The aim of this report is to establish a suitable site location for a new milk processing plant for Brook House Milk Processors. Several factors abound on the selection of an appropriate location for a milk processing plant. In capturing the market niche, minimizing production cost, accessing raw materials, utilizing infrastructural systems in place, capital equipment facilities advantage, efficient cheap labor and the favorable climatic conditions are important in selecting an appropriate location in order to derive the maximum benefit from the foregoing factors to the company. This research is geared to harness the best location parameters to be considered in selecting the site for the new milk plant. The research is geared to determine if a milk plant located in the countryside will accrue the highest returns to Brook House Milk Processing Company. Further to these, the research will seek to establish if adequate resources are allocated in the area to facilitate an entrepreneurial spirit in order for the community around to benefit from the presence of the milk processing plant.
Nature and Scope of the study
The study is about the investigation of a location of a milk processing plant and it will be conducted in the country side and will cover a vast area in view of establishing the correct site to build the factory. The study will explore literature relevant to the site location of the processing plant examine the factors to be considered in selecting the location and the method of collecting data to be used in the research. The data collection will cover respondents in business premises, schools, residential homes, administration offices, other industries located in the area, farmers, and the general public at random. All respondents in each of the mentioned areas will be crucial in successfully carrying out the exercise to establish the appropriate site location for the milk processing factory. Australia has a high consumption of milk and its products. The various neighborhoods in Australia have become more structured through travel and movements with such tendencies changing from time to time. Such changing trends offer milk product developers and milk marketers in Australia a challenge to decide where to build a milk processing plant in order to take advantage of the emerging trends. The research will cover the country side in studying on these trends and establishing the market needs of milk and its products so that appropriate factors are taken on board to help in mitigating the extensive milk and milk products needs of society with minimal cost in respect to Brook house Milk Processing Company.
Objectives of the study
To determine if the location of a milk processing factory in the countryside is beneficial to Brook House Milk Processors.
To establish if the prevailing climatic conditions are favorable for a milk processing plant.
To find out if the cost of production in the countryside will be minimized due to availability of raw materials and cheap labour.
To ascertain the sustainability level of a huge business venture in the countryside owing to the factors on the ground.
Hypothesis
Alternative Hypothesis
There is a significant benefit of constructing a milk processing plant in the countryside due to reduced cost of operation.
Null Hypothesis
There is no significant benefit of constructing a milk processing plant in the countryside due to reduced cost of operation.
BROOK HOUSE MILK PROCESSING COMPANY
Brook House Milk Processing Company is an Australian company with a 70 Australian and 30 Multinationals shareholding portfolio. The company has three fully fledged factories operating in Australia and in New Zealand supplying its products to the Australian Market, other European countries and overseas. The company is a major contributor to the regions economy. It has several milk collection points and cooling units and its current installed processing capacity is 950,000 litres of milk per day. Besides milk production, the company is involved in the development and sustenance of the livestock sector through various partnerships with farmers, dairy cooperatives and other stake holders in the industry. Brook House Milk Processing Company has registered a continuous growth of all its subsidiaries by investing in upgrading of its processing capacity with the latest available technology in order to process more milk from the milk vendors and farmers and also to provide the consumers with a reliable supply of the companys products.
In continuing this streak of success that the company has had since inception, a fourth milk processing plant was found necessary to further consolidate its operations and reduce cost of production due to long distances covered either to deliver milk to the existing factories or to deliver the companys products to its ever growing clientele. This research will be in handy to examine the factors in consideration of the location of the proposed factory and it will help put all circumstances surrounding the establishment of the factory in perspective so that the best decision is reached on the site location.
According to the Australia Dairy Industry Council Journal, (2008), the Australian dairy industry has long recognized that its long term growth and profitability is closely linked to its ability to be world competitive as well as develop and retain global export markets. Brook House Processing Plant in its long term strategy intends to increase its market share both locally and in foreign markets. The Australian and the global dairy markets are registering a sustained period of demand growth due to the growth in both population and income hence resulting in a change in the dietary patterns of households and new opportunities for dairy products in satisfying this demand.
Due to the current production capacity of Brook House Milk Processors, it has been unable to cope with this unprecedented growth. The company faces a combination of expensive haulage of raw materials to its existing branches for the purpose of production and the different seasonal conditions that affect milk production. The increased input costs, expensive labour and infrastructural issues have had a long standing effect on the companys profitability. These situations have presented the company with a unique set of challenges and opportunities at the same time. An appropriate action was found necessary to reduce the effects of the prevailing circumstances on the company and take advantage of a resourceful strategic new factory in order to improve the overall performance of the company and exploit the benefits accruing from the location of factory due to reduced cost of production
The farmers who provide milk to the company travel long distances to deliver the milk to the cooling units and transfer of this milk to the main processing plant has always posed a challenge to the company due to vehicle breakdowns and the dilapidated rural roads network. This has caused the company to invest more on heavy duty vehicles and sometimes organize pick up points near the farmers dairies to ensure continuous supply of milk.
New challenges of drought and climatic changes in some parts have had the prices of hay to go up hence affecting the prices of milk from farmers. This has been absorbed by the company without passing the burden to the consumer since there is already stiff competition in the dairy industry.
The increased demand has made it necessary for the company to increase its supply network in order to reach the market and ensure the demand is met with a continuous supply of milk and milk products made by the company so that the consumers build a preference for the products and offer continuous support.
This research is motivated by the importance of evaluation of the companys growth strategy to ensure continuous market presence in the supply of milk and milk products in light of the prevailing market conditions that necessitates more production but at the minimal cost. Since the rural market demand is on the rise and most raw materials are readily available in the country side, a new factory in the country side will be the solution in reducing the operating costs of Brook House Milk Processing new plant and ensure maximum returns. The government incentives to industries operating in the rural areas will be an advantage that will benefit the creation of the milk processing plant in the country side. The operating costs arising from the poor infrastructural facilities will be eliminated as the factory will be located in an area with an efficient mechanism of accessibility to raw materials and inputs.
The availability of large and cheap tracts of land in the country side will offer room for future expansion and offer space for other activities that can be beneficial to the company at a low acquisition amount. Cheap labour in the countryside will be in handy to reduce the expenses on labour on the sections that are labour intensive. The current limiting capacity of the Brook house processing plant is another motivating factor that makes it necessary for the new plant to be located in an area that has expansion capabilities as well as offer advantage of space in order to increase the amount of products made to meet the growing demand.
The companys Corporate Social Responsibility in partnering with the local communities in sustainable projects like provision of clean water, enhancing security, lighting dark areas, community projects, and community infrastructural development aimed at improving the living standards of the people will better be achieved in the country side which has a great potential for growth.
According to the Australian Government National Land and water resources audit report (2007), the dairy industry is Australias fourth largest agricultural Industry. The other three are grains, beef and horticulture. The report further states that the Australian dairy industry has the assets and on-farm processing and marketing skills to produce more milk and sell more products than at any other time in its history which means that the dairy industry has improved markedly over the years. The proportion of dairy farms with native vegetation has fallen over the years although this varies from region to region. The fall in the proportion of the dairy industry land covered by native vegetation is due to the restructuring of the dairy industry and subsequent contraction or movement of the industry to more productive areas with less native vegetation. The industry is mostly located on productive soils however the intensive nature of dairy production results in substantial inputs in nitrogen and phosphorus. Irrigation induced salinity is considered a threat to the condition of the industrys soil assets in most dairy regions.
Presentation on Opportunities for Investment in the Dairy Industry in Western Australia (Frapple, 2007), brought to the fore the competitive advantage that Western Australia has in the dairy industry. The average dairy farm in Western Australia produces 1.3 million litres per year which translates to an average of 3,561 litres per day. Brook house milk processors can attain this benchmark and surpass it with proper mechanisms in taking advantage of the appropriate location benefits that are in the country side. New Zealand investors have set up new farms with over 1000 cows in each while the successful larger farmers are investing in more land, cows, automated milking, robot calf nurseries and irrigated feed production. Such investments by farmers ensure efficient milk supply to the factory and sustained production is maintained. Both irrigated, and dry land farming systems are successful in High milk quality - low bacterial count, good flavour colour. Quality is paramount in milk production and the primary quality due to good farming systems is a great benefit to the milk plant that processes the milk. Repeatable and predictable climate in production areas with a low disease status and access to grain and pasture is a good location for a dairy plant because the milk herds will be healthy and will give quality milk. Areas identified for expansion of production and a dairy industry well positioned for
Growth has cost, production and market advantages that will improve the profits of the industry. Brook House Milk processing company can take advantage of such settings in the country side with support from the government which is focused on expanding the dairy industry.
According to Barnett, Robertson and Russell, (2008) the major waste material from processing in the dairy industry is water. The water removed from the milk can contain considerable amounts of organic milk products and minerals while on the other hand cleaning of plant results in caustic wastewater. In these cases the factory must find ways of minimizing the amount of both the organic and inorganic material in the wastewater, and methods of reducing the total volume of wastewater released. These methods involve improved techniques of recovering dissolved material and greater recycling of water. The dairy industry like other industries in New Zealand has come under increasing pressure to improve its environmental performance. The pressures for change in New Zealand have come from changes in environmental legislation, trade negotiations and customers who are concerned about the conditions in which the product they are purchasing is manufactured. A variety of clean water discharges are produced by dairy processing operations. These include storm water, cooling water, condensate (steam and evaporator), and permeates from membrane filters. These clean waters are usually contaminated to various degrees and may require treatment prior to discharge or reuse. Problems with the disposal of wastewater have resulted in attempts to reduce the volume of wastewater and the components of the wastewater. At some sites, water is in short supply and the reuse of water is an attractive option. Brook house Milk processors can adopt some strategies like, minimizing the use of water in the present plants and reusing water where possible without treating it first, treating wastewater to allow its reuse, optimize the use of reused water and design or select the new plant to use less water in order to achieve the optimal water usage in the factories.
Environmental guidelines for the Australian dairy processing industry (1997) journal notes that, poorly treated wastewater with high levels of pollutants caused by poor design, operation or treatment systems, creates major environmental problems when discharged to surface water or land. Such problems include contamination and de-oxygenation of streams and waterways by direct discharge or run-off of inadequately treated wastewater, excessive concentration of nutrients such as nitrogen and phosphorus in surface and subsurface waters which contributes to excessive growth of plants and algae blooms which makes downstream water unsuitable for domestic, agricultural and industrial uses, land degradation and damage to pastures and crops which in the long-term will lead to damage to soil productivity. The selection of a site for the construction of the new dairy plant for Brook House Milk processors should take into consideration nearby land uses, possible future developments, the volumes and nature of wastes produced and the proposed nature of waste recycling, reuse or disposal. Depending on the proposed waste disposal system, adequate land should be available for treatment of wastewater. Soil types should also be assessed on site to check whether they can provide reasonable drainage and have a good capacity to retain nitrogen, phosphorus and organic matter. Soils with textures ranging from medium loams to medium clays are suitable. Sandy soils are not suitable because of the risk of leaching of contaminants into underlying groundwater. Similarly, wastewater should not be applied to heavy clay soils where water logging or surface run-off may occur.
Dairy plants and their associated wastewater treatment plants should not be located on a flood plain and should be a sufficient distance from surface water bodies and wetlands to reduce the risks of contamination caused by run-off or accidental spills. Similarly, wastewater treatment and disposal areas should not be sited above major ground water recharge areas such as gravel or sand beds or fractured rock aquifers. Air modeling studies may be necessary at the design stage for large operations when the buffer distances are close to the recommended minima. Site of the new dairy plant should also consider the need to protect sensitive natural water resources. Thus the new dairy plant should not be sited within 100 metres of surface waters, nor be located on a flood plain or in declared special water supply catchment areas, unless adequate protection of surface and ground waters can be done by the company in order to ensure a clean and safe environment.
Meurer-Grimes, (2010) notes that Australias dairy industry is a significant player in the global dairy trade. Asia plays a particularly important role as the key export market for Australian dairy products, primarily cheese and skim milk powder. An increase in global demand for dairy and drought in several regions with high dairy production have created historic highs in commodity prices for dairy products. The Australian domestic market is dominated by retail sales and branded products. Around 70 per cent of Australias dairy markets are mature markets (Australia and Japan) with higher GDPs, good penetration of health care and ageing populations. Consumers are generally aware of the importance of health and nutrition and prepared to spend on functional foods. Dairy production in Australia has undergone radical change in the last decade and dairy producers continue to adapt after almost a decade of drought conditions. Climate change and the resulting water shortages force the relocation of many farmers into higher rainfall areas or a switch from a pasture-based production system to lot feeding. The demand for more energy efficient production processes forces a continuous review of manufacturing practices for dairy products. Despite the changes to the industry, Australian dairy products are in high demand globally due to their high quality, product consistency, food safety and green and clean image. Brook House Milk Processing Company should strive to satisfy the demands of such diverse markets and consumer populations and continuously create new opportunities in those markets, doing so amidst a radically changing production environment. It should have a mechanism that will ensure a constant review of products and initiate new product ideas and process technologies as well top notch innovation.
New Zealand Trade and Enterprise, issue 3 (2007), states that New Zealand accounts for approximately 33 percent of the world trade in dairy products and it also accounts for about 2 percent of world dairy production, but exports more than 95 percent of all its products. This is a stark contrast with the global trend where approximately 95 percent of total milk production is consumed within the country of origin. This means that the local market has been largely ignored which presents Brook House Milk Processors an opportunity to do extensive marketing locally for its products and capture the entire market. Development of functional foods is a growing trend in New Zealands dairy industry, and includes products such as low-fat, high calcium and protein milk, and biomedical and bio-health products, such as colostrums based health supplements. Organic dairy production is growing fast. All these are new ground that the company can break into in diversifying its market stretch. All the above reviews give theoretical and empirical framework in which the study is based on.
RESEARCH METHODOLOGY
RESEARCH DESIGN
The research design is a conceptual framework within which the research will be conducted and its the blue print for the collection, measurement and analysis of the data to be collected. There is a need for research design in this project in order to facilitate advance planning of data collection methods and analysis techniques to ensure availability of time, staff and other resources. Research design will also be crucial in helping in the organization of ideas and a framework within which the study will be conducted and to look for mistakes and other shortages long in advance before they are done. It will also facilitate smooth production of research within minimum expenditure and maximum value will be realized. The design will give others time for their comments and critical evaluation before the actual research is carried out. This will provide a comprehensive review of the proposed study. The research design for this work will help Brook House Milk processors in determining the importance of the study and provide funds for the research work.
Research Instrument to be used in the study.
Survey research design will be used in this project. This design method will be used because of the low cost and easy accessibility of information. Conducting accurate and meaningful surveys is one of the most important facets of research. The survey research design is a very valuable tool for assessing opinions and trends. Even on a small scale, judging opinion with carefully designed surveys can dramatically change strategies. In research even with unlimited budget, time and resources, 100 accuracy may not be achieved. Opinions, on all levels, are very fluid and can change on a daily or even hourly basis. Despite this, survey research design is a powerful research tool in obtaining an accurate representation of opinion.
Advantages of the Survey research design.
Survey research design is relatively inexpensive and it is useful in describing the characteristics of a large population. No other method of observation can provide this general capability. They can also be administered from remote locations using mail, email or telephone. Consequently, very large samples are feasible, making the results statistically significant even when analyzing multiple variables. Many questions can be asked about a given topic giving considerable flexibility to the analysis. There is flexibility at the creation phase in deciding how the questions will be administered as face-to-face interviews, by telephone, as group administered written or oral survey, or by electronic means. Standardized questions make measurement more precise by enforcing uniform definitions upon the participants. Standardization ensures that similar data can be collected from groups then interpreted comparatively. In survey research design, high reliability is easy to obtain by presenting all subjects with a standardized stimulus which will greatly eliminate observer subjectivity.
Dis-advantages of the Survey research design.
A methodology relying on standardization forces the researcher to develop questions general enough to be minimally appropriate for all respondents, possibly missing what is most appropriate to many respondents. Surveys are inflexible in that they require the initial study design (the tool and administration of the tool) to remain unchanged throughout the data collection. The researcher must ensure that a large number of the selected sample will reply. It may be hard for participants to recall information or to tell the truth about a controversial question.
To counter the disadvantages focus will be channeled towards developing questions that are appropriate for all the respondents and which will carry the weight of the main context within which the research will be done. The researchers will be asked to stick to the initial study design because this will be the bedrock for the study and it is upon which all the respondents will be required to answer the questionnaire. Researchers will also interview the most willing respondents and the questions will be non-controversial in order to ensure easy capture of information.
SAMPLE SIZE AND SAMPLING TECHNIQUES
The sample Size is the number of items to be selected to make the sample. Sample size is one of the four inter-related features of a study design that can influence the detection of significant differences, relationships or interactions (Peers, 1996). Target population will be the residents of the target area, dairy farmers, administration officials and businesspersons. The sample size that will be used in the study will be efficient, effective, representative, reliable and flexible to use in covering the vast population of Australias country side. The total sample size to be used is as below
WomenMenChildrenDairy Farmers ClergyAdmin. OfficialsHome OwnersSmall BusinessesMedium BusinessesLarge Businesses
Total number of sample that the study will use is 50.
Sampling Technique
This is the method used to select the items to include in the sample from the population. Stratified sampling technique will be used to select each group of respondents to participate in the study. Stratified sampling is a method of sampling from a population and it is used when the population is heterogeneous, or dissimilar, where certain homogeneous, or similar, sub-populations can be isolated into groups or strata. The sub-populations in the country side vary considerably and each sub-population (stratum) will be sampled independently out of which individual elements will be randomly selected. The main reasons for using this sampling technique are that, dividing the population into distinct, independent strata can enable researchers to draw inferences about specific subgroups that may be lost in a more generalized random sample. Secondly, utilizing a stratified sampling method can lead to more efficient statistical estimates (provided that strata are selected based upon relevance to the criterion in question, instead of availability of the samples). Thirdly, it is sometimes the case that data are more readily available for individual, pre-existing strata within a population than for the overall population in such cases, using a stratified sampling approach will be more convenient than aggregating data across groups. Lastly, since each stratum is treated as an independent population, different sampling approaches can be applied to different strata, potentially enabling researchers to use the approach best suited (or most cost-effective) for each identified subgroup within the population.
The strata will be mutually exclusive. Every element in the population will be assigned to only one stratum. The strata will also be collectively exhaustive as no population element will be excluded. Random or systematic sampling will be applied within each stratum. This will improve the representativeness of the sample by reducing the sampling error.
Advantages and disadvantages of stratified sample technique.
A stratified sample will provide greater precision than a simple random sample of the same size. Because it provides greater precision, a stratified sample will require a smaller sample, which will save money. A stratified sample can guard against an unrepresentative sample (e.g., an all-male sample from a mixed-gender population). We can ensure that we obtain sufficient sample points to support a separate analysis of any subgroup.
The main disadvantage of a stratified sample is that it may require more administrative effort than a simple random sample. This will be countered by ensuring that the researchers are well equipped to tackle all the variables of the study.
As my research will benefit the entire community with benefits owing to the location of the milk processing plant in their area accruing to every household, I am sure many respondents will want to participate in my research. I expect my response rate to be more than 75.
DATA COLLECTION TECHNIQUES
The techniques that I will use for my data collection include a questionnaire and abstraction from records methods. I will launch my survey in the month of January and end the survey in the month of April. During this period the farmers will not be very busy as it will be low season in milk production.
Questionnaire Method
I will prepare a list of standard questions to fit the inquiry of this study. The questionnaire will be sent by post to selected institutions in the countryside accompanied by a letter explaining the purpose of the study and a self addressed envelope. The letter will also contain the time period that the questionnaire will be re-posted back. Enumerators also will be used to administer the questionnaire. During the monthly regional dairy farmers group meetings, I will initiate random interviews and the questionnaire will be administered in the various discussion group meetings held by the Australian Dairy Insight.
Advantages of Questionnaire method include the method being good for extensive inquiry as the most critical areas are covered under the set of questions. The respondent has enough time to carefully consider the answers as the questionnaires can be picked within a period of time. The method is free from personal bias.
Disadvantages are that some questionnaires may never reach their intended destination and most people ignore the questionnaire unless there is an incentive. To tackle the disadvantages mentioned the same questionnaire will be given to enumerators who will administer it to a selected number of people, read with the respondent explaining the purpose of the study then give a time duration when they will come back to collect the questionnaire. Using enumerators will ensure extensive inquiry and most of the questionnaires will be filled and collected on time.
Abstraction from records
This technique of data collection will be used to collect secondary data whose main sources will be journals, library books and newspaper commentaries among others. In using this method, attention will be focused on the purpose of the data, how the data was collected, how it was summarized and presented, the accuracy of the data and the interpretation made.
Advantages of abstraction method include Information being cheap to collect as the materials are readily available, it takes less time to get the required information and a large quantity of data is available on the subject of Dairy farming in Australia and its impact on the region and beyond.
Inaccurate responses will be tackled by developing open ended questions which will allow for spontaneous responses.
DATA ANALYSIS
The data collected will undergo four processes in its analysis and I will first check for completeness and validity of the data before analyzing it.
Data editing will be done once the raw data is obtained, where omissions, cancellations, duplications or any errors will be eliminated from the data. Original responses will however not be changed. The data will be checked for accuracy and logged in entering the data into the computer transforming the data and developing and documenting a database structure that integrates the various measures.
Coding of the data will follow as Absolute values or scores will be assigned to some attributes observation or judgments. This is called descriptive statistics which is used to describe the basic features of the data in a study. They will provide simple summaries about the sample and the measures. Together with simple graphics analysis, the descriptive statistics form the basis of virtually every quantitative analysis of data. For Example, the table below shows coding the values and the observations.
Strongly DisagreeDisagreeNeutralAgreeStrongly Agree
Classification of the data will then be done into groups or intervals with similar characteristics. Mass data will be condensed through classification. Tabulation of the data will finally be done where different variables in the data will be put in one frequency table to make it easy to compare and contrast and further to enhance operation of mathematical manipulation.
By using the frequency table, I will examine one data at a time to display the number of responses and the cumulative percentage. By using the frequency table, I can be able to perform an eye-ball check for any obvious data. I will use the bar and pie chart to display data visually. Bar charts will be used for comparison and pie charts will be used to display the percentages.
Timescale
EMBED MSGraph.Chart.8 s
Resources required.
To complete my research I will need access to Microsoft excel (500.00) Enumerators who will carry out the survey (20,000) and the cost to travel to selected target stations (10,000).
Ethical Considerations.
Various ethical considerations will be considered before commencing on the research.
Respondents will not be forced or coerced to participate in the research study. The process will be on voluntary basis. The respondents have a right to privacy and the researchers will uphold this privacy in the course of carrying out the study. The outcome of the results will be used only to the benefit of Brook house milk processing company. All individual responses from the respondents will be held with strict confidence. All information collected will be destroyed after the objective of the research has been realized and utilized fully.
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