Question

Paper Co. is a medium-sized manufacturer of sanitary tissue products based in New York. The
company has been in business for over 43 years, mainly producing toilet paper and paper towels
that are sold exclusively through its retail network across the United States. Through the years, it
has been gradually expanding its production capacity and consumer base. However, over the past
month and a half, the company has been faced with an unprecedented and unanticipated increase
in demand, which has cleared out all its storage facilities and exceeded its manufacturing
capabilities. At this time, the demand continues to be high.

The company has an existing storage facility, which can be converted to a new production line.
The new production line would significantly increase the existing manufacturing capabilities.
However, this would require a substantial investment in remodeling of the facility and
purchasing of expensive equipment from a producer in London, UK. To proceed with this
option, it would be also necessary for Paper Co. to obtain a loan from a local bank and hire
additional staff. It is estimated that it will take at least one month for the new production facility
to start producing.

Paper Co. leadership is faced with a dilemma. If they don’t expand the current capacity, they risk
losing the market share to competitors that are more flexible in adapting to higher demand. At
the same time, the expansion is very costly and the long-term demand is uncertain.
You are hired by Paper Co. as a consultant to help make the right business decision and to come
up with an action plan.

Part A

How would you recommend for Paper Co. to proceed? Should it stay with the same production
capacity or increase it as described above? Provide a detailed explanation of the rationale for your recommendation.

Part B

Please describe potential challenges Paper Co. could be facing as a result of the decision made in
Part A:
1) One month from now
2) Three months from now
3) One year from now
State the challenges and explain how you would recommend Paper Co. to address each of those
challenges.

Answer 1

paper company must be improving the production planning.Currently comapny having less storage facilities and manufacturing capabilties,this would be change.The company can introduce a better production planning team,and the decisions will take accordingly.This is the best time to penetrate the market and making profit,So the company doesn't spoil this golden oppurtunity.Demand increase due to less availabilty of product in the market,So this is the time to produce high quantity product at high quality.With the help of finacial resources a company can raise the fund and enlarge the production capacity.A reasearch team can provide a better advice for how to improve technoloically and how to add better quality to the products.The company can focus into more production in less time,and not compromise the quality of a product,because customer and market acceptance is important for this time,this will make the longterm demand and longterm profit and also helps to make customer loyalty.So the company can proceed with the extension of production procedures and produce large quantity and better quality.

Rationale for Recammenadation

• It helps to penetrate the international market (Means it is a oppurtunity to make the product acceptance of new customers)
• It is a sudden increase of demand of this product of a comapny,may be the shortage in availabilty other brands,the company can see this situation positively and use this time to achieve the profits through the accepting of risk
• The copmany can give equal importance to quality as well as quantity,unless it will only a shorterm demand,We can make profit beyond the years to use this oppurtunity.
• The copmany must be improve storage facilities manufacturing capabilities for the longterm acceptance of the products as well as company,and would create a brand equity.
• Challenges can only make the changes.especially in the case of business,We will take challenges very pleasantly it will gie entire world for us,so use this oppurtunity.