BIO-DIESEL PLANT LOCATION DECISION

This case addresses biodiesel production plant location considerations. Bruce Nave had been using biodiesel in his own construction operation for over a year. With the advent of petroleum oil prices breaking seventy dollars per barrel, he saw an opportunity to start producing biodiesel on a commerci...

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Bibliographic Details
Published in:Journal of the International Academy for Case Studies 2008-08, Vol.14 (6), p.21
Main Authors: Metlen, Scott, Haines, Doug, McAlexander, Amanda
Format: Article
Language:English
Subjects:
Biodiesel fuels
Biofuels
Case studies
Construction costs
Decision making
Energy economics
Operations management
Overqualification
Petroleum production
Petroleum refineries
Profit margins
Profitability
Quality of life
Raw materials
Site selection
Students
Success
Supply chain management
Teaching
Variables
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Summary:This case addresses biodiesel production plant location considerations. Bruce Nave had been using biodiesel in his own construction operation for over a year. With the advent of petroleum oil prices breaking seventy dollars per barrel, he saw an opportunity to start producing biodiesel on a commercial scale. Bruce knew that the success of his planned enterprise would depend in part on location, as each location would have different start up cost, cost of living, local laws, cost of doing business, availability and cost of inputs, and cost of shipping raw materials and finished product. Differences in these costs could quickly erode the slim contribution margins that commodity items generate. The case ends with Bruce wondering where he should locate his biodiesel production facility. The purpose of this case is to provide a decision scenario to students that will be managing supply chains, logistic functions of a firm, and/or are otherwise involved in strategic decisions relative to location of capacity.
ISSN:1078-4950
1532-5822