Reasons for Locating Manufacturing Plants
There are also occasions in the manufacturing industry that plants have been located for many complex purposes or factors. These considerations could include the supply of labor, the cost of shipping, the availability of raw materials, demand stability, and many more.
The Vote of Ulukaya
The vote of Ulukaya.
The Correct Decision
Ulukaya has made the correct decision to open a second production plant in Idaho. The establishment of multiple plants is one of the measures that will allow Chobani to achieve its aim and its desire to spread to foreign markets. However, to minimize the cost of transportation, other companies are situated near the sources of raw materials (Harris, Chauncy, 320). Apart from the cost of production, Ulukuya could have been motivated to open this plant by the fact that he already has the required capital to set up the firm. He could also have cited the aspect of time for transporting milk also as a disadvantage. However, milk is a highly perishable good and its transportation could increase the risk of losses to the company (Richard 440).
Gauging Market Demand
For Chobani to be in a position to gauge the demand for Greek yogurt in the market, they should introduce a new product or a new flavor still in their line of products. This will help to examine the response of the consumers to the new product in relation to the existing one (Kadiyali 350). The other way in which Chobani can gauge the market demand is the increase in the quality of yogurt they offer. This will help to tell whether the new product will outdo the existing one depending on how the consumers will respond. Finally branding and labeling of the yogurts in a different manner. This will help the consumers to perceive the product as different hence this can tell of the demand in terms of the product offered (Grunert 280). The factories operation control schedule helps the factory to ensure there is consistency in production and as well as the quality is maintained or even made better (Gupta 694).
Ease of Setting a Second Plant
From the above discussion, it’s evident that Ulukaya will be in a position to set his second plant in Idaho with great ease.
Work Cited
Harris, Chauncy D. "The, Market as a Factor in the Localization of Industry in the United States." Annals of the association of American geographers 44.4 (1954): 315-348.
Schallenberg, Richard H., and David A. Ault. "Raw materials supply and technological change in the American charcoal iron industry." Technology and Culture 18.3 (1977): 436-466.
Kadiyali, Vrinda, NaufelVilcassim, and Pradeep Chintagunta. "Product line extensions and competitive market interactions: An empirical analysis." Journal of Econometrics 89.1 (1998): 339-363.
Grunert, Klaus G. "Current issues in the understanding of consumer food choice." Trends in Food Science & Technology 13.8 (2002): 275-285.
Gupta, Mahesh, and AmarpreetKohli. "Enterprise resource planning systems and its implications for operations function." Technovation 26.5 (2006): 687-696.
