Sensitibility Analysis Of Scotts Miracle Gro

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EXECUTIVE SUMMARY:
The increased manufacturing and operating cost at Temecula Plant (Spreader production) have influenced the decision of corporate people of Scotts-Miracle -GRO company to consider outsource the production of company to low wage country such as China, to increase the profit margin. So, Bawcombe, Director of operations, of Scott Temecula plant was under constant pressure to justify why Scott should not outsource/off shore. There are three alternatives- continue production in Temecula Manufacturing Plant, Outsource to China, Off shore in China. To arrive at logical solution, the qualitative analysis (risk/benefit analysis) and Quantitative & Sensitivity analysis is performed. It has been determined that staying in the United States at the Temecula plant in California will be the best decision for Scotts Miracle-Gro financially and with regards to their image and product quality.
INTRODUCTION:
• The comparatively high plant cost and labour cost created intense pressure on Scotts -Miracle Gro to look for alternatives – outsource/offshore the production to low waging countries like china
• The purpose of this report is to evaluate available options by performing Qualitative analysis (risks/benefit analysis) and Quantitative & sensitivity analysis. Finally, it is recommended that Scott-Miracle Gro should maintain operation at Temecula plant.
BACKGROUND:
• The 1995 merger of Miracle-GRO and The Scott company made Scott the largest company in American lawn and

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