A growing specialty food manufacturer, Upstate Vegan, specializing in

Hey why do you want to take 10k because that's the minimum monthly value for Albany,but in the question ,it is all about the optimistic growth projection

Question1

Assuming the most optimistic growth projections= 30%

A. Rochester (2nd year in the facility) – Assuming the most optimistic growth projections and no new product introductions.
>> 6,000 boxes per month during the first year with optimistic projections | after growth = 6000*130%= 7800 each line( 2nd year)
2 products = Sugar cookies+ Ginger cookies
So total capacity needed= 7800*2= 15600
Rochester: The smallest of the locations, with a capacity of 12,000 boxes per month.

NOT SUFFICIENT

B. Buffalo (3rd year in the facility) – Assuming the most optimistic growth projections and immediate introduction of both new products.
>>6,000 boxes per month during the first year | after growth = 6000*130% (2nd year)= 7800 *130% (3rd year) = each line(~10000)
Total = ~20000
+ Introduction of new products = 6000*2( 2 products) = 12000
Total capacity in 3rd year = 32000~
Buffalo features a production capacity of 25,000 boxes per month and manufacturing their product on shared equipment would cut demand in half.
So capacity reduced to 16000

SUFFICIENT

C. Albany (2nd year in the facility) – Assuming the most optimistic growth projections and the introduction of Oatmeal Raisin cookies in the second year.
>> based on the optimistic projections,-6,000 boxes per month during the first year
2 products = Sugar cookies + Ginger cookies
So total capacity needed= 6000*2*1.3= 12000 *1.3= 15600
+ Introduction of Oatmeal Raisin = 2000
Total capacity = 176000
Albany – Featuring a capacity of 15,000 boxes per month

NOT SUFFICIENT



Question2:
A. Buffalo (2nd year in the facility) – Assuming the most pessimistic growth projections and no new product introductions.
>> pessimistic growth = 4000boxes per month
25% growth makes it 5000 boxes per moth ( 2nd year)
Total capacity needed for 2 products = 10000 boxes per month in 2nd year
Buffalo features a production capacity of 25,000 boxes per month and requires a minimum order of 8,000 boxes per month and Buffalo further agrees to waive the minimum order requirement during the first year of the contract

YES


B. Rochester (1st year in the facility) – Assuming the most pessimistic growth projections and no new product introductions.
>> pessimistic growth = 4000boxes per month
Total capacity needed= 8000 boxes per month
Rochester: The smallest of the locations, with a capacity of 12,000 boxes per month and Rochester has also elected to waive any per month minimum order size.

YES

C. Albany (1st year in the facility) – Assuming the most pessimistic growth projections and the immediate introduction of Chocolate cookies.
>> pessimistic growth = 4000boxes per month( 2 products = 8000)
Chocolate cookies: generate sales of 2,000 boxes per month in the first year of introduction
Total capacity = 10000 boxes per month
Albany – Featuring a capacity of 15,000 boxes per month + Albany also requires a minimum of 10,000 boxes per month.

YES

why answer for 1C is YES
C. Albany (2nd year in the facility) – Assuming the most optimistic growth projections and the introduction of Oatmeal Raisin cookies in the second year.

lnm87 SajjadAhmad

please recheck the answer or whats wrong in the explanation above?

You have done it correctly. Your answers are perfectly fine. Kudos..!!
There's a glitch with the question's 1C question - its about most pessimistic growth. Checked it and found that - instead of
"Albany (2nd year in the facility) – Assuming the most optimistic growth projections and the introduction of Oatmeal Raisin cookies in the second year."
it was
"Albany (2nd year in the facility) – Assuming the most pessimistic growth projections and the introduction of Oatmeal Raisin cookies in the second year."

Apt0810 I think this answers your question as well.

C. Albany (2nd year in the facility) – Assuming the most PESSIMISTIC growth projections and the introduction of Oatmeal Raisin cookies in the second year.
>> based on the optimistic projections, 4,000 boxes per month during the first year
2 products = Sugar cookies + Ginger cookies
So total capacity needed= 4000*2*1.25= 10000
+ Introduction of Oatmeal Raisin = 2000
Total capacity = 12000
Albany – Featuring a capacity of 15,000 boxes per month

SUFFICIENT

In the question 2A, shouldn't the demand be reduced to half because of the shared equipment in Buffalo? Please explain the reason if I am wrong.

Thank you!­

As per the question stem, buffalo cuts the demand by half. So why are we considering the most pessimistic projection as a whole and not dividing by half?

­

­Hey! although it won't affect the answer but in 1C, can you please explain why you have added 2000 oatmeal boxes in the second year (as in 1B in Buffalo you added 2000*2 in the first year itself, which to me appears correct) and ignored 2000 boxes of chocolate and more so these should be in the first year itself so second year should be 12000*1.25 + 4000*2 = 23000­

Further in S2: when its written that Rochester has also elected to waive any per month minimum order size and the question states whether Upstate Vegan will have enough demand to meet the monthly minimum order for the selected facility, the how come the answer is a Yes
Any expert's comment is welcome!

Bunuel
In 2nd question, why do we not cut the production by half since we're talking about Buffalo????­

­Hi Fiji2000

In the Tab2 (Article 2) it is mentioned that "Enticed by the large capacity and low production cost offered by the Buffalo facility, Upstate Vegan has done extensive research and is confident that manufacturing their product on shared equipment would cut demand in half."

Reason being "Upstate Vegan is concerned that using the Buffalo facilities will have a negative effect on the sales because Buffalo uses equipment shared with non-vegan food manufacturers"

­Exactly, so why did we NOT divide by 2?

In the answers above by mSKR , the 2nd question first part. we say 5000 and then multiply with 2 for 2 products. but technically it'll be 5000 for both because it should be cut by half right?

I believe that 2A should be No as realized demand is half of projected demand for Buffalo. There appears to be an error in the solution.

Posted from my mobile device

Hello Sajjad1994 unraveled


Can you explain me why it has not been halved in Question 2A (Buffalo) & also can you explain me what do you mean pessimistic whether it is 25% (the lower one) or staying at the existing level.

For Question 2, the demand at Buffalo facility will be reduced to half, i.e. 5000 boxes (10k/2), then how will it fulfil the minimum order requirement? Can anyone please help.