Best Chip: Expansion Strategy Harvard Case Solution & Analysis

Best Chip: Expansion Strategy Case Solution

Problem Statement

The top management of the company is analyzing the expansion plan and wants to expand the manufacturing capacity of the company. It is probable that the management of the company has many options, which could be undertaken with respect to the expansion policy however, each option has different associated limitations such as shipping cost and purchase price, as the company wants to minimize the cost and wants to expand the production facility, therefore optimizing schedules should be established which is a critical problem on its own.

Financial Analysis

It is expected that with the help of excel modeling, it could be easily identified that which location is maximizing the production facility of the company without increasing cost as compared to the other options.
It is expected that the total cost of each location includes both purchase price and shipment cost. The shipment cost of each location depends upon the cost per ton of each product. As the cost per ton of each product is different for each location and for each product, therefore firstly the total demand of three products such as corn, wheat and potato is identified with the help of mixes of each product.
After identifying the minimum required quantity of each product, the total shipping cost of each location is calculated with the help of material shipping cost of each product and each location.
By adding the total shipping cost and purchase price of each location, the total cost of each location is identified. As the purchase price of the location Yuma, AZ is minimum among all, therefore the total cost of this location is also low as compared to the other locations. (Figueiredo, June 2011)...................

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