Essential facts of the case:
Pasy Company was a diversified company that was well-known for manufacturing beverage cans. They use the sales budget and the manufacturing budget as tools to direct their division toward the company’s objective. After the sales budget was developed at the division level, it then was sent down to the plant manager to be broken down into price, volume and end use. The plant manager will develop their own plans with help from the engineering department. Quality was number one concern of plant managers. Quality was included not only the quality of product, but also included delivery and customer service. 1) Describe the industry value chain from aluminum supplier to container manufacturer to beverage bottling company Aluminum Can Division was one of the largest manufacturers of beverages cans in the US. They had plants spread out across the states. Plants played the role of both the manufacturing and the distributor. They usually produced different size of cans at one location and then served their customers within their geographic region. Customers included large and small breweries and soft drink bottlers. Soft drink bottlers were usually the franchisees of Coca-cola and Pepsi. There were five container manufacturers that accounted for 88% of the market. Those manufacturers normally had plants that located around 200~300 miles of customers and the minimum size for a plant was about five lines with $20 million investment in equipment for each line. The cost for producing a can included raw materials, labor, marketing and general administration, transportation, depreciation, research and development. Raw material cost was about 64% of the total cost. Labor was about 15%, marketing and general administration was around 9%, transportation was 8%, depreciation was 2% and research and development was around 2% of the total cost. For soft drink companies, the...
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