I.

Background
Byte Products, Inc., is primarily involved in the production of electronic
components that are used in personal computers. Although such components might be
found in a few computers in home use, Byte product are found most frequently in
computers used for sophisticated business and engineering application. Byte Product,
Inc., currently has total sales of approximately $265 million. It is regarded as one of
the largest volume suppliers of specialized components and easily the industry leader
with some 32% market share. A dramatic surge in demand, high profitability, and the
relative ease of a new firms entry into the industry explain in part the increased
number of competing firms. Because of that, it faces a major problem that Byte
simply cannot meet the demand for these components. James M. Elliott recognizes
the gravity of the problem. If Byte cannot continue to manufacture components in
sufficient number to meet the demand, buyers will go elsewhere. As a long term
solution to this problem, the Board of Directors unanimously authorized the
construction of a new, state of the art manufacturing facility in the Southwest United
States. Unfortunately, an estimated three years will be required to complete the plant
and bring it on line. There are Several Solutions of these, a number of suggestions for
such a temporary measure were offered by various staff specialists, but rejected by
Elliott. For example, licensing Byte's production and process technology to other
manufactures in the short-run to meet immediate demand was possible. They though
it unlikely that any manufacturer would shoulder the fixed cost of producing
appropriate components for such a short term. This suggestions, obviously, would
make Byte's own products available to its customers at an unacceptable price.
Overseas facilities and licensing also were considered but rejected. The solution of
that is to abandoned plant currently is available in Plainville. This plant could
probably be leased immediately from its present owners because the building has
been vacant for some eight years. The staff is persuasive and notes that this option has
several advantages: first, there is no need for any licensing, foreign or domestic,
second, quality control remains firmly in the company's hand, and lastly, an increase
in the product price will be unnecessary. The temporary plant, then, would be used for
three years or so until the new plant could be built. Then the temporary plant would
be immediately closed. While taking the Plan to the Board, Elliott's must recommend
that the plan is established while Williams disagree the Elliot's plan or opinion.

PROBLEM STATEMENT
The demand of customers in computer and electronic industry are allocated because of the
new foreign and domestic firms that are rising in this kind of industry. Moreover, the solutions and
alternatives of Byte Products, Inc. are resulting to the expense of others. Like, the manufacturer would
shoulder the fixed cost of producing appropriate components and building a temporary plant in a
community area as a substitute for the new plant. In this case, the customers will avail the products at
an unacceptable price and the Plainville families will be affected and the community will lose its growth
in terms of innovations and improvement of the land respectively. With these, will Byte Products, Inc.
continue to maximize its sales and meet the demands of the target market over the years?

Objectives:

* To know the ways on how to be on top among other foreign and domestic firms that are rising
in the same industry.
* To know the proper costing of products to be able to give the customers a reasonable price.
* To be able identify on how to put up new plant in coordination with the Plainville families.
* To have knowledge regarding the information if Byte Products, Inc can still continue to
maximize its sales and if they can still meet the demands of the target market over the years.

VI. Alternative Courses of Actions

A. Byte Products Inc. must rehabilitate the abandoned plant in Plainville. They must buy new
machines for the manufacturing process. It may be expensive, but it can operate and last longer.
The maintenance of the old machines will cost too much. That is why it is more efficient to buy
new machines. Machines may help also to decrease man-labor in the manufacturing process.
There is no need to hire more workers because it will just add expenses to the company.
B. Byte Products Inc. can licensed their products and process technology to other manufacturers
since it would only run for a short- term. While waiting for a new plant to finish, the company
can take this option since the proposed plant can be made for an estimate of three years. There
would be no gaps in their operation since they are making products To other manufacturers. The
problem with this action is that any manufacturer would charge a higher amount for doing this
operation. This causes a higher price to the product that would seem inefficient to the customers'
unacceptable price.