Cost and Revenue Curves Simulation Memo

TO: John Sunkist, President FROM: John Doe, Chief Operating Officer DATE: May 19, 2005 SUBJECT: Cost and Revenue Curves at Fresh Farm Orange Juice Company I have had the opportunity to analyze the cost and revenue structures from the three years of production in California, Texas, and Florida. Marginal and average cost curves will be discussed and I will discuss why the costs are lower in some states and not in others. Shut downs and short runs …

…to expand their market will help increase revenue and profit by creating a variety of other juices. Another recommendation for Fresh Farm would be is to analyze their demand and supply curves, and find ways to influence supply and demand shifter to their benefit. This will help Fresh Farm to look at different revenue concepts and to be able to relate them to cost concepts in order to analyze the profit possibilities for their organization.