Foulke Consumer Products Case Analysis Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Foulke Consumer Products Case Analysis Case Solution

Background

Foulke Consumer Products Company was a small manufacturer and the distributor of the Brand A of the durable consumer product. The company has 600 million in sales across its entire region and the current market share of Foulke Consumer Products Company is 25%. The company has expanded rapidly in 10 years time through significant acquisitions; however, this has put a strain on the manufacturing side of the company. Currently, the company is operating 40 plants across the country.

Therefore, at times Foulke Consumer Products Company also faced competition for the plants in the same region and redundancies existed among many of its plants as well. There are around 800 firms in the market and the competition has also become more intense. Nine brands in the market controlled 67% of the total market. The growth of the industry has declined and was currently too low. This growth was also not expected to pick up in the near future. The overall situation of the market was causing problems for all the firms.

Decision Problem

The decision problem in this case is the distribution problem, as the company has rapidly expanded and has 40 plants currently operating in the entire country. Some plants of the company lacked the capacity, while others had excess capacity. The profitability of all the plants was also not same and some of the plants of Foulke Consumer Products Company suffered from serious operating problems.

However, the management of the company has always addressed these operational issues on a plant-by-plant basis and the management made no efforts on a regional or national basis. Therefore, the decision problem faced by the management of Foulke Consumer Products Company was to optimize the capacity of all the plants and enhance the profitability of the company.

Decision Criteria

Currently, the company is facing issues with its distribution and capacity of the plants. Certain options are available to the management of the company for overcoming the profitability and operations issues at different plants. Management has the options to close the plants, expand the capacity of the plants, or open two new plants in two specific locations in Florida. A linear programming model for the location decision will have to be created in order to test multiple alternatives available to the management of Foulke Consumer Products Company.

All of these alternatives need to be feasible, which would be achieved by selecting different configurations for each of the plants. The decision would be made on the basis of the qualitative and quantitative factors since this would be in the best interests of the long term growth of the company. The optimal mix of the plant capacity will be generated through the Simple Linear Model in order to represent the distribution system for Foulke Consumer Products Company (Sierksma, 2005). Finally, a recommendation would be made on the basis of both the qualitative factors and quantitative results.

Current Distribution Model

Foulke Consumer Products Company is currently meeting the demand of the entire market and that is why the company has expanded and set up around 40 plants around the country. However, this has resulted in a strain on the production side and the profitability of all the plants. Some of the plants are performing better as compared to other plants. The case presents us with information about three biggest plants of the company, which are the Orlando, Atlanta, and Lexington plant.

If we talk about the Orlando plant then this plant was the largest in the region but it was also the least profitable among all the other plants. The delivery costs for this plant were high as most of the products were shipped to the South of the Miami area. The high paying service industries had also grown rapidly in this region, which had worsened the workforce of this plant due to recent urbanization in the area......................

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