North American Beverage Can Company (NABCC) is a US firm based out of Denver, Colorado. It was founded in 1920 and has grown to be the largest beverage can manufacturer in North America and second largest in the world. The company produces aluminum beverage cans and serves all of the major beverage companies who make soda, beer and energy drinks. NABCC has 15 manufacturing plants located all over the US that serve the US market and Western Canada. The company has one plant in Ajax, Ontario that serves Ontario and one plant in Montreal, Quebec that serves eastern Canada. The company has excelled at promoting and implementing environmental initiatives such as recycling and choosing like-minded partners and firmly believes that protecting the environment is the key to sustainability within its industry.

The Ajax plant produces over 180 million cans each month which is equivalent to 30 loads per day. Currently, 50% of the plant's volumes are shipped direct to the beverage companies for filling and the remaining 50% is shipped from third-party warehouses as required. Both the beverage filling plants and the third-party warehouse are currently located in Mississauga, Ontario. The Montreal plant produces over 90 million cans each month and operates in the same manner as the Ontario plant where 50% of production is shipped direct and 50% is shipped to a third-party warehouse located in Montreal.

In a recent board meeting, NABCC made the decision to close the Montreal plant due to production inefficiencies and failing production equipment. In order to accommodate the eastern Canada volumes, the board has decided to consolidate the Ontario and Eastern Canada volumes into one manufacturing plant. The board presented the planning department with two options for analysis: expanding the Ajax manufacturing facility or moving ALL production to a plant in Syracuse, NY.

Option # 1:

This option would require expanding the Ajax plant by only 30% (the plant has available capacity for part of the increased volumes) and doubling the storage volumes with the existing third-party warehouse in Montreal. The expansion of the plant would take approximately 3 to 6 months.

Option # 2:

Due to the current US government initiatives for promoting jobs within the US, the firm is considering the option of moving production to the US and serving the Ontario and eastern Canadian market from the US. In order to maintain service levels to the beverage companies, the company will have to increase the static inventory at the third-party warehouses to approximately 30,000 pallets. The Ontario and Montreal warehouses would receive 30,000 pallets from the manufacturing plant and ship 30,000 pallets to the beverage companies each month. The accounting department has completed an analysis on this initiative and has determined that moving production to the US is a viable option based on the current government incentives. Updating the plant and moving production to the US would also take 3 to 6 months.

As the Logistics Manager, you have been tasked with analyzing and recommending whether NABCC should move production to the US or consolidate production in Ontario. Your analysis must address the following:

1. Describe how infrastructure, demographics, government initiatives and any other related external factors will affect the company's decision on whether to re-locate the manufacturing plant in the US or consolidate production in Ontario.

2. How could the existing trade agreement negotiations with US and Canada influence the firm's decision on moving the manufacturing location to the US and exporting to Canada? Consider related government incentives and a changing political landscape.

3. Describe the factors NABCC will have to consider specific to: backhaul pricing, Law of One Price (LOOP) and border crossings.

4. How might environmental and/or safety initiatives within the transportation industry affect the firm's decision to locate in the US and when choosing a carrier for its transportation requirements? 5. What economies of scale might be achieved by the transportation firms chosen to service NABCC for the chosen option? Could there be any related diseconomies of scale?

You must provide convincing responses to all of the questions and provide a recommendation with a supporting argument.

*The Business Case Study Report is a formal report complete with an executive summary, table of contents, introduction, body, and summary/conclusions.