The effect of irrigation on pounds solids per box is not considered
in this game. A constant 5.69 pounds solids per box or 1.26 gallons of
FCOJ per box is utilized.
Prices
The two components which determine revenues are yield and price.
Even though yield may be increased, in certain years the realized
price may be such that revenues do not cover the increased irrigation
costs. On-tree prices used in this game are selected at random from
a normal distribution with the following characteristics:
mean = $1.93 per box
standard
deviation = $ .68 per box
As a result of these assumptions the probability that the price will
fall between $2.61 and $1.25 is 67 percent.
MAKING THE DECISION
The organization of the individual team, division of the responsi-
bilities, and the analysis to be conducted is left up to the team
members. Regardless, decisions must be made for the system, size and
level of irrigation. A suggested approach is to explore the effect of
the level of irrigation and the system of irrigation at different sizes
and assumed values of prices, number of applications and yield. Work-
sheet A presents a framework for the comparison of the levels of irri-
gation. A partial budgeting approach can then be followed to analyze
the net return after irrigation costs. A completed Worksheet A is
included for system A, size of 60 acres, and an on-tree price of $2.00
per box. Worksheet B extends the analysis to the comparison of the alter-
native types of irrigation systems, specifying the size and level of
irrigation. Worksheet C is a summary of the analysis conducted in
Worksheets A and B enabling a comparison of both the level of irrigation
and system.