Sleepmore Mattress Manufacturing: Plant Consolidation

Abstract

The president of a well-established manufacturer of mattresses has asked his assistant to recommend whether to consolidate plants of three different locations. He must decide not only which criteria are most useful in making such a decision, but also how to weigh the different criteria in coming up with a single decision.

Excerpt

UVA-QA-0405

SLEEPMORE MATTRESS MANUFACTURING:

PLANT CONSOLIDATION

W. Carl Lerhos, special assistant to the president of Sleepmore Mattress Manufacturing, had been asked to study the proposed consolidation of plants in three different locations. The company had just added several new facilities as a result of the acquisition of a competitor; some were in markets currently served by existing facilities. The president knew the dollar savings would be fairly easy to calculate for each location, but the qualitative factors and the tradeoffs amongst them were more difficult to judge. This was the area in which the president wanted Lerhos to spend most of his time.

The major objectives in evaluating a consolidation plan for the sites were to maximize manufacturing benefits, maximize sales benefits, and maximize direct financial benefits. These objectives would be composed of exploiting 13 attributes (Exhibit 1). After spending some time looking at each attribute individually, Lerhos and the other officers of Sleepmore ranked them in order of most important to least important. They also added the best and worst possible outcomes for each attribute, which is shown in Exhibit 2.

Measurements

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Keywords: decision analysis multiobjective making