Case Study Scotts Miracle-Gro

Tucker Hansson, the owner of Hansson Private Label, is struggling in whether to execute the $50 million investment proposed by his manufacturing team. Under this situation, the subject of this report is to evaluate the potential investment of expanding production capacity at Hansson Private Label (HBL) and make a recommendation to Tucker Hansson. In this report, I will specifically focus on analyses of the project’s free cash flows (FCFs), weighted average cost of capital (WACC) and net present value (NPV). With a sensitivity analysis, it can help us to observe how change in some key project variables

The threat of substitute products is low to Caterpillar. This is due to organisation’s use of the most efficient technology for the associated cost of operations. There is no other viable option for buyers to consider the task to be completed in a resourceful and more timely manner.

investing in plant upgrade options A and C and also consolidating the production of 500 models/styles of branded footwear in a single 12-million pair plant in the Asia-Pacific (to only incur the payment of $14 million in production run setup costs one time).

What are the strategic risks and benefits of outsourcing production of the Temecula plant to contract manufacturers in China?

Siam Cement’s offer to purchase an initial order of 200 units at $9,000 per unit, would lead to a net profit of $200,000. While this immediate cash influx may seem advantageous in the short term, it will not offset yearly operational expenses of $250,000 (See Exhibit 1). Additionally, accepting Siam Cement’s offer would position Rubbertech as an Original Equipment Manufacturer (OEM). This decision could impede potential growth that would far exceed the offer that is currently on the table. If Rubbertech does not accept Siam Cement’s offer, they can seize a part of

Steve was concerned about the potential loss of customers and suggested that Prairie Winds purchase a second pasta production machine for $40 million. The company had excess space in the existing facility that could be used for the new machinery. However, this space currently was leased to another company on a year-to-year basis and was generating annual rent of

In order to meet customer demands for higher product quality, to comply with federally-mandated environmental regulations, and to reduce production costs, HCC must spend $2,000,000 within the next three years to upgrade equipment. The upgrade is expected to result in production efficiencies that will lower material and labor costs by reducing defective products, process waste, in-process inventory, and production man-hours through simplified work processes. It has been over a decade since significant modifications were made to the production facilities. Those changes were mostly technical in nature and did not substantially alter work processes or reduce overall employment. The average productivity gain in the industry for the past five years has been 3% per year. Financing for the loan to purchase the equipment

In the case of Mendel Paper Company which produces four basic paper products lines at one of its plants: computer paper, napkins, place mats, and poster board. Although the plant superintendent, Marlene Herbert is pleases with increased sales he is also concerned about the costs. The superintendent is concerned with the high fixed cost of production, the increases in fixed overhead and even variable overhead. He feels that the production of place mat should be discontinued. His reason for the discontinuation is that the special printing is driving up the variable overhead to the point where the company may not find it profitable to continue with the line. After reviewing the future predictions of the

Answer: It seems like Bridgeton and its consultants assumed that the savings from outsourcing those two products would be 435% of the direct labor dollar cost for those products - calculated amount $53,496.

The Minnesota Valley Canning Company started in 1903, and was one of the first companies to be recognized through their advertising personality, "The Jolly Green Giant." As consumers became familiar with the marketing character, the Minnesota Valley Canning Company soon changed their name to The Green Giant Company. The company became a well-known canned and frozen vegetable foods vendor. To lengthen the growing season, the company expanded from Minnesota into California during the 1950 's and 60 's. Along with the expansion came the construction of a freezing vegetable facility located in Salina, California.

43). There were other plant foods on the market that were selling similar products comparable to the All-Purpose Plant Food. The two competitive gardening products were Scotts Miracle-Gro and Spectrum brands (Clow & Baack, p. 45). Miracle-Gro was a substance that when added to water became a fluid matter used to grow and feed plants (Clow & Baack, p. 46).

Before Miracle-Gro became Scott’s Miracle-Gro, they outsourced to contract manufacturers for production. Scotts manufactured their spreaders since it acquired Republic Tool and Manufacturing. Scott’s Miracle-Gro manufacturing facilities have a plant in Temecula, CA. The Temecula plant improved productivity, efficiencies, and also different innovations including a new assembly process for their hand spreader. Also, they invented an in-mold labeling process that produced a label that did not fade, scratch,

Synopsis and Objectives The owner of a midsize folding carton printer is considering the replacement of an old machine for cutting sheets of paper from rolls (a sheeter) with a new one. This standard capital budgeting analysis, which requires identification of both the relevant cash flows and the relevant discount rate, is enhanced by an alternative that is not explicitly stated but can be readily identified and analyzed—to outsource all sheeting and close down the sheeting operation. This alternative, which turns out to be financially optimal based on quantifiable case facts, forces students to consider strategic and other nonquantifiable

Wriston’s Detroit plant is no longer a viable operation due to long-term capital underinvestment and product-process mismatch. It is recommended that the plant be phased out of operations over a five-year period with production and staff gradually shifted to a new plant to be built in the Detroit area. Further, it is also recommended that division accounting procedures and evaluation mechanisms be modified to allocate revenues/costs allowing for the synergistic benefits of Detroit’s products, and to recognize inherent manufacturing complexities, respectively. Issues Detroit’s production is unique when compared to other Wriston plants. Runs are typically lowvolume, involve significant set-up time, and vary significantly due to the sheer

to the future of the company. A plastic injection mouldings manufacturer, they had for the last twenty