Premium Essay

Forest

In: Business and Management

Submitted By brittanykouba
Words 403
Pages 2
To: Group 2
From: Britany Kouba
Date: 9/24/2015
Subject: Forest Hill Paper Company
Forest Hill Paper Company is a small closely-held manufacturing company that produces paperboard in large reels. Their strategy is to produce a full range of products and to create a niche by focusing on customer service and rapid response to customer needs. The company is currently producing twenty different grades of paperboard. Forest Hill competes against large companies in a commodity market, which is why they strive for having a variety of products and services.
One issue facing the company is that paperboard industry’s demand fluctuates every three or four years. Therefore, the company will have large orders for a couple years and then minimal orders for a couple years. During the high demand years, the demand for paperboard exceeds the company’s capacity. Additionally, market share for domestic paperboard is declining as trends are growing for plastic and more environmentally friendly grades of paperboard. Forest Hill also has a large variety of products with different costs. Some of their products use more materials and take a longer time to produce, making the cost higher.
As a team, we should look at how the company is figuring out costs for each product and understand the costs that come with manufacturing the different products. We should also look at how slitting and grade changes affect cost. The team needs to look at what the cost drivers are. Within the next week, I think the team needs to be pretty much done calculating the costs as asked in the case questions. The next time we meet, we should focus on analyzing our findings. Then, we need to come up with a solution or recommendations for the company. Our profitability numbers need to be completed by October 8th. We need to have the rough draft of the memo done by October 15th, and then we need

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