6:25 chegg.com Case 11-2 McMichael Inc. Art Flynn, packaging buyer for McMichael Inc. (M. own molding shop working on an import substitution project involving a local contract, a situatie minority supplier. He was concerned, however, that his of acquiring more forts would be fruitless because his oogial proposal had with Mr's aineen been flatly rejected by the plant manager as too expensive. design for the cream McMichael Inc. a medium-sized company, had over the gestions for years specialized in prescription sinceput, mar was $56.000 ket niche in which it had developed an excellent reputation. Lietoth About three years ago, afer extensive testing, MI had intro Bert Woods duced a new facial cream in a special package that allowed chases of for precise measurement of the quantity dispered The container, manufactured by a French firm for a different ap mitted to plication was fairly expensive Man FOB MI's factory cost of $0.16. What concerned Art Flynn even more however, Resin were the quality and delivery problems encountered Com Labor motications with the manufacturer were difficult and Ant Overhead had the impression the manufacturer did som to cart much about MI's business, which, Art knew, was only mall proportion of their total volume produced With the cooperation of MI's marketing engineer Ing, productions, and quality control pennel, Ant had found a local minority supplier who appeared capable of meeting Mi's requirements. This custom melding firm, OSA Inc. was owned by Ben Wood, a bright engineer who had purchased the firm several years earlier when the previous owner wished to retire. OSA Inc. had Wheet we tool and die manufacturing operation as well as treasurer both turned it down, arguing that the 24-month pay The scheduling back on the mold was far too long and that the company had modified MRP systes better investment opportunities with a 12-month payback age idea with them. Art was disappointed, because he had hoped this proj and the older ect would assist in helping him meet his savings target al package fequit for the year. When he talked the idea over with his man make that ager, Louise Moffat, she suggested he give it another try casily be adjusted to She said. "I am sure that if you can get the mold pay Art al discussed back down to 15 months, you will get a warmer reception who indicated that his There are not that many deals around this company that on the line of 0.0% pay for themselves in one year." She also suggested that los would fall into a Art talk to marketing to see if some other products could than the originally got use the same packaging, and to the production scheduling Art werd roup to check if different production quantities could be tion would have ordered Bert Wood had been ad When An talked to the marketing people, he found Woodlandsailk out that the package was ideal for another product to be plier. But I don't was introduced shortly and with an annual demand estimated special fees from at 100,000 units Marketing had been uncay about using position to make special the French package because of the difficulties encoubt what I side tered with it and assured Art that if he could get a reliable to buy this com domestic source, this option would be highly attractive Show transcribed image text 6:26 chegg.com fichael Inc. (MI) was own molding shop. It depended heavily on motive oject involving a local contracts, a situation Bert Wood wished to correct by however, that his equiring more atomotive business. In conjunctie eiginal proposal had with MI's engineers, Bert Wood had worked out a mold er as too expensive design for the cream dispenser and included several company, had over the gestions for minor improvement. The cost of the mold care products, a murwa 556.000, an investment Bert Wood was in pol n excellent reputation tion to make and that I would have to worp from testing, MI had intro Bert Wood quoted a unit price of $027hased our package that allowed chase quantities of 30,000 unitat a time antity dispersed The volume estimated at 100.000 unit. Bert Woodhad fin for a different ap mitted a cost down of this quotes fotos OB MI's factory out CVC more however, Resin schuntered. Com Labor 3 Yere difficult and Ant Overhead BC did not seem to care 276 Ant know, was only a produced marketing engineer pernel, Art hat appeared capable of som molding firm. id, a bright engineer w year earlier when OSA In hadits 166 that the 24-month pay The scheduling group for a number of years old I that the company had modified MRP system. When An discussed the 12-month payback age idea with them, they told him that if the had hoped this proje and the older one were to be packaged in the same et his savings target a total package requirement of about 10.000 a over with his man make sense and that the master production schedule he give it another try casily be adjusted to run the two products in get the mold pay Art also discussed the situation with the ta warmer reception who indicated that his quote to Bert Wood had been nd this company that on the lot size of 30,000 packages, but that a 20.000 e also suggested that lot would fall into a new price bracket percent other products could than the originally quoted price roduction scheduling Art wondered just what effect all of this info in quantities could be tion would have on his original proposal. He knew Bert Wood had been adamant how his $0.27 ng people, he found Woodhad said. "1 know I am classified as a nother product to be plier. But I don't want to hide behind that fast. It al demand estimated special fines from any of my customers. Nomi a uneasy about using position to make special gifts to anyone else. The difficulties encoun borrow at what I consider to be ridiculously high e could get a reliable rates to hay this company. Now I have to make e highly attractive My SO 27 price is as low as I can as far as axt 3. What is the quantitative analysis in this situation? 7. Should supply bonuses be paid on the basis of savings targets? Explain 6:25 chegg.com Case 11-2 McMichael Inc. Art Flynn, packaging buyer for McMichael Inc. (M. own molding shop working on an import substitution project involving a local contract, a situatie minority supplier. He was concerned, however, that his of acquiring more forts would be fruitless because his oogial proposal had with Mr's aineen been flatly rejected by the plant manager as too expensive. design for the cream McMichael Inc. a medium-sized company, had over the gestions for years specialized in prescription sinceput, mar was $56.000 ket niche in which it had developed an excellent reputation. Lietoth About three years ago, afer extensive testing, MI had intro Bert Woods duced a new facial cream in a special package that allowed chases of for precise measurement of the quantity dispered The container, manufactured by a French firm for a different ap mitted to plication was fairly expensive Man FOB MI's factory cost of $0.16. What concerned Art Flynn even more however, Resin were the quality and delivery problems encountered Com Labor motications with the manufacturer were difficult and Ant Overhead had the impression the manufacturer did som to cart much about MI's business, which, Art knew, was only mall proportion of their total volume produced With the cooperation of MI's marketing engineer Ing, productions, and quality control pennel, Ant had found a local minority supplier who appeared capable of meeting Mi's requirements. This custom melding firm, OSA Inc. was owned by Ben Wood, a bright engineer who had purchased the firm several years earlier when the previous owner wished to retire. OSA Inc. had Wheet we tool and die manufacturing operation as well as treasurer both turned it down, arguing that the 24-month pay The scheduling back on the mold was far too long and that the company had modified MRP systes better investment opportunities with a 12-month payback age idea with them. Art was disappointed, because he had hoped this proj and the older ect would assist in helping him meet his savings target al package fequit for the year. When he talked the idea over with his man make that ager, Louise Moffat, she suggested he give it another try casily be adjusted to She said. "I am sure that if you can get the mold pay Art al discussed back down to 15 months, you will get a warmer reception who indicated that his There are not that many deals around this company that on the line of 0.0% pay for themselves in one year." She also suggested that los would fall into a Art talk to marketing to see if some other products could than the originally got use the same packaging, and to the production scheduling Art werd roup to check if different production quantities could be tion would have ordered Bert Wood had been ad When An talked to the marketing people, he found Woodlandsailk out that the package was ideal for another product to be plier. But I don't was introduced shortly and with an annual demand estimated special fees from at 100,000 units Marketing had been uncay about using position to make special the French package because of the difficulties encoubt what I side tered with it and assured Art that if he could get a reliable to buy this com domestic source, this option would be highly attractive Show transcribed image text 6:25 chegg.com Case 11-2 McMichael Inc. Art Flynn, packaging buyer for McMichael Inc. (M. own molding shop working on an import substitution project involving a local contract, a situatie minority supplier. He was concerned, however, that his of acquiring more forts would be fruitless because his oogial proposal had with Mr's aineen been flatly rejected by the plant manager as too expensive. design for the cream McMichael Inc. a medium-sized company, had over the gestions for years specialized in prescription sinceput, mar was $56.000 ket niche in which it had developed an excellent reputation. Lietoth About three years ago, afer extensive testing, MI had intro Bert Woods duced a new facial cream in a special package that allowed chases of for precise measurement of the quantity dispered The container, manufactured by a French firm for a different ap mitted to plication was fairly expensive Man FOB MI's factory cost of $0.16. What concerned Art Flynn even more however, Resin were the quality and delivery problems encountered Com Labor motications with the manufacturer were difficult and Ant Overhead had the impression the manufacturer did som to cart much about MI's business, which, Art knew, was only mall proportion of their total volume produced With the cooperation of MI's marketing engineer Ing, productions, and quality control pennel, Ant had found a local minority supplier who appeared capable of meeting Mi's requirements. This custom melding firm, OSA Inc. was owned by Ben Wood, a bright engineer who had purchased the firm several years earlier when the previous owner wished to retire. OSA Inc. had Wheet we tool and die manufacturing operation as well as treasurer both turned it down, arguing that the 24-month pay The scheduling back on the mold was far too long and that the company had modified MRP systes better investment opportunities with a 12-month payback age idea with them. Art was disappointed, because he had hoped this proj and the older ect would assist in helping him meet his savings target al package fequit for the year. When he talked the idea over with his man make that ager, Louise Moffat, she suggested he give it another try casily be adjusted to She said. "I am sure that if you can get the mold pay Art al discussed back down to 15 months, you will get a warmer reception who indicated that his There are not that many deals around this company that on the line of 0.0% pay for themselves in one year." She also suggested that los would fall into a Art talk to marketing to see if some other products could than the originally got use the same packaging, and to the production scheduling Art werd roup to check if different production quantities could be tion would have ordered Bert Wood had been ad When An talked to the marketing people, he found Woodlandsailk out that the package was ideal for another product to be plier. But I don't was introduced shortly and with an annual demand estimated special fees from at 100,000 units Marketing had been uncay about using position to make special the French package because of the difficulties encoubt what I side tered with it and assured Art that if he could get a reliable to buy this com domestic source, this option would be highly attractive Show transcribed image text 6:26 chegg.com fichael Inc. (MI) was own molding shop. It depended heavily on motive oject involving a local contracts, a situation Bert Wood wished to correct by however, that his equiring more atomotive business. In conjunctie eiginal proposal had with MI's engineers, Bert Wood had worked out a mold er as too expensive design for the cream dispenser and included several company, had over the gestions for minor improvement. The cost of the mold care products, a murwa 556.000, an investment Bert Wood was in pol n excellent reputation tion to make and that I would have to worp from testing, MI had intro Bert Wood quoted a unit price of $027hased our package that allowed chase quantities of 30,000 unitat a time antity dispersed The volume estimated at 100.000 unit. Bert Woodhad fin for a different ap mitted a cost down of this quotes fotos OB MI's factory out CVC more however, Resin schuntered. Com Labor 3 Yere difficult and Ant Overhead BC did not seem to care 276 Ant know, was only a produced marketing engineer pernel, Art hat appeared capable of som molding firm. id, a bright engineer w year earlier when OSA In hadits 166 that the 24-month pay The scheduling group for a number of years old I that the company had modified MRP system. When An discussed the 12-month payback age idea with them, they told him that if the had hoped this proje and the older one were to be packaged in the same et his savings target a total package requirement of about 10.000 a over with his man make sense and that the master production schedule he give it another try casily be adjusted to run the two products in get the mold pay Art also discussed the situation with the ta warmer reception who indicated that his quote to Bert Wood had been nd this company that on the lot size of 30,000 packages, but that a 20.000 e also suggested that lot would fall into a new price bracket percent other products could than the originally quoted price roduction scheduling Art wondered just what effect all of this info in quantities could be tion would have on his original proposal. He knew Bert Wood had been adamant how his $0.27 ng people, he found Woodhad said. "1 know I am classified as a nother product to be plier. But I don't want to hide behind that fast. It al demand estimated special fines from any of my customers. Nomi a uneasy about using position to make special gifts to anyone else. The difficulties encoun borrow at what I consider to be ridiculously high e could get a reliable rates to hay this company. Now I have to make e highly attractive My SO 27 price is as low as I can as far as axt 3. What is the quantitative analysis in this situation? 7. Should supply bonuses be paid on the basis of savings targets? Explain 6:25 chegg.com Case 11-2 McMichael Inc. Art Flynn, packaging buyer for McMichael Inc. (M. own molding shop working on an import substitution project involving a local contract, a situatie minority supplier. He was concerned, however, that his of acquiring more forts would be fruitless because his oogial proposal had with Mr's aineen been flatly rejected by the plant manager as too expensive. design for the cream McMichael Inc. a medium-sized company, had over the gestions for years specialized in prescription sinceput, mar was $56.000 ket niche in which it had developed an excellent reputation. Lietoth About three years ago, afer extensive testing, MI had intro Bert Woods duced a new facial cream in a special package that allowed chases of for precise measurement of the quantity dispered The container, manufactured by a French firm for a different ap mitted to plication was fairly expensive Man FOB MI's factory cost of $0.16. What concerned Art Flynn even more however, Resin were the quality and delivery problems encountered Com Labor motications with the manufacturer were difficult and Ant Overhead had the impression the manufacturer did som to cart much about MI's business, which, Art knew, was only mall proportion of their total volume produced With the cooperation of MI's marketing engineer Ing, productions, and quality control pennel, Ant had found a local minority supplier who appeared capable of meeting Mi's requirements. This custom melding firm, OSA Inc. was owned by Ben Wood, a bright engineer who had purchased the firm several years earlier when the previous owner wished to retire. OSA Inc. had Wheet we tool and die manufacturing operation as well as treasurer both turned it down, arguing that the 24-month pay The scheduling back on the mold was far too long and that the company had modified MRP systes better investment opportunities with a 12-month payback age idea with them. Art was disappointed, because he had hoped this proj and the older ect would assist in helping him meet his savings target al package fequit for the year. When he talked the idea over with his man make that ager, Louise Moffat, she suggested he give it another try casily be adjusted to She said. "I am sure that if you can get the mold pay Art al discussed back down to 15 months, you will get a warmer reception who indicated that his There are not that many deals around this company that on the line of 0.0% pay for themselves in one year." She also suggested that los would fall into a Art talk to marketing to see if some other products could than the originally got use the same packaging, and to the production scheduling Art werd roup to check if different production quantities could be tion would have ordered Bert Wood had been ad When An talked to the marketing people, he found Woodlandsailk out that the package was ideal for another product to be plier. But I don't was introduced shortly and with an annual demand estimated special fees from at 100,000 units Marketing had been uncay about using position to make special the French package because of the difficulties encoubt what I side tered with it and assured Art that if he could get a reliable to buy this com domestic source, this option would be highly attractive Show transcribed image text