Pecan Peanuts: Overview, Forecast, Health Issues, Quality Assurance, Cost, Hypothesis Testing, Pros and Cons, Customer Satisfaction

This assignment covers various topics such as overview of entity and Australian Pecan Industry, use of linear forecast model, health issues in the nuts market, quality assurance conditions in machine working etc.

Pecan Peanuts
Summative Assessment
2020

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Overview of Australian Pecan Industry.......................................................................................1
TASK 2............................................................................................................................................2
Linear forecast of export production for 2021 and 2022.............................................................2
TASK 3............................................................................................................................................3
Health issues in Pecan, Peanuts, Cashews and Pistachio............................................................3
TASK 4............................................................................................................................................4
Quality assurance conditions in machine working......................................................................4
TASK 5............................................................................................................................................4
Cost of new machine...................................................................................................................4
TASK 6............................................................................................................................................5
Hypothesis testing for possible difference in two machines.......................................................5
TASK 7............................................................................................................................................6
Pros and cons analysis.................................................................................................................6
TASK 8............................................................................................................................................7
Customer satisfaction...................................................................................................................7
TASK 9............................................................................................................................................7
Initial SWOT analysis for possible expansion.............................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
APPENDIX....................................................................................................................................10

INTRODUCTION
Pecan Peanuts is a nut producer which is supplying its products to different countries. It
imports from Australia so that it can meet the expectations of all its clients. Present report is
based upon the entity and its different types of strategies (Bolling, 2017). This assignment covers
various topics such as overview of entity and Australian Pecan Industry, use of linear forecast
model, health issues in the nuts market, quality assurance conditions in machine working etc.
Apart from this, analysis of cost of new machine, hypothesis testing, customer satisfaction, pros
and cons analysis along with SWOT analysis are also covered in this assignment.
TASK 1
Overview of Australian Pecan Industry
Overview of Pecan Peanuts: It is one of the entities which are operating business in
different countries. The packed nuts products that are produced by it are produced in its main
factory which is established in United Kingdom. It also sells the snack nut products which are
cashew and pistachios but the pecans and peanuts are its best-selling products. All the shell-on
nuts are imported by it from Australia. It started its production in year 2017 and the net profits
for all the years are increasing continuously for it after the establishment of business. Currently
the focus on individuals towards the healthy snacks is increasing continuously. One of the old
machines of the entity is seems to be breaking down recently so the organisation is planning to
buy a new one so that it can provide boom to its business (Brar and Danyluk, 2019).
Overview of Australian Pecan Industry: The Australian Pecan Industry is growing
massively and the export of around 104.5 million dollars was recorded in year 2018 / 19. There
are various types of nuts that are exported by the industry in various countries. These are
almonds, walnuts, hazelnuts, chest nuts. Macadamia, pecans and pistachio. Currently the whole
sector is exporting in almost 55 countries (Overview of Australian Pecan Industry, 2019).
Currently there are various free trade agreements that are in negation and after it will be
completed the export will be raised by a high percentage in upcoming years. According to HTW
the area under the pecan orchards in Australia are currently producing around 3000 tonnes shell
and the kernel for it is around 1650 tonnes.
1

TASK 2
Linear forecast of export production for 2021 and 2022
Data of Australian Supplier volume:
Year Export
2014 11.9
2015 11.8
2016 15.8
2017 15.5
2018 20.3
2019 19.7
2020 25.5
Scatter diagram:
On the basis of above diagram, the volume of Australian Suppliers for year 2021 and
2022 are estimated. For this purpose, linear forecasting model is used. The formula which is
used in excel is FORECAST.LINEAR(Year of estimation, data of previous year, all the
years)
The results that are generated after using the formula in excel spreadsheet are as follows:
Year Export
2014 11.9
2015 11.8
2

2016 15.8
2017 15.5
2018 20.3
2019 19.7
2020 25.5
2021 25.9
2022 28.1
According to the linear forecast the local use for 2021 and 2022 will be 2.8 and 3.0
respectively. On the other hand, the export will be around 25.9 and 28.1 for both the years ( Brar,
Strawn and Danyluk, 2016).
TASK 3
Health issues in Pecan, Peanuts, Cashews and Pistachio
The table showing the saturated fat content in different nuts is as follows:
Nuts Saturated fat (Per ounce)
Pecans 2 Gm
Peanuts 1.9 Gm
Cashews 2.2 Gm
Pistachios 1.6 Gm
In order to reflect the healthiness of the nuts following chart is generated:
3

On the basis of above chart, it has been analysed that the saturated fat in cashew is very
high and in Pistachios it is very low. The chart shows that the healthiness of cashew is low as
compare to rest of the nuts. The fats in pecans, peanuts, cashews and pistachios are 2, 1.9, 2.2
and 1.6 respectively.
If cashews will be consumed more than a limit then it may result in the problem of
obesity in the humans. On the other hand, the individuals who are highly focused with tehri
health consume Pistachios as it helps them to stay healthy and get enough protein to stay healthy
and live the healthy lifestyle. The chart shows all the values in grams per ounce of the
consumption of all the nuts (Cheng, Dharmasena and Capps Jr, 2017).
TASK 4
Quality assurance conditions in machine working
The probability of failure of new machine = 0.20%
The probability of failure of new machine = 0.80%
According to the recent monitoring of all the machines it has been analysed that the new
and old machines have probability of failure of 0.20% and 0.80% respectively. On the other
hand, the quality assurance departments say that the working of one machine is 99.99%.
On the basis of it following calculations are drawn to satisfy the condition:
Formula: Probability of working – probability of failure
Old machine New machine:
= 0.9999% - 0.20% = 0.9999% - 0.80%
4

= 0.7999% = 0.1999%
Comparison: On the basis of above calculation, the machine which will be working in
future with high quality is new machine as its probability is 0.79% and the probability for the old
machine is around 0.19%. With the help of calculations, it has been analysed that the machine
which will be working with quality according to quality assurance department is the new one
because of its high possibility of working and lower possibility of failure (Cunha, Sa and
Fernandes, 2018).
TASK 5
Cost of new machine
Current profit forecast for upcoming six years = 2000 per month
Interest on the loan = 9%
Loan amount = 96000
Yearly estimated income for Pecan Peanuts = 2000 * 12
= 24000
Profits for all the years could be determined with the help of following table:
Year Income Income at the end of the
year
Total profits
1 24000 24000 24000
2 24000 24000 + 24000 48000
3 24000 48000 + 24000 72000
4 24000 72000 + 24000 96000
5 24000 96000 + 24000 120000
6 24000 120000 + 24000 144000
Loan amount 96000
Interest rate 9%
Period terms in months 72
Compounding period per
month 12
PMT 1,730.45
5

If the loan will be taken for 72 months then the amount of loan could be paid
successfully. At the end of year 6 the incomes will be 144000 so it has been recommended to the
organisation to take the loan for 72 months. This time span will be enough for the enterprise to
remain in the budget and take the loan to but the new machine (Dean, 2018). The monthly
instalment will be around 1730.45.
TASK 6
Hypothesis testing for possible difference in two machines
In order to replace the old machine two new alternatives are being selected by Pecan
Peanuts. Some of the specific information relate to them is as follows:
Machine A:
Sample packets = 30
Mean weight = 180gm
Standard deviation = 40gm
Machine B:
Sample packets = 40
Mean weight = 170gm
Standard deviation = 10gm
The hypothesis testing which will be used in the case of it is as follows:
Formula: F = (Standard deviation12 / standard deviation12) / (Standard deviation22 / standard
deviation22)
The formula gas an F distribution with degrees of freedom
V1 = n1 – 1 and V2 = n2 – 1
On the basis of investigation, it has been analysed that mean differences are required for
generating the results and both of them will be required to be compared. The variance between
them will be used for making the earlier model. The size of two different samples is utilised and
it is influences with the comparison of mean that is very simple.
A. When X~N (μ, standard deviation2) then x̅~N (μ, standard deviation2 / n)
b. When X1~N (μ1, standard deviation12) independent of X2~N (μ2, standard deviation22 /
n) Then X1- X2~N (μ1- μ2, standard deviation12+ standard deviation22)
When the above results will be combined:
6

x̅ 1- x̅ 2~N (μ1- μ2, standard deviation12 / N1+ standard deviation22 / N2)
So,
Z= (x̅ 1- x̅ 2) - (μ1- μ2) / √standard deviation12 / N1+ standard deviation22 / N2
The above equations are designed on the basis of different statistics of normal
distribution and these are used for the purpose of designing the results.
Test statistics could be defined with the help of following formula:
= (x̅ 1- x̅ 2) - (μ1- μ2) / √standard deviation12 / N1+ standard deviation22 / N2
When standard deviation12 = standard deviation22= standard deviation2 then
Z will be (x̅ 1- x̅ 2) - (μ1- μ2) / √standard deviation12 / N1+ standard deviation22 / N2
Now the sample variances which are standard deviation12 and standard deviation22 are
estimated as standard deviation2, therefore the information could be combined to form a pooled
estimation of variance which is as follows:
standard deviationp2 = (N1 – 1) standard deviation12 +(N2 – 1) standard deviation22 / N1 –N2-2
When the six-point procedure for hypothesis testing were analysed for checking that both
the machines could be used to put the same amount in packet of not then correlation of
coefficient technique is used. The correlation for it is around 0.9793. It shows that the machines
are highly comparable and both of them could be used for the purpose of putting same number of
nuts in different packets. If the correlation between the two variables is more than 0.70 the it
shows that the variables are having higher level of compatibility and if it is less than 0.70 then it
shows that the level of compatibility of the variables is very low. As the correlation between the
two alternatives with 30 and 40 packets is 0.9793 which is very close to 1 so it shows that the
comparability in both of them is very high (Jiang, Wang and Sun, 2017).
TASK 7
Pros and cons analysis
The new machine should be bought or not:
Pros Score Cons Score
Higher productivity 8 High cost of new machine 7
Increased quality of nuts 7 Training to staff to operate the
new machine
8
Reduction in time 8 Interest to bank 7
7

Enhanced revenues 6
Increased profits 6
Manufacturing of healthy
snacks preferred by customers
9
Total 44 Total 22
The above table reflects that the pros of buying a new machine are very high as compare
to the cons so it is recommended to Pecan Peanuts that it should buy the new machine as it will
result positively. If it will be bought the profits, revenues, quality etc. will be enhanced and the
time involved in production activities will be reduced.
TASK 8
Customer satisfaction
On the basis of questionnaire, it has been analysed that most of the users prefer pecan and
peanuts because of their taste and health benefits. The score for the freshness and tastiness for all
the nuts including pecans, cashews, pistachios and peanuts is very high. Most of the respondents
have provided the highest score to them which is 4. It also shows that the consumers of them will
preferably recommend others to eat the nuts as these are very good for health. Each type of nut
will be very likely recommended to other people to eat them.
TASK 9
Initial SWOT analysis for possible expansion
SWOT analysis: It is a strategic management model which can help entities to carry out
all the operations successfully. As Pecan Peanuts is willing to expand its business in different
product lines such as Macadamia and Almond Snacks so it decided to conduct SWOT analysis
(Sealey-Voyksner, Zweigenbaum and Voyksner, 2016). The detailed analysis for the
organisation is as follows:
Strengths Weaknesses
 Business expansion will result in
increased customers of the entity.
 New product lines will help to generate
more profits as compare to the previous
year.
 The cost of expanding in the new
product line is very high.
 If the new product line will be
introduced then it will be very
important for the entity to hire new
8

staff members and train them to work
within the entity.
Opportunities Threats
 New product line can help to target all
the individuals who prefer healthy
food.
 The expansion can product growth to
business.
 The existing seller of almond and
Macadamia are competitors for Pecan
Peanuts.
 Expanding in a new product may also
result in failure because of old taste of
customers.
CONCLUSION
From the above project report it has been concluded that Pecan Peanuts is an entity which
is selling different types of nuts in the world. These are pecans, cashews, pistachios and peanuts.
The Australian Pecan Industry is attaining growth since past few years because of the higher
demand of pecans in around the world. The old machine of Pecan Peanuts is working properly
and also not having any residual value so the enterprise decided to buy a new machine. It will
help to enhance productivity, profits, revenues etc. Apart from this, the time which was taken by
old machine to manufacture the packets of nuts will also be reduced with the help of it. In order
to capture larger market area, it has been planned by Pecan Peanuts to expand in new product
line. To determine the possibility of success and failure of it SWOT analysis is conducted.
9

REFERENCES
Books and Journals:
Bolling, B. W., 2017. Almond polyphenols: methods of analysis, contribution to food quality,
and health promotion. Comprehensive Reviews in Food Science and Food Safety. 16(3).
pp.346-368.
Brar, P. K. and Danyluk, M. D., 2019. Validation of Enterococcus faecium as a surrogate for
Salmonella under different processing conditions for peanuts and pecans. Food
microbiology. 80. pp.9-17.
Brar, P. K., Strawn, L. K. and Danyluk, M. D., 2016. Prevalence, level, and types of Salmonella
isolated from North American in-shell pecans over four harvest years. Journal of food
protection. 79(3). pp.352-360.
Cheng, G., Dharmasena, S. and Capps Jr, O., 2017. The Taste for Variety: Demand Analysis for
Nut Products in the United States (No. 1377-2016-109921).
Cunha, S. C., Sa, S. V. and Fernandes, J. O., 2018. Multiple mycotoxin analysis in nut products:
Occurrence and risk characterization. Food and Chemical Toxicology. 114. pp.260-269.
Dean, L. L., 2018. Targeted and Non‐Targeted Analyses of Secondary Metabolites in Nut and
Seed Processing. European Journal of Lipid Science and Technology. 120(11).
p.1700479.
Jiang, S., Wang, J. and Sun, Y., 2017. Qualitative and quantitative analysis of fatty acid profiles
of Chinese pecans (Carya cathayensis) during storage using an electronic nose
combined with chemometric methods. RSC advances. 7(73). pp.46461-46471.
Sealey-Voyksner, J., Zweigenbaum, J. and Voyksner, R., 2016. Discovery of highly conserved
unique peanut and tree nut peptides by LC–MS/MS for multi-allergen detection. Food
chemistry. 194. pp.201-211.
Online
Overview of Australian Pecan Industry. 2019. [Online]. Available through:
< https://www.propertyobserver.com.au/finding/location/rural/105030-australian-pecan-
industry-finally-reaping-rewards.html>
10

APPENDIX
Hypothesis testing calculations:
H0: μ1= μ2 (1 will be lower and 2 will be upper)
H1: μ1> μ2 (one tailed)
The critical region in this case will be =>2.326
Under H0 the test statistics will be
= (x̅ 1- x̅ 2) - / √standard deviation12 / N1+ standard deviation22 / N2
The calculations are as follows:
= x̅ 1 = 1485 / 15 = 99
= x̅ 2 = 805 / 10 = 80.5
Z = √99-80.5 / (252 /15 + 102 / 10)
= 2.57
11