Abstract:
In Part A of this case, Henry Fulton, the head of New York City's Bureau of Highway Operations proposes that, as a cost saving measure, the city build and operate its own asphalt plant to produce some of the paving material needed each year to resurface its roads, rather than purchasing it from the private sector under a competitive bidding process. In Part B of the case, we learn of the outcomes of operating the new facility.
Learning Objective:
This case has been used to foster discussion of a fundamental strategic decision: Should a public agency make or buy from private sources an important component of its productive activities? In this context, it supports consideration of a number of key points, including: the difference between price and cost; the idea of a strategy for a public agency; and the importance of expanding an alternative set for a complicated choice.
