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Robots Don't Get Sick or Get Paid Overtime, but Are They a Profitable Option for Milking Cows?

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  • Jeffrey Hyde
  • James W. Dunn
  • Annette Steward
  • Ellen R. Hollabaugh

Abstract

Mason Dixon Farms, a dairy known worldwide for its adoption and innovation of new technologies, is considering the purchase of forty robotic milking units to service its 2,000 cow herd. The purchase requires a $6 million investment plus any additional buildings and equipment necessary. Their alternative is a $1 million carousel milking parlor. This case asks students to assess Mason Dixon's decision by performing a capital budgeting analysis. One of Mason Dixon Farms' explicit objectives is to reduce its use of milking laborers. The results allow students to draw conclusions about the value of reducing labor management under this scenario. Copyright 2007, Oxford University Press.

Suggested Citation

  • Jeffrey Hyde & James W. Dunn & Annette Steward & Ellen R. Hollabaugh, 2007. "Robots Don't Get Sick or Get Paid Overtime, but Are They a Profitable Option for Milking Cows?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 366-380.
    • Handle: RePEc:oup:revage:v:29:y:2007:i:2:p:366-380
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2007.00348.x
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    Cited by:

    1. Sauer, Johannes & Zilberman, David, 2009. "Innovation behaviour at micro level - selection and identification," CUDARE Working Papers 120636, University of California, Berkeley, Department of Agricultural and Resource Economics.
    2. Sauer, J. & Zilbermann, D., 2010. "Innovation Behaviour At Farm Level – Selection And Identification," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 45, March.

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