Transporting Bakery Products

The owners of a large baking company located in Atlanta concluded that their plant was too old and too inefficient to continue in operation, so the decision was made initiate a major project that would completely renovate the facility. The project would require that the plant be shut down for a period of several months. New utility needs were estimated, and negotiations were opened with the appropriate utility companies. It was determined that the existing warehouse would be adequate for holding and transferring products brought in from the company's regional bakeries near Atlanta; because such transfers were essential to maintaining market presence after the old bakery was shut down.

The consulting engineer was directed to proceed with layouts, and a project manager was called in to coordinate the remainder of the project. He would be responsible for construction and for achieving overall project cost and schedule control. He asked what was the budget for transporting products from the remote bakeries to the Atlanta warehouse. A transfer budget had not been prepared, but, when it was, it was found that the project would not meet the ROI hurdle rate. The project was cancelled.