Norwegian Salmon Processing Facility, Trondheim Case Studies Examples

Summary

The case study of Norwegian Salmon Processing Facility, Trondheim, highlights the facility that is operated by NorSal Trondheim. Its main purpose is to purchase fish along the North Sea, and to resell it to customers for resale purposes as well. The plant manager, Inger Hansen, feels that the plant should be modernized to increase its capacity. The modernization is simply to upgrade existing equipment to increase its output. This would be more cost effective as the older machines have been paid for, there would be an increase in production, but above all there would be a fifty per cent decrease in energy consumption, and one would assume an increase in profits.

Study Questions

What is the productivity of the processing facility, with the equipment currently in use?
NorSal Trandheim’s productivity of the processing facility, with the equipment currently in use is 135,000 pounds per week.
What would the productivity of the plant become if the new equipment were purchased and implemented?
The productivity of the plant may become 180,000 pound per week in case new equipment purchased and implemented.
What would be the amount of additional expense on equipment that would make productivity of the two systems equal?
The more rational way to reach the productivity of 180,000 pound per week for current equipment would be the increasing of the quantity of the workers from 30 to 40 for a shift. Consequently, the salary expense will rise (from 27,000 dollars to 36,000 dollars in a week). Additional expense will account for 9,000 dollars in a week in this case. If the plant installs new equipment, the additional expenses will be 5,000 dollars in a week. This amount is due to energy economy that new equipment allows and maintenance the current quantity of the workers.

What might happen if energy costs increase in the future?

In case energy costs increase, the additional expenses will rise. In this case, the price of the production will be raised. Therefore, we can see that the implementation of new equipment would be rather profitable.