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Analyze whether to continue manufacturing in Canada

The pharmaceutical industry went through many changes in the 1990s and the early 21st century. NAFTA made a significant impact on Canadian manufacturing. The trade barriers were removed, and the company began to question whether it was cost effective to keep manufacturing products in Canada with higher labor costs and much higher taxes. In addition, the 245 acres of land that the facility was located was near a prime residential area and within a mile of Lake Ontario just outside of Toronto. The land alone was worth over $US 7,000,000.

What I am looking to analyze...

Analyze whether or not to continue manufacturing in Canada or move it back to the U.S. This requires research into transportation cost estimates from Colorado to Toronto. It also requires analyzing the impact on company image by shutting down a facility in Canada.

I want to draft a recommendation to management including estimated costs and benefits of shutting down or keeping open the Canadian facility and taht support my recommendation with a 12-month based action plan included.

Solution Preview

The response addresses the queries pasted in 827 words with references.

//In the following paper, suggestions are made to the company that whether it should continue manufacturing in Canada or move back to the US. The suggestions are made on the basis of transportation cost estimates and analyzing the impact on company image by shutting down a facility in Canada. The shifting decision of manufacturing unit is extremely critical, since it affects the company's image and production cost. //

The current situation of the company is in Canada. Due to the impact of globalization, there have been changes brought about in the working of the business. The trade barriers, which earlier existed, have been removed that have played an important role in facilitating trade. The cost of labor in the country is very high, which has impacted the cost of the products. Along with this, the taxation system is also very complex. It will be a wise decision for the company to shift to the US, as the company will have the benefit of rebates given to businesses in the US. This will play an important role in reducing the cost of production, which will ultimately lower down the costs incurred on labor. This will have appositive impact on the revenues and profits of the company.

The labor cost in the US is cheaper in comparison to that of Canada. Thus, it will be very beneficial for the company to establish a manufacturing unit in the US. The company ...

Solution Summary

The response addresses the queries pasted in 827 words with references.

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