Procter & Gamble - Restructuring the Edible Oils Division
The primary decision is whether Procter & Gamble (P&G) Canada should abandon one or more of the edible oil product lines. The secondary decision, conditional on the first, is the method of production. The alternatives include outsourcing the production to P&G's U.S. plant in Ivorydale, Ohio, or to outsource to a new Canadian facility which will also produce Tenderflake, the primary competitor of P&G's product, Crisco. The primary focus is on marginal benefits and costs. (A Microsoft Excel spreadsheet is available for use with this case, product 7A96B011.)
The objectives of this case are to teach students about: re-structuring to add value; incremental cash flows; investment analysis/capital budgeting; outsourcing.
Canada/USA, Large, 1991
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