UNIFORM DELIVERED PRICE MANUFACTURER: A CASE STUDY OF COCA-COLA LTD.

This paper discusses the locational patterns of plants for Coca-Cola Ltd., a multiplant, uniform delivered price manufacturer. The uniform delivered pricing strategy is rationalized. A nonlinear mathematical programming technique to determine optimal plant locations, sizes, and market areas through the trade-off of internal economies of scale with transportation costs incurred, due to spatial price equalization, is presented. The actual locations, sizes, and market areas of southwestern Ontario Coca Cola bottling plants are compared with the results obtained from the normative model. It appears from the results that the plant location problem is easier for the firm to solve than the plant size problem.