Catawba Case

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Harvard Business School 9-191-053 rP os t Rev. June 28, 1994 Catawba Industrial Company op yo Marge McPhee, general manager of the compressor manufacturing department of Catawba Industrial Company, quickly spotted the reports that she had been waiting for in the pile of mail that had accumulated during her trip to a West Coast industrial equipment trade show. A sales forecast and a cost tabulation for a proposed new, light-weight compressor provided her with the information she needed to ascertain whether or not to introduce it, what volume to produce, and what price to charge. Catawba Industrial Company, located west of Charlotte, North Carolina, was a major supplier of automatic industrial paint systems (used…show more content…
Aguilar prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 1990 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 This document is authorized for educator review use only by Linghua Wang, HE OTHER until May 2016. Copying or posting is an infringement of copyright. or 617.783.7860 191-053 Catawba Industrial Company rP os t The cost figures for the new product that had been prepared by the production engineering department (see Exhibit 1) were higher than Marge had anticipated. This was of some concern to her since the compressor department was operating at full capacity, and the new unit therefore would have to generate a higher return than the standard product to justify displacement. Standard Compressors Light Weight Compressors op yo The compressor plant, capable of producing four standard compressors per day, operated two shifts
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