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4.5 Case Five

 

Seventy percent of the business volume of the Osman construction company is in the building of state and federal highways. Competition in highway construction predominantly comes from firms within 50 to 75 Km of the city in which Osman company is located. This is primarily because the high cost of moving concrete or asphalt products to the job site prevents economical long distance hauling of materials or equipment. Osman has its own sand and gravel pits a few Km out of town and sells both to itself and competitors.

 

Selection of the bidding contractor is usually made six months to a year before work is begun and major jobs take about three years to complete once started.

What are the key factors Osmanís highway division should consider in determining how far into the future it should plan? What would your recommendations be and how would you support those recommendations?