<p> BIO-DIESEL PLANT LOCATION DECISION</p><p>Scott Metlen, Doug Haines & Amanda McAlexander University of Idaho</p><p>Case Objectives and Use</p><p>This case addresses plant location and size considerations. The case is appropriate for undergraduate seniors in supply chain management, logistics, and/or general operations and marketing classes. Understanding the business issues presented is critical to firm success thus, to a student’s success when they become involved in such decisions. The time a student must spend on this case for total understand will vary depending on a student’s base level of understanding, but most business students should be able to complete the case in four to six hours. Presented in the case is information detailing the nature of bio-diesel production. Then associated costs and challenges, and market opportunities for bio-diesel production in three possible locations are presented. Students can utilize this information to determine the best location.</p><p>Case Synopsis</p><p>With petroleum based diesel continuing to erode profits, Bruce Nave, president of Western Industrial Resources Corporation (WIRC), started using bio-diesel from plant oils in 2005 to help fuel their diesel engines. These engines provided power to 65 trucks and an assortment of welders, compressors, and earth moving equipment. Based on the success of using bio-diesel to fuel the diesel powered equipment and the increased interest in bio-diesel world wide that was driven by $70/barrel petroleum, Bruce decided to start a commercial bio-diesel operation named Wi BioFuels, Inc. Once Bruce made the decision to construct a bio-diesel production facility he had to decide where to locate that facility. </p><p>Bruce knew that location decisions significantly affect the profit margins and eventual success of a firm due to many variables. He knew these variables included availability and proximity of raw materials, appropriate labor, regulations and tax structure, proximity of customers, governmental incentives, proximity of competition, quality of life, proximity to information, cost and availability of utilities, real estate costs and availability, and construction costs. Bruce was in a quandary after analyzing the data relative to all of these variables. One set of data suggested one location; another set of data suggested another location.</p><p>The authors developed the case for class discussion rather than to illustrate either effective or ineffective handling of the situation. The case, instructor’s manual, and synopsis were anonymously peer reviewed and accepted by the North American Case Research Association (NACRA) for its annual meeting, October 19-21, 2006, San Diego, CA. All rights are reserved to the authors and NACRA. © 2006 by Scott Metlen, Doug Haines, and Amanda McAlexander. Contact person: Scott Metlen, University of Idaho, PO Box 443161, Moscow, ID 83844-3161, 208- 885-5480, [email protected]. </p>