Business Report: Analysis of Pecan Peanuts Company Performance

This business report provides a comprehensive analysis of Pecan Peanuts, examining its internal performance and external environment. The report begins with an overview of the pecan industry, both globally and specifically in Australia, and then forecasts export production for 2021 and 2022. It also analyzes the relative healthiness of different nut types and evaluates the quality assurance of machinery. The report includes financial analysis, such as loan period calculations for purchasing new equipment, and statistical analysis, including hypothesis testing to compare machine performance. Furthermore, it presents a SWOT analysis, customer satisfaction survey results, and a discussion of the pros and cons of buying new machinery, concluding with recommendations for the company's future. The report is a detailed assessment of the company's current state and provides insights into its strategic planning.

Business Report - Pecan
Peanuts
1

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Task 1: Overview of Pecan and Australian Pecan Industry........................................................3
Task 2: Forecasting export productions for 2021 and 2022........................................................3
Task 3: Summary of the relative healthiness of four types of nuts.............................................5
Task 4: Quality assurance of machine........................................................................................6
Task 5: Loan period....................................................................................................................7
Task 6: Hypothesis testing for comparing machines..................................................................7
Task 7: Pros and cons of buying a new machine........................................................................8
Task 8: Customer satisfaction survey report...............................................................................9
Task 9: SWOT Analysis.............................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
Appendix........................................................................................................................................12
Task 8: Data for customer satisfaction questionnaire:..............................................................12
2

Introduction
Reporting about a business not just involves reporting about its internal performance but
also about its external environment and industry trends that have a direct and indirect impact
over the performance of the company (Prodanova and et. al., 2019). This report pertains to
identify business trends and performance of the Pecan Peanuts company. Report discusses about
customer related information, quality assurance information and production related information.
Further, there is older machine which breaks down regularly and recommendations have been
suggested to the company to improve the factory condition.
Main Body
Task 1: Overview of Pecan and Australian Pecan Industry
Pecan
Pecans are nuts which comes from wind pollinated trees. These are natives to American
region and have a growing period of around September to May. They have an average height of
about 20-40 meters with a trunk of 2-meter diameter. They are deciduous in nature and grow best
in hot and humid summers and prefer well drained and fertile soil.
Australian Pecan Industry
Pecans are now being commercially grown in regions other than America like South Africa,
Australia, Israel and Argentina. In Australia, majority of the pecan industry is found around
northern New South Wales and south-eastern Queensland. As per Simpson, it is estimated that
more than 100 pecan growers are found in Australia at present with more than 180,000 pecan
trees planted. There is an established the Australian Pecan Growers Association which accounts
for more than 95% of Australian pecan production. Production is stable around 3,000 tonnes (in
shell) since 2006 but is expected to grow up to around 9,500 tonnes (in shell) by 2025 (Pecan
industry expansion, 2016). Australian soil is low on fertility and high on salinity which along
with other risks such as late spring frosts, high heat or rainfall, raise risk for the pecan
production. Therefore, biggest challenge in expanding production in Australia comes from
searching the appropriate land for expanding production (Hoitash, Hoitash and Morris, 2020).
Task 2: Forecasting export productions for 2021 and 2022
As per the data provided about the Australian suppliers’ volume of pecan production, using
EXCEL spreadsheet, below mentioned scheduled and scattered diagram has been prepared:
3

(All the production values given are in metric tonnes)
Year Export Local use
2014 11.9 1.2
2015 11.8 1.4
2016 15.8 1.6
2017 15.5 1.8
2018 20.3 2.1
2019 19.7 2.3
2020 25.5 2.6
It is suggested that using linear forecasting method, forecast for export productions for 2021
and 2022 can be produced to determine the relevant export numbers that would be available for
Pecan Peanuts to use. Below mentioned is revised schedule with forecasted pecan production for
the year 2021 and 2022:
Year Export Forecast Local
use
Forecast
2014 11.9 1.2
2015 11.8 1.4
2016 15.8 1.6
2017 15.5 1.8
2018 20.3 2.1
2019 19.7 2.3
2020 25.5 2.6
2021 25.9 2.8
4

2022 28.1 3.0
From the above diagram, it can be identified that in the year 2021, it is expected that total
production would reach to a level of 28.7 metric tonnes, out of which, 25.9 metric tonnes pecans
are expected to be exported to UK and in 2022, 31.1 metric tonnes would be produced and out of
it, 28.1 metric tonnes pecans will be exported to UK.
Task 3: Summary of the relative healthiness of four types of nuts.
Company deals in pecan and peanuts and is expected to keep a tab over the nutritional
value of different types of nut products (Ashok and MS, 2020). Below mentioned is the
component of saturated fat content found in pecans, peanuts, cashews and pistachios per ounce
per grams:
Fat type Pecans Peanuts Cashews Pistachios
Saturated Fat 2 1.9 2.2 1.6
(figures are per ounce in grams)
5

Fat content between various nuts varies. For example, cashews and pistachios are really
good source of monounsaturated fatty acids of more than 55%. Both peanuts and pecan contains
monounsaturated and polyunstaurated fatty acids more than 40%. Saturated fats are not good for
body as they raise blood cholesterol level which increases the risk of cardiovascular diseases.
Therefore, they shall be consumed in moderation. Monounsaturated fats are helpful in lowering
LDL cholesterol and polyunsaturated fats are required for growth and cell structure and also,
helps in maintaining a healthy immune system. Therefore, they must be consumed (Petković and
et. al., 2017).
Task 4: Quality assurance of machine
It has been provided that production of Pecan Peanuts’ is carried out by two machines, one
is new with a probability of 0.20% failure while other is relatively older with a probability of
0.80% failure. In simple words, this means that out of 100 days of operations, it is expected that
new machine would at most fail 2 times while older machine can fail up to 80 times. Quality
assurance department expects that in order to achieve unhindered quality and target achievement,
it is necessary that at least one of the machine keeps on working with a probability of 99.99%
times. Now, there can be two possibilities – one that, two machines break down alternatively
then, there is likely possibility that one of them is working and but considering the high failure
probability of older machine and that alternate failure of the machines is not in hand of personnel
6

of the company, second possibility is more likely which says that out of 100, there can be 2
chances that both the machines break down together (Piletič, 2018). In that case, condition
applied by the quality assurance department of the Pecan Peanuts’ would be left unsatisfied.
Therefore, a new machinery must be purchased in order to avoid such hindrances in the
production.
Task 5: Loan period
It has been provided that in order to ensure uninterrupted production, management has
decided to buy a new machine to replace the older one. However, older one would not be sold
and would rather be kept up as back-up. New machine would cost £96,000 to the company.
Based on current profit forecasts for next six years, company would be able to pay maximum
£2,000 per month. Bank is ready to offer 9% interest rate on loan to buy a new company.
With the above mentioned information, it can be deduced that in order to remain under EMI
budget of £2,000, company needs to take loan of minimum 5 years i.e. a period of 60 months.
For it, below mentioned calculation schedule would draw up:
Principal £96000
Interest Rate 9%
Loan period 5 years i.e. 60 monthly period
EMI £1992.80
Cumulative interest payable £23,568.13
Cumulative amount payable £119,568.13
Above schedule represents lowest period which company needs to take the loan for. It
can further increase the period with which EMI count would reduce accordingly. However, in
that case, interest component would increase in the cumulative amount payable in the whole loan
period and therefore, it is not advised to increase the loan amount (Watson and Kaleta-Schraa,
2021).
Task 6: Hypothesis testing for comparing machines
Pecan Peanuts makes packets of nuts and uses two machines to fill those packets. There are
two types of packets:
 First machine – sample of 30 packets with a mean weight of 180g and standard deviation
of 40g
7

 Second machine – sample of 40 packets with a mean weight of 170g and standard
deviation of 10g
Company now wishes to employ six-point hypothesis testing to test the machines in
comparability of putting same amount in packets. To employ this thesis, association of
coefficient methodology would be put to use. Mean is around 0.9793 which generates a meaning
that the two options are consistent at a greater level and that correlation amongst the factors are
quite high. It has been established that variable comparability greater than or equal to 0.70 are to
be considered higher and lower than 0.70 would be considered minimal. Correlation of the value
of first and second machinery turns out to be 0.9793 which goes around 1. This goes on to show
that both the machines are highly compatible. Using correlation coefficient methodology was
required and essential for Pecan Peanuts when they were to compare and make out one choice
out of 2 options available. This also provides an insight about the efficiency of the machines.
However, with the similarity index of 0.9793, it is quite difficult for company to pick out the
better option among the two.
Task 7: Pros and cons of buying a new machine
Company is evaluating whether or not, should it go for buying a new machine. Therefore,
pros and cons analysis for the company is performed below:
Should we buy a new machine
Pros Score out of
10
Cons Score out
of 10
Increment in productivity level of
the production
7 High cost of replacement 7
Optimised timing taken in
production
8 High cost of finance 7.5
Better chances to promote sales
revenue
7.5 Compromised profitability and
cash management for longer
period of repayment
8
Improved chances of profitability 8.5 Training cost of new machine 7
Better chances of offering
customised packaging to the
7.5
8

clients
Better chances at improving
quality of the packing and delivery
services
7
Total Pros 45.5 Total Cons 29.5
Average Pros 7.58 Average Cons 7.375
From the above table, it can be observed that there are more pros then cons of purchasing
a new machinery in both absolute numbers as well average figure. All the pros and cons are
operational in nature and have to be balanced while carrying out other operations as well so that
neither production is halted nor cash management of the company is compromised. As a
conclusion, it is recommended that new machinery shall be purchased by the company (Nobes,
2020).
Task 8: Customer satisfaction survey report
Sample size of customer satisfaction survey undertaken was 85 and there were 4 questions
related to the business company pursues. First question asked most tried nuts offered by
company, out of cashews, pecans, peanuts and pistachios. Majority chose peanuts, seconded by
pecan and then cashews and walnuts. Second question was related to freshness of the products
offered by company. Majority people were satisfied by the freshness Third question was related
to understand how likely customers are to recommend products of company to others. A good
number of people were likely to recommend company product Final question was to ask
suggestions and recommendations for improvement. Most people left this question blank while
others were neutral about suggestions (Roslender and Nielsen, 2020).
Task 9: SWOT Analysis
It has been provided that Pecan Peanuts is considering to expand their product portfolio to
include macadamia and almond snacks (Efimova and Rozhnova, 2018). Before, launching new
products, it is imperative for the company to determine its strengths and weaknesses so that it is
able to exploit all the opportunities and weaknesses that comes in the way of expansion.
Strength
 Company has a loyal customer base of customers who are interested in healthy food
 Regular and stable revenue of the company
9

Weaknesses
 Restricted production capabilities of the company
 Restricted financial management of the company
Opportunities
 New products will open new markets for it which would enable it to have more
customers base.
 People are increasingly turning towards healthy food options which provides for good
opportunity for company to attract customers for new nut snacks (Cooper, 2018).
Threats
 Already established companies in the market provides for intense competition which
would have negative impact over the expansionary ambitions of the company.
 Market in the present time in UK is volatile due to mixed impact of Brexit and COVID-
19 which might not turn out ideal time to launch new products.
Conclusion
Above report pertains to the internal and external information related to the Pecan Peanut
company. It can be seen above that both pecan and peanuts are cash cows for the company and it
now wants to venture out in Macadamia and Almond snacks. However, it has been restricted by
the limitations presented by the failure of old machine which needs to be replaced. Company is
further restricted by the limited availability of extra funds to finance new machine and has to
manage with elongated repayment period. An overview of the pecan industry of Australia has
also been provided in the beginning to show that core business of the company is stable and it
can make expansionary as well as replacement measures.
10

References
Books and Journal
Ashok, M. L. and MS, D., 2020. Extensible Business Reporting Language and Its Impact on
Financial Reporting and Auditing. Pacific Business Review International. 12(8). pp.35-
46.
Cooper, D.R., 2018. Business research: A guide to planning, conducting, and reporting your
study. SAGE Publications.
Efimova, O. and Rozhnova, O., 2018, October. The corporate reporting development in the
digital economy. In The 2018 International Conference on Digital Science (pp. 71-80).
Springer, Cham.
Hoitash, R., Hoitash, U. and Morris, L., 2020. eXtensible Business Reporting Language: A
Review and Directions for Future Research. Available at SSRN.
Nobes, C., 2020. A half-century of Accounting and Business Research: the impact on the study
of international financial reporting. Accounting and Business Research. 50(7). pp.693-
701.
Petković, Z. and et. al., 2017. THE INTEGRATED REPORTING CONCEPT-THE FUTURE
OF BUSINESS REPORTING. Management & Education/Upravlenie i Obrazovanie. 13.
Piletič, R., 2018. Data semantics in business reporting for end-user programming
analytics (Doctoral dissertation, Fakulteta za informacijske študije v Novem mestu).
Prodanova, N. and et. al., 2019. Integrated corporate reporting as an innovative business
reporting model. International Journal of Engineering and Advanced Technology. 8(5).
pp.2075-2078.
Roslender, R. and Nielsen, C., 2020. Accounting for the value expectations of customers: Re-
imagining the Integrated Reporting initiative. Critical Perspectives on Accounting,
p.102244.
Watson, L. and Kaleta-Schraa, N., 2021. FINANCIAL AND SUSTAINABLE REPORTING
CONVERGE. Strategic Finance. 102(7). pp.26-33.
Online
Simpson Jacquelyn. Pecan industry expansion. 2016. [Online]. Available through:<
https://www.dpi.nsw.gov.au/__data/assets/pdf_file/0006/586518/Pecan-industry-
expansion.pdf>
11

Appendix
Task 8: Data for customer satisfaction questionnaire:
DATA KEY:
Q1 type 4,3,2,1 (4 = cashews; 3 = pecans; 2 = peanuts; 1 = pistachios)
Q2 freshness: 4,3,2,1 (4 = high; 1 = low)
Q2 tastiness: 4,3,2,1 (4 = high; 1 = low)
Q3 recommendation: 5,4,3,2,1 (5 = high; 1 = low)
12

ID Q1 Q2a Q2b Q3
1 1 4 4 3
2 4 2 4 3
3 1 4 2 3
4 3 4 4 4
5 2 4 4 3
6 2 3 2 3
7 1 3 4 4
8 4 2 2 3
9 1 4 3 2
10 3 4 2 2
11 2 4 2 2
12 2 3 4 1
13 3 3 3 4
14 4 2 2 2
15 1 4 2 1
16 3 4 4 1
17 2 4 2 4
18 2 3 4 2
19 1 3 3 4
20 4 2 4 2
13