Essay about Precision Worlwide Case

973 Words Apr 24th, 2015 4 Pages
Managerial Accounting
Week 2
Group Discussion
Week 2: Group Work- Harvard Business Case 1
Group Members: Michael Fant, Jennifer Meyering, Christopher Presley, James Ramson, Jacinta Stockton, Alistair Winfield, Judy Zeitang What action should Hans Thorborg take? Why?
Our analysis of this case is to advise Hans Thorborg to move to producing the plastic rings. It is important for PWI to evolve with the industry, and refusing to transition to the new product could have a devastating impact on their future sales. Although PWI has a strong presence in the market, it’s stated in the case study that the plastic rings have at least four times the wearing properties of the steel rings. Therefore, while the steel ring currently lasts for an
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Some customers could also just prefer to have the steel rings over the plastic rings despite all of the advantages of the plastic ones. He would also have the opportunity to sell the steel rings at a premium price. However, if he decided to wait until after the steel rings are being produced our group concluded that he could lose potential and current customers.
Option A. Use up all the steel before pressing the plastic rings. Let all the buyers know that in the near future we will be switching over to plastic. How much steel is used for the steel rings? 34, 500 rings can be made with the steel they have. This is late May timeframe. 100 rings $786 from labor and overhead for 1107-material cost = Calculate cost per 100 rings – sell just above that. Start at 1350 and if people run to the plastic rings then adjust the price as needed.

100 plastic rings are 279.65. Plastic is more durable $506 to produce 100 steel rings than it does $100 plastic rings. Conduct a survey to see what machines are compatible with taking the plastic rings prior to converting over to all plastic. A lot of machines won’t take the plastic rings. Email to all loyal customers. Disadvantage is that we can’t reach all customers. $1350 per 100 for each sale of plastic and steel. Instead of losing 100% of everything get back what you paid for it and take it from

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