You are working as a consultant for a local landscape supply

You are working as a consultant for a local landscape supply company. One of the possibilities that has consistently come up in conversation with the owners is making your own mulch instead of continuing to buy mulch in bulk from the distributer. As part of your presentation, you have been asked to do the research and make a recommendation to the company as to whether or not this course of action is financially prudent. The pertinent data is listed below. What should they do? What other information do you need in order to help this company? You should utilize outside research where appropriate in your response. Prepare a report, complete with charts and graphs, that you will present to the owners as your formal consulting recommendation.

Currently purchase mulch from a wholesaler for $17/yard.

We sell mulch for $35/yard with a $30 delivery fee.

Solution

Purchase price of mulch = $17 per yard.

Selling price of mulch = $35 per yard.

In order to decide, if we should make our own mulch, we have to determine how much would it cost us to make our own mulch.

The questions that need to be asked are;

Is the supplier providing mulch in the form of plastic sheeting or in the form of bark chips? Plastic sheetings are permanent and costs more. Bark chips are temporary and costs less.

What are the various types of mulches that can be considered amongst the options so as to lower the cost of production?

What type of mulches are in demand? Is the market for organic mulches big or is the market for rubber mulch and plastic mulch is bigger?

Equipments, plant and machinery will have to be purchases to make mulch. Some equipments that can be considered are: compost dumper, aluminium buckets, standard waste containers, coloring unit, feeders and grinders.

(charts and graphs have not been provided as there is no data available regarding cost of production of mulch).