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  • Precision Worldwide: Group Members: Adityanarayanan Iyer Neeraj Arora Ritu Mathur Rajan Kumar Subhranshu Sekhar

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    The document presents three options for a company currently producing steel rings as to whether they should transition production to plastic rings or continue steel ring production. Option 1 is to continue steel ring production until current inventory and raw materials are depleted, with an expected profit of $108,476 but high risk of losing market share. Option 2 is to begin plastic ring production while selling remaining steel inventory, with an expected profit of $117,550 and moderate risk. Option 3 is to fully convert to plastic ring production, with the lowest risk but highest inventory holding costs and an expected profit of $121,020. The document recommends clearing steel inventory where competitors are absent, launching plastic rings where competitors have plastic options, and disposing of remaining steel raw

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    Group 3_Precision Worldwide

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    The document presents three options for a company currently producing steel rings as to whether they should transition production to plastic rings or continue steel ring production. Option 1 is to continue steel ring production until current inventory and raw materials are depleted, with an expected profit of $108,476 but high risk of losing market share. Option 2 is to begin plastic ring production while selling remaining steel inventory, with an expected profit of $117,550 and moderate risk. Option 3 is to fully convert to plastic ring production, with the lowest risk but highest inventory holding costs and an expected profit of $121,020. The document recommends clearing steel inventory where competitors are absent, launching plastic rings where competitors have plastic options, and disposing of remaining steel raw

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    6 Ansichten5 Seiten

    Precision Worldwide: Group Members: Adityanarayanan Iyer Neeraj Arora Ritu Mathur Rajan Kumar Subhranshu Sekhar

    Hochgeladen von

    vsyoi
    The document presents three options for a company currently producing steel rings as to whether they should transition production to plastic rings or continue steel ring production. Option 1 is to continue steel ring production until current inventory and raw materials are depleted, with an expected profit of $108,476 but high risk of losing market share. Option 2 is to begin plastic ring production while selling remaining steel inventory, with an expected profit of $117,550 and moderate risk. Option 3 is to fully convert to plastic ring production, with the lowest risk but highest inventory holding costs and an expected profit of $121,020. The document recommends clearing steel inventory where competitors are absent, launching plastic rings where competitors have plastic options, and disposing of remaining steel raw

    Copyright:

    © All Rights Reserved
    Als PPTX, PDF, TXT herunterladen oder online auf Scribd lesen
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    von 5

    Precision Worldwide

    Group Members:
    Adityanarayanan Iyer
    Neeraj Arora
    Ritu Mathur
    Rajan Kumar
    Subhranshu Sekhar
    Dilemma?

    Whether to sell steel rings or plastic rings?


    Option 1 Option 2 Option 3

    Description Produce and sell only Convert to plastic Convert to 100 %


    steel rings till inventory production and sell plastic ring production
    and RM last steel ring inventory

    Expected Profit 108476 117550 121020

    Timeline Mid Sep 2004-Mid-Jan Mid Sep 2004-Mid-Jan Mid Sep 2004-Mid-Jan
    -2006 -2006 -2006

    Risk High risk as market Moderate risk as Low risk but high
    share will be eroded. plastic will be inventory on books.
    introduced in 4-5
    months.
    What should Thorborg do?
    Clear out steel rings inventory where competitors are not present.
    Launch Plastic rings where competitors have launched same.
    Dispose steel raw material as scrap.
    Thank You

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