Since this is an interviewer-led case, the interviewer should guide through the interview.
The case is split into three parts.
In the first part, the interviewee needs to evaluate existing products and machine capacity. The interviewee should calculate the client’s most profitable product mix, keeping production capacity in mind.
The second part is directed towards answering the second key question of investment in a new bag machine. The interviewee must ask for more data and answer this part mostly qualitatively.
The third part is optional. It is an extension of the case based on a possible recommendation from the second part. The interviewee must calculate the amount of profit that the new product must generate in order to justify investing in a new machine. The interviewee should also sketch and interpret the elasticity curve.
The questions in the big boxes should be read aloud to the interviewee.
Your client is a very small consumer packaging company. One of their product lines is plastic bags that are designed to store food. They currently have one production machine dedicated to this product.
Since product demand currently exceeds your client’s production capacity, they want you to answer two key questions:
1. How can they best utilize their current bag capacity?
2. Should they invest in a new bag machine?
The client’s R&D team has just come out with a new bag. It’s a 2-in-1 bag, one side holds your sandwich and the other side holds your chips or lettuce to keep things from getting soggy. This bag is 6”.