Sands Corporation

1367 Words Dec 26th, 2013 6 Pages
SANDS CORPORATION
REPORT

Letter:
To: CEO, Sands Corporation
From: Management Trainee
Date: August 1961
Subject: Report on evaluating the options available for setting up a new plant either at Kimberly Street or Hampton.
There is a report enclosed specifying all the details for evaluating the setting up of the new plant either at Kimberly Street or Hampton.
I hope this report helps making your decision.

Executive Summary:
Located in the Midwestern part of the United States, Sands Corporation is a manufacturing company operating with three plants. Due to increasing government contracts there is a need for setting up a new plant, as there is no space and labour available in the existing firm.
Kimberly Street and Hampton are two options
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High demand for the military and space programs in 1960 and 1961 led to rise in contracts for the company which further increased sales. After world war ΙІ the demand for government contracts went down which lead to fall in net income and sales in the year 1945 and 1946.

The company executive, after studying various plant locations has an option of Kimberly Street and Hampton. Since Kimberly Street is located near the main plant and in an industrial area labours are easily available and the resale value will also be high in future. Employees working in this plant would be members of the union, who are operating in the main plant. Hampton is located in the middle of a farming area which is 180 miles away from the main plant. It has workforce but they are either working on their farm or they are hired by the industrial concerns located nearby. Selling a plant in the future in this location is difficult. Excellent transportation facility is available for both sites. The transportation cost for the raw materials and the finished products would be the about the same for both the plant sites. The construction of the plant would take about 4-6 months. If the company was unable to deliver the order on April 10, 1962, it would incur a day penalty of $1000 and also a lose out on future government contracts. Evaluation of the both the plants are necessary on deciding where to establish the…

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