![]() PWI currently has a specialized inventory because the steel rings that they produced were made from a unique type of steel. The sale and distribution of the plastic rings should begin immediately after to all of their branches so that way PWI can start earning profits as quickly as possible. immediately start producing the plastic rings that were created by Bodo Eisenbach and halt the production of the steel rings. I would recommend that Precision Worldwide, Inc. He also has to come to a decision regarding the materials that have been obtained for inventory but PWI did not have the chance to actually process them before the change was made.īefore Thorborg can make a decision, there are three main factors that need to be taken into consideration: the opportunity costs, the product substitution, and sunken costs. Hans Thorborg, the General Manager, faces a predicament with how to deal with their existing and the in process inventory. must make can essentially “make or break” them. APPENDIX: The choice that Precision Worldwide, Inc. Plastic rings are also more durable than their steel counterparts and ultimately a better product overall. 65, it becomes more evident why PWI should switch their product line. When that is compared to creating a hundred plastic rings, which only costs $279. 25 more in profit than the sale of 100 steel rings. RESULTS: When PWI sells 100 plastic rings, they are expected to make $838. With this new product offering, PWI will be able to acquire new clientele across the globe and still be able to maintain the loyalty of their existing patrons. The remaining 15,100 steel rings will have to be calculated as a sunk cost. Order custom essay Precision Worldwide, Inc Havard Case Study
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