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Planning Strategies For Maple-Leaf Corporation

This document provides planning strategies for Maple-Leaf Corporation's production facilities. It analyzes two alternatives: 1) building a new plant near Guadalajara or 2) increasing existing plant capacities. For a 5-year plan, alternative 1 costs $135,738 with a 77% utilization rate while alternative 2 costs $155,725 with a 79% utilization rate. For a 10-year plan, alternative 1 costs $186,500 with a 93% utilization rate while alternative 2 costs $228,325 with a 100% utilization rate. Based on the analysis, the document recommends alternative 1 of building a new plant near Guadalajara as it depicts lower costs.

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Priyanshu Verma
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65 views11 pages

Planning Strategies For Maple-Leaf Corporation

This document provides planning strategies for Maple-Leaf Corporation's production facilities. It analyzes two alternatives: 1) building a new plant near Guadalajara or 2) increasing existing plant capacities. For a 5-year plan, alternative 1 costs $135,738 with a 77% utilization rate while alternative 2 costs $155,725 with a 79% utilization rate. For a 10-year plan, alternative 1 costs $186,500 with a 93% utilization rate while alternative 2 costs $228,325 with a 100% utilization rate. Based on the analysis, the document recommends alternative 1 of building a new plant near Guadalajara as it depicts lower costs.

Uploaded by

Priyanshu Verma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Planning Strategies for

Maple-Leaf Corporation
Prepared By: Section C-Group 8
Aakash Sahrawat: PGP/19/121
Arpit Saraf: PGP/19/130
Prabal Jeet Khanna: PGP/19/156
Varun Das : PGP/19/178
Vijay Kumar: FPM/09/05

Current Production: Maple Leaf

Production Facility
Toronto
K. C.
Los Angeles
Seattle
Chicago
Atlanta
Gualadajara
Total

Toronto

K. C.

Los Angeles

Seattle

Guadalajara

5 years
Demand

10 years
Demand

0.75

2.5

4.5

4.75

5.25

1000

1000

2.5

2.5

2.75

3.25

750

1000

4.5

2.5

0.5

2.25

1.75

2500

3000

4.75

2.75

2.25

0.75

2.5

1500

2000

1.5

1.5

3.75

2.5

3.75

1500

2000

2.25

3.5

3.5

750

1000

5.25

3.25

1.75

0.5

0.5

2000

3000

10000

13000

Two Alternatives
The two Alternatives with Maple leaves were :
Set up a new plant near Guadalajara distribution center
since it has a well defined labor force and major
connectivity (Alternate 1)
Increase Existing plant capacity as doing so would
generate early results (Alternate 2)

Alternate 1
Building a new plant would involve the following:

Initial Capital - $3,000,000


Capacity of new plant 4,000 units per day
Production Cost - $10 per Carton
Initial Capacity of All Units 10,000 cartons per day
Additional Capacity 4,000 cartons per day
Final Capacity 13,000 cartons per day
Capacity Cushion 1000 cartons (10,000 + 4,000
13,000)

Alternate 1 : Cost Structure 5


year
Toronto

Toront
o
0.75

K. C.

2.5

2.5

2.75

3.25

750

Los Angeles

4.5

2.5

0.5

2.25

1.75

2500

Seattle

4.75

2.75

2.25

0.75

2.5

1500

Chicago

1.5

1.5

3.75

2.5

3.75

1500

Atlanta

2.25

3.5

3.5

750

Transportation Cost

Transportation Cost

Solver Solution
Transportation
Cost
Production Cost

Total Cost

13087.5
122650

135737.5

K. C.
2.5

Gualadajara
Quantity

5.25
3.25
Toronto

Toronto
K. C.
Capacity
Los Angeles
Seattle
Total Demand
Chicago
Atlanta
Gualadajara

1000
0
2250
1350
0
0
13000
1250
0
0

Capacity

2250

Los
Guadalajar
Seattle
Angeles
a
4.5
4.75
5.25

1.75
K. C.

0.5
Los
Angeles
0
0
0
650
3150
2250
0
2500
0
0
0
0
0
0
0
0

3150

5 years
Demand
1000

0.5
2000
Guadalajar
Seattle
a
0
0
0
100
4000
0
0
600
900
0
250
0
750
0
2000

600

4000

Total
Capacity
10000

5 years
Demand
1000
750
2500
1500
1500
750
2000

10000

Alternate 1 : Cost Structure 10


year
Toronto

Toront
o
0.75

K. C.

2.5

2.5

2.75

3.25

1000

Los Angeles

4.5

2.5

0.5

2.25

1.75

3000

Seattle

4.75

2.75

2.25

0.75

2.5

2000

Chicago

1.5

1.5

3.75

2.5

3.75

2000

Atlanta

2.25

3.5

3.5

1000

Transportation Cost

Transportation Cost

Solver Solution
Transportation
Cost
Production Cost

172500

Total Cost

186500

14000

K. C.
2.5

Gualadajara
Quantity

5.25
3.25
Toronto

Toronto
K. C.
Capacity
Los Angeles
Seattle
Total Demand
Chicago
Atlanta
Gualadajara

1000
0
2250
1350
0
0
14000
1500
0
0

Capacity

2500

Los
Guadalajar
Seattle
Angeles
a
4.5
4.75
5.25

1.75
K. C.

0.5
Los
Angeles
0
0
500
500
3150
2250
0
3000
0
0
0
0
0
0
0
0

500

3500

5 years
Demand
1000

0.5
3000
Guadalajar
Seattle
a
0
0
0
0
4000
0
0
2000
0
500
0
0
1000
0
3000

2500

4000

Total
Capacity
13000

5 years
Demand
1000
1000
3000
2000
2000
1000
3000

13000

Alternate 2
System Capacity : 90%
Initial capacity 10,000 cartons per day
Max Additional capacity 4,000 cartons per day
Final capacity 0.9*(10000+4000) = 12,600 cartons per
day

Alternate 2 : Cost Structure 5


year
Toronto

Toront
o
0.75

K. C.

2.5

2.5

2.75

3.25

750

Los Angeles

4.5

2.5

0.5

2.25

1.75

2500

Seattle

4.75

2.75

2.25

0.75

2.5

1500

Chicago

1.5

1.5

3.75

2.5

3.75

1500

Atlanta

2.25

3.5

3.5

750

Transportation Cost

Transportation Cost

Solver Solution
Transportation
Cost
Production Cost

144350

Total Cost

155725

11375

K. C.
2.5

Gualadajara
Quantity

5.25
3.25
Toronto

Toronto
K. C.
Capacity
Los Angeles
Seattle
Total Demand
Chicago
Atlanta
Gualadajara

1000
0
3150
2250
0
0
12600
1500
650
0

Capacity

3150

Los
Guadalajar
Seattle
Angeles
a
4.5
4.75
5.25

1.75
K. C.

0.5
Los
Angeles
0
0
0
750
4050
3150
0
2500
0
0
0
0
0
100
0
700

4050

5 years
Demand
1000

0.5
2000
Guadalajar
Seattle
a
0
0
0
0
0
0
0
1500
0
0
0
0
0
1300
0

2800

Total
Capacity
10000

5 years
Demand
1000
750
2500
1500
1500
750
2000

10000

Alternate 2 : Cost Structure 10


years
Toronto

Toront
o
0.75

K. C.

2.5

2.5

2.75

3.25

1000

Los Angeles

4.5

2.5

0.5

2.25

1.75

3000

Seattle

4.75

2.75

2.25

0.75

2.5

2000

Chicago

1.5

1.5

3.75

2.5

3.75

2000

Atlanta

2.25

3.5

3.5

1000

Transportation Cost

Transportation Cost

Solver Solution
Transportation
Cost
Production Cost

193050

Total Cost

228325

35275

Gualadajara
Quantity
Toronto
K. C.
Capacity
Los Angeles
Seattle
Total Demand
Chicago
Atlanta
Gualadajara

Capacity

K. C.
2.5

5.25
3.25
Toronto

Los
Guadalajar
Seattle
Angeles
a
4.5
4.75
5.25

0.5
Los
Angeles
0
0
0
0
0
0
3150
2250
4050
3150
0
0
1850
0
0
2000
12600
0
1800
200
550
450
0
2600
0
0

3150

1.75
K. C.

2250

4050

5 years
Demand
1000

0.5
3000
Guadalajar
Seattle
a
1000
0
1000
0
0
1150
0
0
0
0
0
0
0
0
0

3150

Total
Capacity
13000

5 years
Demand
1000
1000
3000
2000
2000
1000
2600

12600

Result: Utilization and Total Cost


Structure
5 yr expansion

5 yr new plant

10 yr
expansion

10 yr new plant

Supply

12,600

13,000

12,600

14,000

Demand

10,000

10,000

13,000

13,000

155,725

135,738

228,325

186,500

79%

77%

100%

93%

Total Cost (in


$)
Utilization (%)

As per the cost structure we would recommend to build a new plant


(Alternate 1) as it depicts a lower cost incurred as compared to Alternate 2

Thank You

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