Opening a new temporary plant may be an ideal answer to the lack of capacity, but the New England location is far from ideal. Elliott must weigh the problems associated with the new plant to the benefits of increased capacity. If all forecasts confirm the need for the increased capacity before the new state-of-the-art facility opens in three years, then perhaps Elliott should seek an alternative location.
Since the new plant will be located in the southwest, perhaps temporary space can be found there. Another alternative would be to plan production of the new plant to open in stages. Perhaps that would forestall some of the demand requirements. A third alternative would be to try to locate manufacturing space nearby one of the existing Byte facilities. When the temporary plant would close, job opportunities could be found in the permanent facilities. Production efficiency might increase production at the existing facilities. If no other alternative is available, then Byte should be up front about the temporary nature of the work. Byte might have to offer assistance to workers in the form of housing or credit. Byte might also guarantee jobs in the new southwestern plant to any worker willing to relocate. Byte must see the opening of the temporary plant as a means to stop the erosion of the market share, but not as a way to increase profit margins. Understanding that the facility would never boost the bottom line is necessary. Sacrifices might, or must, be made by Byte if they go with the New England plant.
IX. EFAS, IFAS, AND SFAS EXHIBITS
Were inappropriate for this case.
FINANCIAL ANALYSIS
Was inappropriate for this case.