4. Suppose TGLs agreement included the option of paying a $10,000 penalty if the company cannot supply at least 90% of each distributors order but instead supply at least 80% of each distributors order. Comment of the pros and cons of TGL exercising this option.

Iapter Review se 3-1 Putting the Link in the Supply Chain Adrian is the new Vice President for operations at The Golfer's Link (TGL), a company specializing in the production of quality, discount sets of golf clubs. Adrian was hired primarily because of his expertise in supply chain management (SCM). SCM is the integrated planning and control of all resources in the logistics process from the acquisition of raw materials to the delivery of finished products to the end user. While SCM seeks to optimize all activities in the supply chain including transactions between firms, Adrian's first priority is ensuring that all aspects of production and distribution within TGL are operating optimally. TGL produces three different lines of golf clubs for men, women, and junior golfers at manufacturing plants in Daytona Beach, FL; Memphis, TN; and Tempe, AZ. The plant in Tempe produces all three lines of clubs while the one in Daytona only produces Men's and Women's lines, and the plant in Memphis only produces the Women's and Junior's lines. Each line of clubs requires varying amounts of three raw materials that are sometimes in short supply: titanium, aluminum, and a distinctive rock maple wood that TGL uses in all of its drivers. The manufacturing process for each line of clubs at each plant is identical. Thus, the amount of each of these materials required in each set of the different lines of clubs is summarized in the following table: The estimated amount of each of these key resources avallable at each plant during the coming month is given as: mirh. mantint