Product details

In 1993, Eli Lilly is preparing to build manufacturing capacity for three new pharmaceutical products that it expects to launch in 1996. Management wrestles with a decision of whether to add specialized manufacturing capacity or flexible capacity. This question touches off a broad debate within the company about which strategy to follow for future facilities decisions. This case presents two alternatives (flexible and specialized plants) and describes the benefits and costs associated with each.; Requires students to analyze the tradeoffs between the alternatives and consider if and how each would help Lilly accomplish its strategic goals. Students should consider the net present value of the alternative investments, as well as explore the value of flexibility in manufacturing and capital investment decisions.