Hello.
Last week I just had an interview in a big 4 consulting firm (I passed). However I still curious about my answer regarding the final question that they raise to me.
Context:
The case is about capacities expansion for golf-stick manufacturing company because increasing demand in the next 2 years. After we discuss about the case, we believe doing factory expansion is a great idea. The question in the end was:
" The CEO just arrived and he need your opinion regarding what risk that they need to think when they want to expand their factory, and how they mitigate them? "
.
My answer was:
1) Hidden cost in the variable, because when we expand the factory, there are also a lot of variable cost that will increase (labor, maintenance, technology), we mitigate it by checking the cost side and make sure we already analyse all the cost that we need to expand
2) Potential decreasing market in the future, we only had projection for the next two years and I am afraid after two years the market will be shrinking due to some circumstances. We try to mitigate it by doing more research regarding the market behave, especially if we can project more precise for more than two years.
.
My questions are, is my answer make sense and is there something that I miss?
Thanks!!
