You are a management accountant for an organic fruit farm in Teeland. The farm grows apples and produces apple juice, both of which it sells at local markets and to retail companies. The farm's management team are considering its future strategy, and have asked for your help in assessing its macro-environment. Required: Using the information below, analyse the THREE key factors in the environment which are likely to have most impact on the farm. Organic farming and the food industry in Teeland Organic food must be produced using environmentally friendly farming methods, so no genetically modified (GM) crops, growth enhancers or artificial pesticides and fertilisers may be used. Any farmer claiming to be organic must be certified by a government-approved body, such as the Teeland Soil Association. Food producers must also comply with government-approved regulations regarding the production, packaging and labelling of food. Regulatory bodies have the authority to forbid the use of misleading labels and product descriptions, and can issue fines for inappropriate production. In extreme cases, regulatory bodies can close down operations which regularly fail to comply with regulations for production, packaging and labelling of their products. Consumers increasingly want food that is healthy and is sourced both ethically and locally. Consequently, although organic food was initially perceived as a luxury niche product, it is now increasingly seen as a lifestyle choice by those consumers who regard non-organic products as more harmful to health and the environment. Major supermarkets in Teeland have started to stock more organic and locally grown food. A key issue for all farmers is the weather, which significantly affects the volume (yield) and quality of a crop and hence the market price. Organic farmers are unable to use artificial fertilisers or pesticides, so have developed alternative high-tech farming methods to improve profitability and cash flow. Weather information systems help plan planting, harvesting and irrigation. Climate-controlled growing tunnels and stores provide a pest-free environment with temperature, light and humidity control. These methods increase yields, extend the possible growing season and allow crops to be stored for longer before usage or sale, with no loss of flavour or quality.

You are a management accountant for an organic fruit farm in Teeland. The farm grows apples and produces apple juice, both of which it sells at local markets and to retail companies. The farm's management team are considering its future strategy, and have asked for your help in assessing its macro-environment. Required: Using the information below, analyse the THREE key factors in the environment which are likely to have most impact on the farm. Organic farming and the food industry in Teeland Organic food must be produced using environmentally friendly farming methods, so no genetically modified (GM) crops, growth enhancers or artificial pesticides and fertilisers may be used. Any farmer claiming to be organic must be certified by a government-approved body, such as the Teeland Soil Association. Food producers must also comply with government-approved regulations regarding the production, packaging and labelling of food. Regulatory bodies have the authority to forbid the use of misleading labels and product descriptions, and can issue fines for inappropriate production. In extreme cases, regulatory bodies can close down operations which regularly fail to comply with regulations for production, packaging and labelling of their products. Consumers increasingly want food that is healthy and is sourced both ethically and locally. Consequently, although organic food was initially perceived as a luxury niche product, it is now increasingly seen as a lifestyle choice by those consumers who regard non-organic products as more harmful to health and the environment. Major supermarkets in Teeland have started to stock more organic and locally grown food. A key issue for all farmers is the weather, which significantly affects the volume (yield) and quality of a crop and hence the market price. Organic farmers are unable to use artificial fertilisers or pesticides, so have developed alternative high-tech farming methods to improve profitability and cash flow. Weather information systems help plan planting, harvesting and irrigation. Climate-controlled growing tunnels and stores provide a pest-free environment with temperature, light and humidity control. These methods increase yields, extend the possible growing season and allow crops to be stored for longer before usage or sale, with no loss of flavour or quality.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 6.3A

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