You are Rebeca Andino Valladares, vice-president of operations at Alimentos Procesados de Honduras in Tegucigalpa. The president wants more margin without investing a single lempira in plant, and expects your August production plan on Monday, July 27, at eight. Three of your twelve products are already spoken for; the question is what fills the rest of the plant.
The situation
APH, as everyone calls it, makes enriched flours in Tegucigalpa, powdered dairy drinks and infant formula in San Pedro Sula, bakery mixes in La Ceiba and a line of nutrition products: twelve products, 145 people and 60% of sales in Guatemala and El Salvador. Planning counts the three plants as one pool of 2,400 machine hours a month. Each product takes between 5 and 12 hours a ton and leaves a contribution margin of 42% to 62% of its price, between US$147 and US$217 a ton. Each also has a monthly market ceiling that sales knows well.
The August sheet holds only three signed commitments: 60 tons of standard enriched flour, 80 of standard dairy drink and 75 of wholemeal bread mix. Together they use 1,335 hours and leave about US$33,900 of contribution. The other 1,065 hours are blank, and an hour not used in August is not recovered in September. The milk powder that the dairy drinks, the formula and the adult supplement need comes from a single importer, about 220 tons a month.
Each colleague has an answer. Karla Ordóñez, the finance manager: "Infant formula leaves 62%. Bread mix, 42%. I don't see why we keep filling the plant with bread." Mauricio Cálix, the sales manager: "If a distributor in San Salvador can't find our cake mix, he buys everything from the Guatemalan. I need all twelve lines on the shelf." Wilmer Escoto, head of planning: "Bread mix and standard dairy drink put out the most product per hour. I fill the plant with those." And the president, Héctor Fiallos, has adopted Ordóñez's spreadsheet as the yardstick for your plan.