Platinum Box - Supplier Selection

2552 WordsMar 7, 201111 Pages
Contents Executive Summary 2 Issue Identification 3 Environmental and Root Cause Analysis 5 Alternatives 6 Recommendations & Implementation 7 Exhibits 8 Executive Summary Platinum Box Ltd. is at a strategic juncture; it has enjoyed a phase of consistent growth over the last few years, and built on this growth is planning to expand operations to take advantage of new markets in the USA. Critically, the equipment (printing presses) that have enabled Platinum’s growth and success are approaching the end of their life-cycles, as evident in doubling of their maintenance costs over the last two years. If this equipment is not replaced in the near future, Platinum cannot expect to expand production or to effectively push…show more content…
There are three potential sources (JabaKing, Merakuri and Pnutype) available to Platinum for the equipment that will replace the aging presses currently in use. Several key factors need to be considered when making this decision not least of which is the overall cost of acquiring the new equipment. To this end, a Total Cost Analysis (Exhibit A) evaluation of the suppliers has been employed to fully assess the available alternatives, and to make the subsequent recommendations on supplier to choice. Direction given by Jim Hicza, has made in clear that cost considerations will be a primary concern. Consideration of the ability of the equipment to meet the anticipated future capacity demands, and how this equipment will facilitate the growth goals of Platinum, is vital. Analysis of the projected required capacity (Exhibit C) reveals some interesting and strategically important insight; if Platinum continues to grow at the expected rate, today’s purchase of new presses will not be able to meet the projected demand in 5 years (2010), unless additional presses are purchased, or factory hours are expended – perhaps with the addition of a third shift. This fact introduces the option to retain some of the currently functioning JabaKing machines, while adding additional presses piecemeal over the next 5 years in order to meet demand. This approach will alleviate the need for a large capital investment upfront,

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