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Chocolates

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Submitted By jhell004
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Case 5-1, Garland Chocolates

1. Identification of Problem: -Key issues/problems
Garland Chocolates is not manufacturing and packing their brand of Edgeworth Toffee as efficiently or effectively as possible.
-Subsidiary issues
48% Packing efficiency, when the goal is 80%.
Scrap rate is 9.6%, when the goal is 1.2%.
Maintenance cost is expected to rise over 12 years and it is already $18,000.00.
The cost of replacing the 2 packing lines for edgeworth toffee is $140,000.00, however it is expected to achieve the BPO efficiency and scrap rate targets.
The cost of replacing the 20 year old manufacturing line is $600,000.00, though it was close to the target efficiency of 80% but is showing signs of deterioration.
Marketing has proposed a new marketing strategy (new packaging format) which would deliver an estimated 20% increase in sales.
Outsourcing the packing lines would cost $35,000.00 up front but the actual cost of production will decrease from $95.70 per case to $68.00

2. Situational Analysis:
Internal
Strengths
Garland Chocolates of London, UK, is a leading global food manufacturer with a wide range of products operating out of more 50 plants globally, 8 stationed in the US. Garland’s products were among the leading brands in the industry which were sold in a variety of different locations: (Grocery store chains, boutique candy shops and convenience stores).
Weaknesses
Garland Chocolates has few weaknesses, the most pertinent being that the manufacturing and packing lines of the Edgeworth Toffee Brand are older and depreciated, therefore not as effective not efficient as the company would like them to be.
External
Opportunities
We have many different options. We can replace either just the packing line, just the manufacturing line, or both. We can also outsource and have another company manufacture and pack for us, lessening

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