Industrial Grinders Essay

2353 Words May 7th, 2012 10 Pages
Case Study - Industrial Grinders N.V.

Problem Statement:
Industrial Grinders, N.V. has decided to start manufacturing and selling plastic rings for use in their machines. Currently, they manufacture and sell steel rings, along with the machines they also manufacture and sell through another division of the company. They recently discovered that a competitor in France will now be selling plastic rings. These plastic rings will serve the same purpose as the steel rings Industrial Grinders manufactures. However, they cost less to manufacture and they last longer. Management has decided that Industrial Grinders will now start to manufacture plastic rings. Lawrence Bridgeman, General Manager of the German plant, is tasked with
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This would cost the $64,584.00 previously mentioned, but there is a risk of current customers finding out about the plastic option not mentioned to them. This is not measurable, but it does need to be considered. * Manufacture the steel, sell it in 90% of their markets at a reduced cost, while also offering plastic rings. I’m not sure that would be great, but it could help recoup some of the cost of manufacturing. And if word did get out about the plastic rings, it could be offered to appease any angered customers. However, offering them a better product at the same price might anger them even more than merely finding out about it to begin with. * I think the final option to consider is to just switch to plastic while they typically slow down production in the summer months anyway. Even if sales remain at 690 rings per week in this timeframe, there will be enough stock left by mid-September to last 21.88 weeks. This way, if the company’s estimate of “mid-September” is a bit too optimistic, they will have plenty of steel to last until the company is switched over. Rather than use their staff to continue to manufacture steel, use this time to convert the shop (whatever that entailed, we were never told) and train them on the new processes. Another unknown is how much more training the staff might

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