Could CNL be a viable business?If so, under what conditions and what level of production (and, since production is directly related to production workers, employees)?

Comfort Now LA (CNL) was a small business that manufactured bleacher seat pads that sports fans or picnickers could use to make wooden outdoor seating (or even convenient rocks) a bit warmer and more comfortable. The primary markets for CNL's product were college bookstores (to be sold to students and alumni) and specialty advertising rms (for use as corporate give-a-ways). The rm was organized in the second half of 2001 and began selling products in 2002. CNL had a policy of providing an annual \"cost of living\" increase for its assembly workers to maintain a constant annual cost of $25,000 per worker (1984 dollars). The production process requires one worker for every sixteen tons manufactured. As of January 2005, up to ten of the assembly workers were provided by a local Sheltered Workshop facility (a facility that provided and supervised disabled workers for product assembly and piece-work). This facility also rented the necessary manufacturing space to CNL. Nationwide Horizon Enterprises, a local manufacturing conglomerate with some excess capacity, provided the remaining workers and production space when more than ten disabled workers were required. Nationwide Horizon was also paid $25,000 (ination-adjusted) apiece for its workers plus an additional fee for the rental of equipment and space. In addition to manufacturing labor, CNL employed a clerical worker and a general manager but no sales staff. Through December 2005, sales were generated primarily by manufacturer's representatives whoreceived a standard 5% of sales as their commission. In January 2005, Nationwide Horizon Enterprises purchased CNL. Nationwide Horizon's managementteam immediately began supplementing sales efforts by adding the CNL products to their own manufacturer's representatives lines. Otherwise, they operated CNL without signicant changes. The Nationwide Horizon Enterprises managers soon found that while sales were growing, prots were shrinking. The management responded for the second half of 2005 by increasing the commission to theirmanufacturer's representatives from 5% to 6%. The salesforce responded quickly and sales boomed. By July 2006, Nationwide Horizon's board of directors exprest some concern to management. Eventhough sales were up, the deal was not proving to be protable. At the end of July 2006, the board of directors was informed that Nationwide Horizon's management team had decided to reduce CNL'sproduction staff by letting go of those employees provided by the Sheltered Work Facility. It is now in autumn 2007. Nationwide Horizon has been sued by a noted civil rights attorney claiming that closing down the Sheltered Work Facility manufacturing operation was a wrongful termination of the workers in the Sheltered Work Facility. Her court lings say that there was no valid business reason for selecting the disabled workers for layoff rather than the nondisabled workers; in part, the court lings claim that the layoff was wrongful because there was no economic justication for dismissing these workers who had been at least as productive, and protable, as their non-disabled counterparts for so many years. The attorney claimed that this was obvious discrimination against the disabled and because of the discrimination, her ten clients will be unemployed for an average of 20 years each. The attorney is asking the court for a verdict of $20,000,000 as an appropriate award to her ten clients if she prevails in her action. She estimated this gure by computing 20 years it 10 clients 7: $25,000 = $5,000,000, doubling it to account for her fees, then doubling that to account for future ination. Required You have been hired by Nationwide Horizon's board of directors to help their attorney (and them)evaluate the claims in the lawsuit and determine whether the management team made the right decision. You have been asked to consider the following specific questions in preparing a report: (Use the guidelines for preparing a report on the course website.) You remember 'om your Business School days the following concepts that you think might be useful here: TABLE 1 zen: III 2002 1h 2m: 2h zoos 1h 2003 an 2004 lb 2004 In 2005 1h \"mm zonszh 275 2.002 3.554 97130313 988.973 zoos lb 235 2.003 3.533 mantam