Hilton Manufacturing Company
Case Study Analysis
Hilton Manufacturing Company
9-192-063
Table of Content
1.1 Executive Summary…………………………………………………………………3
1.2 Problem Statement……………………………………………………………………3
1.3 Data Analysis………………………………………………………………………….4
1.4 Questions……………………………………………………………………………….5
1.4.1 If the company had dropped product 103 as of January 1, 2004, what effect would that action have had on the $158,000 profit for the first six months of 2004? ( See exhibit 2)………………………………………………5
1.4.2 In January 2005 should the company reduce the price of product 101 from 9.41 to 8.64?…………………6
1.4.3 What is Hilton’s most profitable product?…………………………………………………………………………..7
1.4.4 What appears to have caused the return to profitable operations in the first six months of 2004?…………..8
1.5 Generating Activities……………………………………………………………………8
1.6 Recommendations……………………………………………………………………….9
Exhibit 1.4.1.1 Should product 103 be dropped? (3 ways to see)……………………………………………….…………....10
Exhibit 1.4.2.1 Should price of 101 be dropped to $8.64?……………………………………….…………………………11
Exhibit 1.4.3.1 Which product is most profitable?…………………………………………………………………………..12
Executive Summary
Hilton Manufacturing commenced business in 1976 and now operates from a modern factory of 10,000 square meters, located in Dandenong, in the South East area of Melbourne. To meet increased business demands of our customers in Queensland, Hilton Manufacturing has recently established a second manufacturing plant of 4000 square meters in size, in the South West region of Brisbane. Hilton is now the preferred supplier fuel tanks and associated mounting component to companies including Volvo & Mack, Kenworth, Mercedes, Iveco and Western Star. Hilton Manufacturing also supplies all of the Australian truck companies with aftermarket products and is a major supplier to truck aftermarket of its own unique fuel tank products via its distributors located around Australia. Hilton has used the skills it has
Hilton Manufacturing Company
9-192-063
Table of Content
1.1 Executive Summary…………………………………………………………………3
1.2 Problem Statement……………………………………………………………………3
1.3 Data Analysis………………………………………………………………………….4
1.4 Questions……………………………………………………………………………….5
1.4.1 If the company had dropped product 103 as of January 1, 2004, what effect would that action have had on the $158,000 profit for the first six months of 2004? ( See exhibit 2)………………………………………………5
1.4.2 In January 2005 should the company reduce the price of product 101 from 9.41 to 8.64?…………………6
1.4.3 What is Hilton’s most profitable product?…………………………………………………………………………..7
1.4.4 What appears to have caused the return to profitable operations in the first six months of 2004?…………..8
1.5 Generating Activities……………………………………………………………………8
1.6 Recommendations……………………………………………………………………….9
Exhibit 1.4.1.1 Should product 103 be dropped? (3 ways to see)……………………………………………….…………....10
Exhibit 1.4.2.1 Should price of 101 be dropped to $8.64?……………………………………….…………………………11
Exhibit 1.4.3.1 Which product is most profitable?…………………………………………………………………………..12
Executive Summary
Hilton Manufacturing commenced business in 1976 and now operates from a modern factory of 10,000 square meters, located in Dandenong, in the South East area of Melbourne. To meet increased business demands of our customers in Queensland, Hilton Manufacturing has recently established a second manufacturing plant of 4000 square meters in size, in the South West region of Brisbane. Hilton is now the preferred supplier fuel tanks and associated mounting component to companies including Volvo & Mack, Kenworth, Mercedes, Iveco and Western Star. Hilton Manufacturing also supplies all of the Australian truck companies with aftermarket products and is a major supplier to truck aftermarket of its own unique fuel tank products via its distributors located around Australia. Hilton has used the skills it has