The Poultry Project: Sell at Eight Weeks or Wait for the Festival?
The JSS3 Business Studies Club at Unity Junior Secondary School invested in a poultry project. The club bought 40 day-old chicks at ₦350 each. Feed and drugs up to eight weeks cost ₦1,100 per bird, and litter, transport and other expenses came to ₦6,000 in total. The club expects about 4 in every 100 birds to die before eight weeks. A buyer has offered ₦2,800 per matured bird at eight weeks. The agriculture teacher says the birds could instead be kept to twelve weeks and sold at ₦4,000 each during the town festival, but the extra four weeks would cost another ₦900 per surviving bird in feed, and a further 5 in every 100 birds may die in that period. The club has ₦15,000 left in its account and must decide by the end of the week. Some members want the money now; others want to wait for the festival.
1. Calculate the expected profit if the birds are sold at eight weeks. Show all workings and round birds to whole numbers.
Read the worked answer
Costs
- Chicks: 40 × ₦350 = ₦14,000
- Feed and drugs: 40 × ₦1,100 = ₦44,000 (bought for all 40 chicks)
- Other expenses: ₦6,000
- Total cost = ₦64,000
Birds sold
- 4% of 40 = 1.6 deaths, so survivors = 40 × 0.96 = 38.4. Round down to 38 birds, because rounding up would assume a bird that may not exist.
Revenue and profit
- 38 × ₦2,800 = ₦106,400
- Profit = ₦106,400 − ₦64,000 = ₦42,400
Rounding down is a deliberate, conservative choice: a business plan that only works if nothing goes slightly wrong is not a plan.
2. Calculate the expected profit if the birds are kept to twelve weeks and sold at the festival.
Read the worked answer
Start from the 38 surviving birds.
Extra deaths: 5% of 40 = 2 birds, so about 36 birds reach twelve weeks.
Extra feed: ₦900 per surviving bird × 38 birds kept through the extra period = ₦34,200. (If only the 36 that live are counted, the figure is ₦32,400; either way, state the assumption.)
Costs
- Cost to eight weeks: ₦64,000
- Extra feed: ₦34,200
- Total cost = ₦98,200
Revenue
- 36 × ₦4,000 = ₦144,000
Profit = ₦144,000 − ₦98,200 = ₦45,800
Waiting gives about ₦3,400 more, roughly 8% on the eight-week profit - a small gain for four extra weeks of risk and feeding.
3. Recommend one option and explain what non-financial factors the club should weigh.
Read the worked answer
Recommendation: sell at eight weeks, unless a firm festival order and feed on credit are both confirmed in writing.
The reason is the cash constraint. Keeping the birds needs about ₦34,200 of extra feed, but the club holds only ₦15,000. It would have to buy on credit or sell birds early - either choice changes the arithmetic above. The extra profit of ₦3,400 is also small compared with the money at risk: disease, a price drop, or the festival buyer failing to appear would wipe it out in one week.
Non-financial factors to weigh:
- Risk: four more weeks of disease and theft exposure.
- Certainty of the buyer: a verbal promise is not an order.
- Reputation: disappointing the eight-week buyer may close a reliable market.
- Alternative use of the money: ₦106,400 in hand could start a second batch sooner.
Finally, the club should keep a cash book recording every naira spent and every bird lost, so next year's decision rests on records rather than memory.