money image by cherie from Fotolia.com. Economic models help managers and economists analyze the economic decision-making process. Each model relies on a number of assumptions, or basic factors that are present in all decision situations.he fundamental basis of economic decision making is individuals' or organizations' desire to maximize benefits while minimizing costs. This balancing act is referred to as maximizing value, and it is a skill that takes practice to master.
Most cattle producers are familiar with the term feed conversion.. Advertisement. Most cattle producers are familiar with the term feed conversion.. It is simply the amount of feed an animal consumes as compared to the amount of body weight gained, expressed as a ratio. Feed conversion ratios in the neighborhood of 6:1 (6 lbs of feed per pound of gain) are common in modern beef cattle feedlots. Stocker cattle producers are also interested in feed conversion, but the calculation is a little different.
Between 60 and 80% of the cost of production are feedstuffs and typically around two to three kilogrammes of feed results in a kilo of animal body weight gain. The closer this is to 2 kg the better â or lower â the FCR is. If the FCR is 2.0 then it takes 2 kg of feed to take a pig from 30 to 31 kg liveweight for example, as opposed to a 3.0 ratio where it takes 3 kg of feed to achieve the same 1 kg of body weight gain and the associated higher feed bill.