Senaba

Senaba
You have owned an ostrich farm close to Pasina for 2 years now. Among other things
your farm produces 1000 ostrich eggs a month. The production will not grow in the next
few years. For the eggs you have two regular customers from Pasina who buy your entire
stock. You have recently informed their respective firms of your plans to increase the
price by 100% (from $6 to $12 a piece). This will cover the necessary investments.
Laboratory tests done by the Ministry of Agriculture have shown that the damage your
enterprise is causing to the environment is extremely high. You will have to adapt your
farm equipment to meet the new national requirements. Besides lacking the technical
know-how, you have a financial problem. The high costs of investments and a temporary
loss in production are forcing you to increase your prices drastically. If you don’t, you
might just as well close down due to an impending bankruptcy.
Your eggs are top quality and so is your ostrich meat. However, the meat sales are not up
to those of the eggs and your frozen stock is growing fast. The selling price is $30 per
kilogram, which leaves you with at least $15 pure profit.
In a few minutes the two purchasing agents, Mr Watina and Mr Karasi from Pasina,
will arrive. You have scheduled the appointments consecutively.