Trade-off between cost of traceability within a small and large commercial meat plant and economic benefits of reducing the number of recalls and size of recalls

Is the benefit of reducing the size or probability of a recall worth the cost of the system? Recalls have the potential to incur large cost associated with loss of product, negative publicity, and legal judgments. A model including the cost of traceability, probability that a recall occurs, costs associated with a recall, and severity of recall events is simulated using a random draw of probability and average size from a given distribution for both a 400 head per day and a 5,000 head per day beef plant. For a small plant, it was estimated that the reduction in size of recall by 77 percent is required to breakeven while a greater than 99 percent reduction in probability is required. For a large plant, the breakeven point plant is found at a 7 percent reduction in size of a recall and 15 percent reduction in the probability of a recall.