. During the period of the fifth week in August through the second week of January, greenhouse production area is used at levels generally between 60,000 and 66,000 ft2. For much of this period, inadequate labor limits further space use. During the remainder of the year, production area is used in the range of h0,000-60,000 ft2. Labor is limiting in 221 oe.mos.o ~m.oso oo.oH oo.ca ossnnoneu om.~mm.o ma.~mo oo.oa oo.o~ msaaomanenea oo.eos.e os.ose oo.oa oo.o~ m one o~.mom.m mm.oap oo.o co.» m son mm.mem.m sm.oa~ 00.: oo.a a one EOOHD a». moose oomocnminossnosvssnhwmo ossossum sm.moo.om annoa «a.mms.» ms.pms.a oo.« oo.« nnnnnm sm.~mo.m Hw.mos.a oo.s oo.s are n.neansnan> mm.smm.e «a.mam.a oo.m oo.m anannaneo EOOHQ. 00 mgdvmo havwdon dOHHOhvaOU 023.3350 Ho.mms.mm annoy ms.~m~.o mo.mom om.ma neoz sum ms< mm.aoa.o mo.mom H~.oa nsoz sum ass m~.mos.o os.flhw Hm.sa nsoz a as: .s one sOOHp_Op omswflooon ooaomomsm noun neon» savannawsun He.mes.m so.mam mm.~a neon mum poo oa.oow.p om.nam ap.sa neon mun anm ms.osw.o mo.mow sm.sa neon sum as» na.amm mm.mem mm. nsoa mud nae mm.mam.ma «a.mom ~o.a~ neon mum one sooan Ow moon some sebum savouoawnwo uncommuommmw s~.om~.mm oo.mmo.m s~.oa noon on» seesaw "momom » H33 355 dunno mango awe mono sword aneuvno one mono nonoo onus“ on ensnnm assuage ensues .xas mono assupoo “newumuaaswoomm nosoau poo .ma edema 222 Pm .HJN. wMH Hdvoa m~.mao.am Huaopuosm oo.~H~.m op.a~m oo.oa oo.o~ sun o.uoooo: ~o.o¢:.a No.4wm am.m oo.~H uoouom om.mmp.m m~.mpm oo.oa oo.oa m aux mo.wo~.: mm.~mm mo.» oo.o~ m pom om.mom.m mm.omm oo.oa oo.oa m ooh mm.»a:.~ «3.4ow oo.; oo.a m ws< «a.mpm.m mo.mom oo.: oo.a m ms< mo.wam.m a».mom oo.: oo.: m as» oa.oam.m Ho.amm oo.oa oo.oH m can oo.mom.m om.omm oo.oa oo.o~ waa>flmoxoooa Ho.aom o».owm mH.H oo.oa m oon mo.oaa.a ma.mom om.~ oo.m w >oz oo.aaa.~ m~.mom oo.a oo.a m poo 800.3. 0». 837.3%": d gunucdug c.3053 ma.mmm.mm Huoopugam mn.m»~.0 mm.~ao mm.o oo.oH “an o.uonaoz mm.mmo.oa mm.mmm oo.~a oo.ma gunman om.moa.p mm.oap oo.oa oo.o~ N no: m~.mmn.m oo.om~ ma.» oo.o~ N no» am.omo.p m~.oa~ wa.o oo.oa m can om.m~m.m oa.mo» oo.; oo.a m m=< om.o-.~ oo.aom oo.: 00.: a duo om.omm.w mo.mmm oo.oa oo.o~ m can aw.uooo~ undngo vononuflaugaonquago 6.8.23.5 m Hupoa . uflns\» Annacaql‘ opaqmv was no.3 duosd 383% 65 no.8 ooooo cough o» nuspom Hoaaaoo poxno: .Ac.vnoov .m; canoe 223 53: no.3 Hun—390 5 3.3 83260.5 0255.095 ”cognauquoonu .333..— 2.5 .mm 0.9»: o In 10H In." ION lnw Ion Inn 13 In: ..on Inn r8 9:51.: non—003 .35." not.) 5 8.8: I 0 fit ’ .. no A. .2 53393 803.9% b30230 ...—Iva: J .2. (1.83.1 mobs 000‘1’) W lOIJDflOOHJ 39301013339 fig «NHamm Hanna mama in: mammamtflmawammaammanan~a ..nmaamma 22 a2. :2. :2 an: E: a: 5:. Ba 8.. So a J2.- Aouo don—«ac a.“ 33.3»: 00.508." oohoamso 9:228qu "acaaouwaduuomu 3.5.8 v.6 .mm «ham: 22h o 9.32.: a. 8.3 53: 3 38.... o Ho>mH gonad no.3 . no? ’ lawn :8“ K3833: :MQH: mmflammd1mgmmdammdm:mwammdnammdammdm :MNHaMNHaMNH 03¢ 42. 5:. a5.- mm< :5..— E 5% om: >92 H00 mmm 225 only six of the weeks during this 36 week period. Figures 22 and 23 indicate that space and labor resources are employed more uniformly throughout the cut flower production year than they are in the specia- lized potted plant model. There is considerably more holiday market influence and seasonal impact on potted crOp schedules than on those of cut flowers. Further, potted crops require generally more labor input per unit of crap than cut flowers. Both the potted craps program and the cut flowers regime use less greenhouse production area and less labor resources respectively than is used when both potted and cut crops are simultaneously available for cropping as in the diversified crops program. Table 1:6 compares space md labor used by each of the programs. Table 1&6. Annual mean greenhouse production area and permanent employee resource used to produce the optimal crap mix in several diverse crap programs. Greenhouse Pemanent Program production area employee force (ftzjweek) (hours jweek) Diversified crops program 63,523 509 Potted plant specialisation 516,819 1:29 Cut flower specialisation 52,333 597 Comparison of Profitability and Crop Couposition of the Several Diversified and Specialised Production Programs The crap composition and profitability of the alternative cropping programs examined in this stw are smarized in Tables 1:7 and 1:8 . Potted crop and bedding plant options account for 72.03 percent of total return to fixed costs yielded in the diversified crops program. Cut 226 nachuomol u~¢ .eso: none: on c: 80. and 8.00M occuquudu «no.9hu oo.oo~ esowdhvnecm 0:33N 8.8." .9! 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Given the total array of crop Options available in the diversified program, potted and bedding plants use fixed resources more profitably than do out flower craps. The potted crop specialisation yields total returns to fixed costs of $370,19h.00, only $13,222 short of the $38h,l36 total returns for the diversified program,‘but $91,860.00 greater than the $279,05h revenues for the cut flower specialisation program. Programs planned to test the profitability of a 5—month bedding plant production program coupled with an essentially year-round geranium program.and of a S-month bedding plant program.supplemented.hy a 1—month summer and fall diversi- fied crap programfiboth prove less profitable than the cut flower special- ty program. Total returns to fixed costs are $15h,l3h.00 and $230,969.00 respectively. In both programs, unrealistically low utilisation of greenhouse production area and labor resources occurs.See Figures 25-27. MonocrOpping programs , that is, those situations in which the model is allowed to program production only from among the Options of one crop enterprise, e.g. geraniums, are analysed for all crops except roses for cut flowers, bedding plants, and Easter lilies. Total returns to fixed costs under monocropping are generally lower than for multicrop programs. Standard chrysanthemums fer cut flowers is the only profi- table monocrop program; it yields total return to fixed costs of $266,710.00, only $12,3hh.00 less than the mnltioption cut flower program. Net return to the fixed costs is $3h,688.00. All other mono- cropping programs yield positive total return to fixed costs, but nega- tive return net of fixed costs. Carnations are the most unprofitable of the cut flower monocrOpping schemes in terms oftotal return to fixed costs with a loss of $73,022.00. Poinsettias yield the highest 229 .5! no.3 1560 5 some 53260.3 25933.3 "scuossaiuoan linemen can panda goon .aN show: ,l $533: 35003 hams. honed no.3: 3 nuous so row 3333 e332! II \afioaaso Iii n» Asnmasdmasmmansmmmammam..nwammansmmasnwansmmasmmasnmH c3 SE. :2. as. .5 5.: mm..— .3. one >2. Bo mum 230 .5! no.8 3990 5 903.033»: 00.302...” £28.35 nausea—non "ecuassaaowooqn unassuming“. monsoon .nm 9:62 mags: 3 ( nosed noun) 3 nuous so H0>OH hODGH gfiwxd: \ 0 r9. ..8 IONA mlmiouasmmdadeana s a :2. Mao—mud anwdammd 03¢ 43... 3 am En. own >0: 900 an :3... none 35.30 on .6300qu 0305805 3090000: 89.0.2» 05:. shone vacate»? :3: .3593» gosh. nosed.“ memo—00m .3 0.93m 231 -... m ..me L r ....... _ #2 some 83360.3 250.38% .«0 on: .352 0» $533: non-0009 >499; henna £03: 3 3.00: I. 333300 uonsa no on: humane 0» goal: aoloooo. \ Issues: some 00302.93 mason—soon» £0.33 5 300: ID namwdamwa amwan ..MNH:madmanwdnmdm:mwdzmwdnammdanwdamud 99¢ 43. Ba. ads. S 5‘! mm..— zfi. can BI Boo mum 232 .55 0000 13.300 5 003.033»: 0053030 9005.300 300.308 030.3» 000—. 09000 00325050 A0>0H henna mamwaammd OD< .5580: HE. / ., amwamamwdamwam 39; H5- E 0:323 2 .33: 53: S 3.8: an. ammdmNamanmdammdmanwdzmmdamwd «(I E 5:. 8G >0: BOO mum 0 [Do— loo IONA Toma 1 30. r com I can I own I 8.. I 0.3 .. 8.. ... 0mm I 8“ .56: 3960.5 323». 0000A“ 90.303 .5 0.3»: (mu/sums) mnrm 30m 233 loss among the potted crops, $82,699.00. However, it is possible to schedule poinsettia production only during 7 months of the year so application of the fixed costs for the remaining 5 months is not realistic. If ally 7 months of fixed costs are applied, total return to fixed costs is $6,350.00. Bedding plants show a net loss of $116,206.00. However, as with poinsettias, this crop can be programmed only during 5 months of the year. Using the rationale applied in poin- settia monocropping, bedding plants still reflect a loss of $1h,152.00 when only 5 months of fixed costs are applied. Monocropping net losses to fixed costs for the remaining crops are: carnations, -$73,022.00; geraniums, 465.7ma (416,968.00 if fixed costs only for the weeks in which it is possible to progrus the crop are applied); snapdragons, -$35,07o.oo; potted muss, 432,651.00. Total and net return to fixed costs per ft2 of production area, and per hour of labor are specified in Table 3:8. In the multicrop model wherein bedding plants are programd exclusively during January through M with other crops available for production June through December, bedding plants contribute 26.221 of the total retum to fixed costs. Among the crop options available for June through December production, poinsettias yield 31.06% of total return to fixed costs with potted chrysanthemums , cut chrysanthemum and snapdrang in descending magnitude of contribution respectively, e.g. 16.16, 10.10, 9.865 Figures 26 and 27 depict the use of green- house production area and labor in this program. Clearly, this program offers a potentially more productive use of the fixed resources of greenhouse space and labor then does the bedding plant - geraniums program. With total return to fixed costs 231.6: of $230,969.00, the program yields $3.35 per ft2 of production area or $8.0h per hour of labor. Net return to fixed costs are $38,9h7.00 or $0.32 P°r ftz, and $1.25 per hour of labor. These projected returns rank the program as potentially more profitable than the bedding plant «- geranium program but less than the diversified crops program and the potted plant and cut flower specialty programs . As expected, the quantities of each of the crop options in the Optimal mix increase as one moves fras a diversified program in which nine crops and their options are available for production to potted plant or cut flower specialty programs wherein available options are more limited. Even greater incremental changes occur when one shifts from a diversified crops program containing potted plants and cut flower programs to a specialized monocrop program containing the options of only one crap. Table ’5? identifies quantities of each crop in the optimal mixes of each of the programs. Model for hplonsnt of Temporary Labor Flower production firms often utilise temporary labor, both on a full-time and part-time basis , to handle the work load for certain labor-intensive production activities. This is especially true of bedding plant growers, e.g. for the transplanting operation, and potted plant producers usually at peak marketing periods. Analyses of crops and production options presented thus far in this stumr have used models which do not offer the opportunity to supplement permanent employee force with temporary labor. This is done to provide as realistic a labor situation as possible in that 235 many medium-size production firms increasingly attempt to operate within the limits of the time and abilities of their permanent employees. However, a limited examination of the impact of providing the opportuni- ty to hire temporary employees is conducted and analysed here. The model for employment of temporary labor is described in Chapter II. Briefly smarised, the manager is provided with 1500 hours per week of permanent employee time, instead of 600 hours as in other models used. But additionally, he has the option of employing unlimited temporary hourly employees . The program tests three temporary employee wage levels: $2.00, $3.50, and $5.00 per hour. The same crops and crop options available to the manager in. the diversified crop model are available here. Table 59 sunnarises the crops and options programmed. Figures 28 and 29 describe greenhouse space and permanent and temporary labor used for each week of the production year. Table 50 provides a compa- rison of total return to fixed costs and of net return to fixed costs for each of the temporary labor wage levels and for the 600-h0ur level of permanent employee labor without temporary employee availability. 2 at the $2.00 with net return to fixed costs of $23.17 per ft wage level, $18.h1 per ftz at $3.50 and $13.95 per rt? at $5.00, the temporary labor options are the most profitable of the programs studied. The diversified crops program returns only $2.29 per ft2. However, not return per hour of labor used are $6.63 at he $2.00 wage rate, $5.37 at the $3.50 rate, and “.33 at the $5.00 rate. The diversified crops model using 600 hours of permanent employee time and no temporary employees, and with an average wage rate of $3.31 236 me.ma ha.mn aa.m~ om.m neoaseone nanosecond 0nnonn009w «9% non mm.a bm.m mm.m mm.m coma momma Hopou «0 soon now oo.omm.m:o.a oo.omm.mmm.H oo.om~.»m~.a aw.amw.m~a sauce scene on ensues 0oz m:.ma aa.:m oe.m~ ~H.m neosxeose nanosecond 0usomn000m mph pom mo.m mo.» »~.m Hm.ma we»: gonna H000» no noon uom am.maa.owa.a pm.:wo.o~m.a ms.mwo.~ma.m so.mma.aom specs cough 0» cannon annoy am.ao ao.am mo.~e uneae>ssuo moosxmuon noon cm apg.asm Ham.»m~ oaa.mm~ oo~.Hm eases asses oo.nw omwmww co. ammom_hsom\wm.mm 0www0hsu 0awv.mmxmmmmm hHso psocsau0m 0Hh0dao>m no Anvn0as>fisd0 see. same 00hoamao anoonanom “9V x003\hson omwv x00sxnhsom co: moan noun» own: 0Hn0Hw0>n no A0000Hs>asu0 shuuom hahson Hou0>0m an noomoanso mussomaoo wnuuwAwpD sea moosxousom omNHV [lorry x00nxnhsmm.oom.mcwuwawya nil .mowss_ons oonsOnou ooaoamao no 0H0>0H msoahn> no“ mvmoo moxwu o» chsvou #0: one Hovoa .0: oflaoa 237 .aaozn 0m!— nnouusp us 63:35 40.3 00303.93 0365.093 "honed Shoals» no van-no.3! mom H060: .om 0.5m: doped 5.3.3900» on .3053 mover—.9. 83 000.336 6029'.-.’ 6003.35 anon-anon x02. non—.56.. 00.. .hiuonlua H.003 hon 00.30.0000. Inn 6003.36 «sons-00.— uoos sum .50.. co.— .h-suomloa .30.. ham 3.: 388.8. -3 .3 In: row FR (an 000"!) um ROW amen-nus . IS IS '2. E. mamwdamunnamwdanmnanw A an: S E .24.. Rue >03 98 mum 238 .533 a? 33...: an 60.5.3»: no»: 5%.. 2.0 canal—om «o 00.6: 00:38". B< "has..." 5.3a!» «o caulking—l0 you .3601 .am 0.53: .55 :3. MS. a: MS. mm..— nfi. we: >02 .60 mum mammaa m maammfimamwaamwunzmwanwa m; mmaammamanwd;nmaamma w - "a. w.. .s rls n \Mfl' ‘3 ‘ 5 ES" .3 om.mo . a.mw 00 no . shoals on .3973 100:}..30: .003 0003.35 unoiuml.l. , . 2.0—album :00: Leg 0.50: 8.. .nvohoal Douala» .50:\oo.muooorooo a 2 caviar—om :00: L09 9.50: 00; .noohoufio Panasov hagxomdo ...-......- »noqu-Eun 300: you 959. 8.. $0052.95 Pinon! 5.058.: . 239 Table 50. Model for employment of temporary labor: crOps and options produced. Crops and options Units pgoduced at: 32.00/hour ‘33.50/hour $3.00/hour Standard chrysanthemums: Pinched, plant Sep h, ) harvest Jan 2 o 0 10.008 Single-stem, plant May h, harvest Aug 2 O 1.25 2.3h Potted chrzganthemums: Plant Aug 3, harvest Nov 2 o 1.52 2.8h Plant Sep 1, harvest Nov h 5.00“) 5.003) 5.00“) Poinsettias: Buy started plants in 2% inch pots to initiate stock plant program, Jun 1 1,053.92 1,055.59 1,039.55 Sell started plants in 2% inch pots, July h 3,159.00 3,13h.76 3,116.36 Sell rooted cuttings in BR-B blocks, Aug 2 2.00 2.00 2.00 Sell stock plants to another grower in Aug 5 2.00 2.00 2.00 Produce finished plants for Christmas sale: h single-stem plants, 7 inch ) plastic pot 0 O 3.008‘ 5 single-stem plants, 7 inch ) plastic pct o o 2.008 6 single-stem plants, 8 inch ) plastic pot o o 1.008 1 pinched plant, 3 blooms, ) ) a) h inch plastic pot 6.00a 6.00a 6.00 l pinched plant, 5 blooms, a) 6 inch plastic pot 1.29 6.003) 6.00 l pinched plant, 6 blooms, ) ) a) 6 inch plastic pot 6.00a 6.00a 6.00 a) market quota 2&0 Table 50. (Cont'd). CrOps and options unit produced at: $2.00/hour $3.50]hour $5.00/hour Poinsettias (cont'd : l pinched plant, 0 blooms 6 inch plastic pot 0 0 h.00“) l pinched plant, 3 blooms, 6 inch plastic pot o 0 2.003) Easter lilies: Sell started plants Feb 1, CTF grades a) ) 10/11 3.00 3.008 3.003) 9/10 3.00“) 3.003) 3.00“) 8/9 6.00" 6.00“) 6.00“) 7’8 0 3.00‘) 3.00‘) Sell started plants Mar-2, CT? grade 9/10 0.56 0.5h 0.5h Sell finished plants Apr 2, CT? grade 9/10 0 0.02 0.02 Geraniums,_12[l_proggggg Sell from 1211 stock plant program started plants in h inch pots, rah l al.38 ho.00 h0.00 started stock plants in 7 inch pots, Jan 1 “.55 3.00 8.00 unrooted cuttings from stock, Fab 1 20.00 20.00 20.00 started stock plants in 7 inch pots, Fab 1 8.00‘) 8.00“) 8.003) started stock plants in 7 inch pots, mar 3 1.008) 1.00“) 1.00“) Geraniums,;bgz and sell progggg: Sell finished plants in inch pots for Easter (Apr 1) from unrooted cuttings purchased Feb l 0.06 0 0 Geranium.treegprgggg5: Sell from tree stock plant program unrooted cuttings, Mar 3 29sh09.18 29,h09.18 29,237.97 rooted cuttings, Apr 1 2.58 2.58 2.60 finished plants: h inch pots, Mother's Day 2.00“) 2.003) 2.00“) h inch pots, garden sales 292.12 292.12 290.1% 12 inch pots, Mother's Day 0 O 0.hh (HIV 1) dump stock plants, 12 inch pots, Jan 5 290.11 2.9h 2.h9 Table 50. (Cont'd). 2&1 CrOps and Options Uhitsgproduced at: $2.00/hour $3.50fhour $5.00lhour 5.92.0. Bedding plants Sna s Carnations none none none none none none none none none 2132 per hour, yields a return of $5.52 per hour of labor used. Of course, total return for use of all fixed resources are substantially greater for the temporary labor programs than for the 600-hour permanent employee program. Analysis of the crops and options programd indicates that the additional labor available in the temporary employee model is applied for the most part to propagation options, that is, those which yield unrooted and rooted cuttings and started plants for sale to other pro- ducers. As a matter of fact, the model as programmed under all three temporary wage levels is essentially a geranium and poinsettia propa- gation specialty firm which also produces finished crops of each. The started Easter lily program and the potted and cut chrysanthemum pptions which appear in the program likely could be replaced with additional geranius and poinsettia options if relatively slight adjustments were to be made in scheduling of major poinsettia and geranium options to enable the use of production space available at non-peak periods. This is borne out by the marginal return for greenhouse production area in those weeks in which this input limits further production. These range from $0.22 to $8.56 per ft2 in this model, that is, the total return to fixed costs would increase by this amount if one more unit of resource were available. Other crops and options progra-sed when an unlimited supply of temporary labor is made available a the three price levels are potted chrysanthe- mms, standard chrysanthemum for cut flowers, and Easter lilies grown under the controlled temperature storage (01'?) program for sale primarily as started plants to other growers. Roses, carnations and snapdragons - all cut flower crops - and bedding plants do not appear in the optimal program. 2&3 As Table 109 shows, the options and their quantities in the Opti- mal program vary relatively slightly with the wage level for temporary labor. However, as the wage level increases from $2.00 through $3.50 to $5.00, the following changes occur in the characteristics Of the components of the optimal mix: 1. A decrease in the amber Of propagation activities and the 2. 3. quantities of each in the mix occurs. These activities are primary consimers of the labor resource and tax the green- house production area less than finished crOp Options. An increase occurs in the number of, and in the quantities within each Of, the finished crop Options. For example, pinched three and four-bloc. poinsettias in It inch pots and single-stem poinsettias with h, 5 and 6 plants per 7 and 8 inch pot are not produced until the temporary labor wage level reached $5.00 per hour . At this level, the latter are produced to the limits Of market quotas whereas the former occur at one-third and one-sixth of market quotas respectively. More greenhouse production area is used as the wage level of temporary help increases. At each of the temporary wage levels the mean production area in ft2 per week utilised is 16,697 at $2.00, h9,6h3 at $3.50 and 5k,560 at $5.00. Similarly, as temporary wage levels increase, hours per week of permanent employee complement utilized increase in those periods wimpermanent employee labor is not fully utilized. For exuple, during September through November, the mean 2M: permanent employee hours per week consumed at the several wage rates is 260 hours at $2.00, 265 hours at $3.50 and 28!: hours at $5.00. 5. As temporary wages increase, the hours of temporary labor used decreases in those weeks when the permanent employee labor resource is used to the maxim, e.g. mean hours per week of temporary labor med at the several wage rates is 15,638 hours at $2.00, h,556 hours at $3.50, and M361 hours at $5.00. 6. As the temporary wage rate increases , the net return to fixed costs per ft2 of greenhouse production area decreases, e.g. $23.17 at the $2.00 level, $18.37 at $3.50 per hour, and $13.95 at $5.00 per hour. Analysis of Program Results With unlimited availability of temporary labor at the wage levels indicated, greenhouse production area ultimately becomes the limiting factor to the further utilisation of the resource. Hence, those crop producticm options which offer opportunities for producing income with a minimal requirement for greenhouse production area also offer the greatest potential for yielding maximum net return to fixed resources. Thus , poinsettias and geranitns with their numerous propagation and finished crop programs within the context of both stock plant and pur- chased starting plant material options emsrge as components of the Optimal programs. Similarly, the option to sell Easter lilies as started plants emerges. Thereafter, finished potted and cut chrysan- themum options which fit within the production space and timing 2&5 parameters appear. However, as the cost of the temporary labor input increases, the high-labor-requirement propagation options in the Optimal mix decline somewhat in favor of other crOps and Options.which make greater utilisation of the permanent employee force and the greenhouse produc- tion area. Hence, increased numbers and quantities of finished crOp Options, and of propagation Options which require greater space per unit as well as more weeks Of space per unit, appear in the mix. The l2/l geranium stock plant program is an example. At the $2.00 level of temporary employee wage, 12.55 units of stock plants are in produc- tion. At $3.50 and $5.00, the number of units Of stock plants increases to 16.00; thereby making greater use Of permanent employee time and greenhouse space during this period. At the same time, the cuttings yielded from the stock plants are sold as started h inch plants, and the additional units of stock are sold as started 7 inch plants, both options which utilise considerable quantities of the fixed labor resource and production area. On the other hand, production Of unrooted geranium cuttings, an Option requiring no greenhouse space and which can readily use temporary labor, decreases by 111 units. Similarly, as the temporary labor wage increases from $3.50 to $5.00, an additional 18 mits Of finished poinsettia options enter the mix. Guidelines for Producers Examination of the Optimal results of this program wherein unli- mited temporary labor is available yield these guidelines: 1. Propagation of started plants for sale to other growers in the form of unrooted and rooted cuttings, and partially develOped 2. 2156 plants Offer a promising alternative for producers with limited greenhouse production area and/ or permanent employee comple- ment, and with an available supply of temporary labor. Much Of the labor required for such an Operation could be accom- plished by unskilled employees with minimal. training. Given an unlimited labor supply, potted crOps appear to Offer the most profitable alternatives for production given an existing market. A comparison of the reduced revenues which would result from growing one unit Of bedding plants or cut flowers in place of a crop in the Optimal mix reinforces this Observation. Among the potted crOps, poinsettias and geraniums as finished Options and Easter lilies as started plants and finished Options appear to be the most profitable. Potted mans in general appear relatively less profitable. Bedding plants and cut flowers are indicated to be considerably less profitable than any of the potted Options. Limitations Of the Model for hplonent of Temporary Labor The return to fixed resources from the utilisation of temporary resource a 1. employees at the wage level analysed indicate this approach to be an extremely profitable one when compared to those programs which must Operate within the constraints of the permanent employee force. A number Of unrealities do exist, however, and should be considered as one contemplates possible expansion in the use Of the temporary labor In this stub, the model was examined under two labor resource situations: (a) 600 hours per week of permanent employees with 2. 3. 2h? no Option for hiring temporary employees , and (b) 1‘00 hours per week Of permanent employee work force with the Opportunity to utilise unlimited quantities of temporary employees. Perhaps there is some level of permanent employee force between too and 600 hours per week which would be more realistic than either of these levels. 0r, there may be more profitable Opportunities given a different level of permanent employee force with the Option to hire temporary employees only at known peak labor periods. Several uncertainties were not accounted for in the temporary labor program. For example , does an unlimited temporary labor supply exist! And, if it does, would temporary employees with less training and experience be able to accomplish production tasks in the same time allotted in the program for permanent employees who are likely to be better trained, and more skilled and efficient in production Operations? Further, with the use of large numbers of temporary employees, the time required of the manager and other permanent staff for recruitment , selec- tion supervision and general records management aprOpos the temporary staff would represent a considerable manpower invest- ment which, of course, would take involved permanent staff from other production activity. Thus, the efficiency of the permanent employee complement in the production phase might be markedly reduced. This factor was not adJusted for in this model. Market quotas are imposed on nearly all Of the finished crOp Options in the program. But there are no market limitations 21:8 for the propagation activities. Hence, this may favor these latter options as profitable alternatives, when in reality, unlimited markets for these products may not exist. It. For a propagation-oriented production Operation, such as the one which is indicated in this model to be able to market the large quantities of cuttings and started plants would require the develOpment of a considerable market which in turn would require establishment of a marketing staff and a budget including advertising programs. Further, additional capital would need to be invested in storages and efficient propagation , plant-handling, and shipping equipment and techniques to support so large a prOpagation specialty firm. With major emphasis on geranima propagation, labo- ratory facilities for culture-indexing of stock would be desireable. The firm would be at a competitive disadvantage if it did not utilise this method to guarantee a disease- free product. In summary, the temporary labor model offers significant insights into the potential for this alternate source of labor for the purposes Of this study. However, considerable revision is needed to account for the above and other constraints , and for the added required resource inputs not programmed in this study. Perhaps, however, the temporary labor model does indicate an Opportunity for the manager with well develOped labor management skills . CHAPTER IV SUMMARY The Objective of this study is to determine Optimal crOp combi- nations which maximise profit in the production and marketing environment of the northern Uhited States using linear programming. In addition, characteristics of crOps and Options which contribute to their occurrence, or lack thereof, in the Optimal mixes are studied. This analysis yields production management guidelines for each Of’the crops. These are useful planning aids to managers as they consider their unique set of fixed and other resources and as they do production manage- ment planning. It is important to note that the data used in this study are for the calendar year 1970. As with any economic study, continuous change occurs in technology and practices, product prices and.markets, input and output costs, and the other factors of production and marketing. These changes have been numerous since 1970 and often severe in their impact, i.e. the current energy crisis poses significant prOblems fOr producers. Fluctuations in fuel supplies and costs inject considerable uncertainty into long-range management planning. Changes such as these impose some limitations on the validity of direct applications of these findings in current floriculture production programs. However, the Operations analysis techniques remain valid, and their utilisation in management studies such as this continue apprOpriate and relevant. Observation of the impact of these changes on the currency of such an analysis only reinforces the importance of frequent critical 2&9 250 evaluations of Operative production programs. In this sense, the impact of the changing situation on the results of this study approaches reality characteristic of an actual industry situation. In the future , wholesale cut flower and plant production and dis- tribution patterns will continue to change dramatically. Managerially astute Operators bound‘by few traditions and equipped with efficient ptwsical plants rapidly are concentrating in favorable geographic areas. These floribusinessmen regularly seek and apply managerial methods to increase decision-making proficiency. They will not long neglect linear programming and other Operations analysis methods as important adjuncts to their Operations. In anticipation of this trend, there is need fOr continuing adaptive research in Operations analysis applications to the management process in comercial floriculture. BIBLIOGRAPHY 10. ll. 12. BIBLIOGRAPHY Aldrich, R. A. 1971. Energy costs and sources for greenhouse heating. Pa. Flower Gro. Bul. 2h0:1, 10. Baker, Maurice and Goodrich, Dana C. Jr. 1968. Flower retailing by mass outlets. N. E. Reg. Res. Pub. Coll. of Agr. and Environ. Sco., Rutgers—The State Univ., N. Brunswick, N. J. Bul. 817:h. Barker, Randolph. 196h. Use of line or programming in making farm management decisions. Cornell Univ. Agr. Expt. Sta. Bul. 993. Berninger, L. M. 1969. .A new era in the florist industry: what's in store for the ‘70's? Flor. Rev. lh5(3758):25, 52. Besemer, S. T. and Holley, W. D. 1966. An economic anaLysis of the United States carnation industry (Parts I, II, III). Col. Flo. Gro. Assog. Bul. 196:1-h, 197:1-h, 198:1-h. Carlstedt, Oscar G. 1959. Consignment selling versus outright purchase. Flor. Rev. 13h(3203):l9. Darling, M. J. 1960. Planning glasshouse crop production. Jour. of Agr. Econ. 1h(2):22h-233. Fisher, G. A. 1971. Greenhouse production in Ontario: production costs, returns and management practices. Ont. Farm Econ. Stud. Ont. Dept. Agr. and Food, Toronto. Possum, M. T. 1953. Horticultural specialties: a neglected segment of U. S. agriculture. Jour. Farm.Econ. 5(h):622-28. Fossum, M. T. 1969. Marketing information for commercial flori- culture in the united States and the State of New York 1967: Detroit, Michigan. Fossum, M. T. 1969. Measurements of trends in production and dis- tribution of ornamental crops in the United States. Soc. Econ. Bot. Fossum, M. T. 1973. Trends in commercial floriculture crop pro- duction and distribution: a statistical compendium for the United States 19h5-1970. Soc. Amer. Flor. Endow. 251 130 lb. l5. l6. 17. 18. 19. 20. 21. 22. 23. 2h. 25. 26. 252 Frazer, J. Ronald. 1968. Applied linear programming. pp. h-6. Englewood Cliffs, N. J.: Prentice-Hall, Inc. Goodrich, Dana C. Jr. 1968. Selected costs and returns in flower production and marketing. Agr. Econ. Res. Pub. Dept. of Agr. Econ., Cornell Univ., Ithaca, N. Y. Bul. 271. Hales, A. W. Experiences with linear programming in horticul- tural advisory work. 1972. Proc.: Second Meeting on Hort. Econ., Mcntpellier. Acta Hort. 25: lh8-167. Hall, Richard 1969. Commercial floriculture: a changing agri- business; the marketing and transportation situation. Economic Research Service. U. 8. Dept. Agr. Harsh, Stephen B. 1975. A progress report on Telplan activities. Dept. of Agr. Econ. Michigan State Univ., E. Lansing, Michigan. Hazell, Peter B. R. 1970. Rational decision making and parametric linear programming models for combining farm enterprises under uncertainty. Unpublished Ph.D. Thesis, Cornell Univ., Ithaca, N. Y. Heady, Earl O. 1952. Economics of agricultural production and resource use, p. 21. Englewood Cliffs, N. J. : Prentice-Hall, Inc. Heady, Earl 0. 195A. Simplified presentation and logical aspects of linear programming techniques. Jour. of Farm Econ. Heady, Earl O. and Candler, Wilfred. 1958. Linear programming methods, pp. 1-195. Ames: The Iowa State Univ. Press. Jarvesco, Elmar and deGraaf, Johannes. 1967. Productivity of resources in the greenhouse carnation industry in Massachusetts. Univ. of Mass. Expt. Sta., Amherst, Mass. Bul. 56h. Kearl, C. D. 1968. A half century of cost accounting on New York Farms. Cornell Univ. Misc. Bul. 90:3. Kelly, Wayne. Dept. of Agr. Econ., The Pa. State Univ., University Park, Pa. Telephone Interview, 1971. Kress, George 1972. Study shows mass market attitude of whole- salers. Flor. Rev. 151(3900):32. Laurie, A. and Kiplinger, D. C. l9hh. Commercial flower forcing, pp. 558-559. Philadelphia: The Blakiston Co. 27. 28. 29. 30. 31. 32. 33. 3h. 35. 36. 37. 38. 39. ho. 253 Lloyd, C. and Perkins, R. J. Profitable glasshouse cropping plans: linear programming analysis for varying resource combination. Uhiv. Manchester. Bul. 108 HI:1 MeJaard, D. 1969. The importance of farm comparison and linear programming in farm.management research of glasshouse crops. Acta Hort. 13:10h-ll2. Simmonard, Michal. 1966. Linear programming, p. 2. Englewood Cliffs, N. J.: Prentice-Hall, Inc. Stevens, George A. 1969. Economic model for flower production. Mimeo Ext. pub. Stuart, Neil 1972. All-in dustry management seminar held in Detroit. Flor. Rev. 150(3876):23-2h, h3, 65-67. Tukey, L. D. 1963. Heatirg degree days for selected locations in Pennsylvania. The Pa. State Univ. Agr. Expt. Sta., University Park, Pa. Prog. Rpt. 251. Vaut, Gregory A.; Christensen, Robert L.; Slane, Thomas C.; and Smiarowski, Joseph F. 1973. Greenhouse linear programming. Dept. of Agr. and Food Econ., Univ. of Mass., Amherst, Mass. Pub. 93. Voigt, Alvi O. 1972. Exploration of new developments in the flower industry, an assessment of trends. Coop. Ext. Svc. The Pa. State Univ., University Park, Pa. Washburn, P. A. l9h8. Greenhouse costs. Flor. Rev. 103(266h):31. White, E. A. 1915. Principles of floriculture. N.Y.: The MacMillan Company. . 1969. Another way to sell flowers. Can. Flor. 6M?10):26-27. . Undated. Computer on the farm. Coop. Ext. Ser. The Pa. State Univ., University Park, Pa. . 1970. Commercial and.industrial service (Contract Rate C). Consumer Power Co. Jackson, Mich. Eleventh Revised Sheet 8. . 1971. Cornell recommendations for commercial flori- culture crops. N. Y. State Col. of Agr., Cornell Univ., Ithaca, N. Y. 25h hl. Personal conversation with Wayne Kelly. Extension Farm.Manage- ment Specialist. The Pa. State Univ., University Park, Pa. September 1971. h2. Personal correspondence and telephone interview with Professor R..A. Aldrich, Dept. of Agr. Eng., The Pa. State Univ., University Park, Pa. January 1971. h3. . 1969. Produce News. March 8:1, 10. hh. This study. 111041an STATE UNIV. LIBRARIES mWWWWWWWI!llllWHIIIWI’WIW 31293010632879