Sands Corporation

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SANDS CORPORATION WRITTEN ANALYSIS AND COMMUNICATION (WAC) NISHANT GADIA FSB-1 26TH August 14 SANDS CORPORATION LETTER OF TRANSMITTAL August 9, 1961 President, Sands Corporation Clairmont, USA Dear Sir, Enclosed is the report on “The Establishment of New plant”. This report examines the problems, options available and the different scenarios dealt with. Various factors have been taken into consideration for an attempt to take a wiser decision. I hope you find this report satisfactory and help you in taking wiser decision. Regards Vice President Manufacturing EXECUTIVE SUMMARY Sands Corporation was established in 1941 with an aim to manufacture range of parts for the aircrafts, automotive and agriculture equipment…show more content…
Two locations were found to be appropriate for the plant, first is on Kimberly Street just a few blocks away from the main plant. Second being located in Hampton, which is small town around 180miles from the main plant. The Executives of the company decided that they will eventually require minimum of 75000 Square feet of floor space and 600 labors (300 Skilled, 150 Semi-Skilled, 150 Unskilled) so as to operate efficiently. The estimated cost of the machinery and equipment needed to manufacture the parts is around $2 Million and this requirement was met by the government by equipping them with government owned equipment under a contract. The two options have their own pros and con which as stated as follows 1) KIMBERLY STREET: Two acres of land costing $50,000.  Situated near to the main plant.  Surplus labor available.  Resale value of the land is high.  Rate of Electricity, gas and water is cheap.  Union of labors. 2) HAMPTON: Ten acres of land costing $20,000.  Situated 180 miles away from the main plant.  Scarcity of labor  Cheaper wages  Rate of Electricity, gas and water is comparatively higher than Kimberly Street. PROBLEM STATEMENT The company has to decide between the two locations based on their virtues, availability and higher margin of profit. OPTIONS AVAILABLE There are two options for the establishment of the manufacturing plant. 1) Kimberly Street 2) Hampton CRITERIA FOR EVALUATION 1) 2) 3) 4) Land Availability of labor
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