Foulke Consumer Products, Inc: The Southeast Region Harvard Case Solution & Analysis


Foulke Consumer has been a victim of its own success. As Foulke Consumer recently acquired Brand A businesses throughout the market, this success brought up some concerns for their operations and the organization. Foulke Consumers is looking for country-wide strategy, where they can utilize their assets to their full capabilities and capacities. In this scenario, we analyzed the business models and earning streams of Foulke Consumer.

When company was experiencing unusual growth, southeast region was the main contributor to that abnormal growth and earnings.Southeast facility consisted of Orlando, Lexington, and Atlanta plant which were contributing to almost 13% of the margin. Foulke is considering about opening up two more plant facilities, Lake City and Fort Myers in their southeast region.

Lexington is most efficient plant facility among its other manufacturing sites, while Atlanta is largest of them all. Orlando’s production facility and plant’s market value soared and escalated to 3.25 million. Orlando had the largest production facility, but it was lacking efficiency and it needed tighter control and management to control over. Atlanta had 175000 units capacity, smallest among Orlando and Lexington. Lexington just edged out its efficiency and production capacity to 187000.

We are tasked to perform the linear programming which results in profit maximization and optimal point, where company can decide on future expansion. Foulke Consumers are looking to expand the existing plant facility’s capacity and opening up two more production facilities in Lake City, Fort Myers. Lake City’s production attributes are similar to the Lexington, while Fort Myers is closer to Miami, where Foulke has most of the customers and higher selling. Fort Myers attributes resembles to the Orlando plant which has more proximity and accessibility to the Miami region. Assessing the options, we weighed up the alternatives and evaluated the alternatives, for further expansion and growth of the company. We found out that Orlando was running on full capacity which was around 75000 units and we found out its cost to be $36,689,686.84.While, the other option prevailed which was about expanding Lexington to 50000 units capacity and its total cost was estimated to be around $36,081,448.85. Based on our assessment, we concluded that Lexington would be running at this production capacity and will be more profitable for the company.

Foulke Consumer Products, Inc The Southeast Region Harvard Case Solution & Analysis

The final alternative was to shut off Atlanta plant production facility, which we found out, could cost company around $35,510,611.22. The cost of closing the facility was more than original cost, which is why we concluded that company should never consider shutting off Atlanta.

Decision Problem

While, demand for the products were ever increasing in southeast region and company had to evaluate the options and weigh up the alternatives. Foulke had acquired Brand A licenses across the country, so the market was saturated andwasn’t confined to allocated and limited territories. Orlando plant’s product could be sold inMiami as well as Lexington. The company had to weigh up the options to decrease costs, and increase efficiency and production capacity in order to cater the demand. All plants had different profitability margin, Lexington was considered ideal case among them..............

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