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Running Head: AGRI-CHEM CORPORATION 1 Assignment 7: Agri-Chem Corporation California Southern University MGT 87540 Dec 16, 2019 Dr. Bruce Gillies
AGRI-CHEM CORPORATION 2 Agri-Chem Corporation Introduction In the summer of 1980, an unprecedented heat wave caused a natural gas shortage. As a result, natural gas supplies were being rapidly depleted. Agri-Chem Corporation’s general manager Harry Sinclair was notified of this issue by Ben Elliot of Enerco, the main producer and distributor of natural gas in the Gulf South Region. In cases of a shortage, Enerco had a plan to allocate gas to its customers under guidelines set by the Federal Power Commission. Agri- Chem’s use of natural gas was mostly second and third priority classification under the allocation provision. Enerco was authorized to curtail supplies during shortages, thus, Agri-Chem’s dilemma was deciding which of its complexes would be least affected by the curtailment. The following is an analysis of Agri-Chem’s decision process. Analysis During a gas shortage, Enerco’s “rolling brownouts” consist of the company monitoring its pipeline pressures and ordering reductions to maintain minimum levels. Ben Elliot preferred that their customers initiate the reduction process to lessen the effect on their industrial processes. Agri-Chem’s complexes consisted of a Texas Division that would be included in the

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