Assignment – 1
Report on Sands Corporation
Submitted to Prof. Mukul Vasavada
DATE : 15/09/2009
August 14th 1961
To The Vice President (Manufacturing)
From Executive Assistant
Subject: Report on installation of new plant
I am submitting the detailed report on the installation of the new plant. Sands Corporation has two options of installing the new plant, either at Kimberly or at Hampton. Various factors such as capital cost, labour cost and overhead expenses have been taken in to consideration.
I hope the analysis i have done satisfies your concerns.
I will be glad to seek any further clarification regarding the analysis.
Sands Corporation established in 1941 manufactures wide range of parts for aircraft, automotive and agricultural equipment industries. It has two branch plants which is approximately 200 miles away from the main plant. Not required
In 1961 Sands Corporation won the competitive bidding to supply the military aircraft parts. Company executives decided to install a new plant to fulfil this contract in stipulated time. Company has two options to locate the new plant either at Kimberly Street or at Hampton
Taking in to consideration the various factors such as land, labour, electricity and other factors both the options were analysed. Incomplete?
TABLE OF CONTENTS
Sr.No. Content Page No.
1. Situation Analysis 5
2. Problem Statement 5
3. Criteria For Evaluation 6
4. Options 6
5. Evaluation of Options 6-7
6. Recommendation 8
7. Action Plan 8
8. Exhibits 8-9
Sands Corporation is a company which manufactures wide range of parts for the aircraft, automotive and agricultural equipment industries. It operated at three plants which were located in Midwestern section of United States.
There was a further increase in the production of military and space programs and it started receiving more orders .Sands corporation won the competitive bidding in 1961 to supply the military aircraft parts. To fulfil this order, Sands Corporation decided to install a new plant as the order could not be manufactured in existing plant as the specifications mentioned were of larger sizes. Company executives concluded that a new plant would require a space of 75,000 square feet and it was estimated that a new plant would cost approx $6, 00,000 with a requirement of 600 employees. For this, it has to choose between two options, a site at Kimberly Street or at Hampton. The construction of the new plant would approximately take 4-6 months under the condition that work should be started within the next two weeks if the foundations were to be laid before the first frost.
A penalty of $1000 would be charged/day in case of late delivery after a grace period of a week.
Cost To Be Incurred By The Company
It was estimated that to install a new plant at Kimberly street it would cost $33,07,410 and at Hampton it would cost $35,11,980.These cost include the cost of land, labour and...