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.
A 600 pound beginning weight has a value of gain of $1.37/lb. for 300 pounds of gain up to 900 pounds. These values suggest that stocker producers have considerable flexibility about what weight to buy and how much weight to put on stocker cattle at this time.he value of gain for stocker production is usually closely related to the feedlot cost of gain and any imbalance between them is generally corrected quickly. Such an imbalance exists today with current feedlot cost of gain in the range of $0.80-0.85/lb, down from roughly $1.00/lb early in the year.