Question

In: Operations Management

SW Company, a chemical firm, has developed an inexpensive chemical specialty item, and Iskandar, the manager...

SW Company, a chemical firm, has developed an inexpensive chemical specialty item,
and Iskandar, the manager of the company, hopes it will find a huge market as a household
product. Iskandar wants to package this product in one-gallon and two-gallon sizes.
A number of container materials would appear to be practical – glass, aluminium,
treated paper, steel, and various types of plastic. A young engineer who Iskandar hired recently
and assigned to the packaging department has done a container-disposal study that shows that
the disposal cost for one-gallon containers can vary by a factor of three depending on the
weight of the container, whether it can be recycled, whether it is easy to incinerate, whether it
has good landfill characteristics, et cetera.
SW Company’s marketing expert believes that the container material with the highest
consumer appeal is the one that happens to present the biggest disposal problem and cost to
communities. He estimates that the sales potential would be at least 10 percent less if the
easiest-to-dispose-of, salvageable container were used because this container would be
somewhat less distinctive and attractive.
Assuming that the actual costs of the containers are about the same, Iskandar must
make a decision.

Solutions

Expert Solution

In my opinion, the best solution for the container would be different types of plastics and suggest that Iskandar also should make the same decision. This decision was made on the basis of the following reasons for ruling out the other materials or containers.

- Glass: Being a house hold product, the major feature that we look into while designing the containers should be the ‘ease to handle’. And when this is a glass container, there are high chances that the same will not be handy or safe to be held especially when coming with a weight of 1 or 2 gallon as it would be added to the weight of the glass.

- Aluminum: As the product is a chemical based one, if the same is sold in aluminum container, there are high chances that the containers will be reused by the family for some other purposes. This would raise safety and hygiene issues if the containers are not properly cleaned before being used for some other purpose. So I would be better that this too is not used by SW.

- Treated Paper: This type of containers cannot be relied upon for long term storage. As the product is a chemical, it might be stored on a long term basis and if the container is not compatible for the same then the storage might be difficult. Hence this also would be ruled out.

- Steel: Coming to steel, I found the same problem as the aluminum. In this also there is a chance that the containers might be used for some other purposes despite of being clean and hygiene.

Thus I suggest that SW and Iskandar choose the plastics as the solution for container. They can also take necessary steps like associating with recycling agencies that collects and recycles the plastics so as to acquire the plastics containers after the usage from the customers by keeping a collection stall in a supermarket as a campaign and hand over the same to the recycling companies so as to recycle the same and reuse it.


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