The Marsden Aviation Company, with annual sales of $$600$ million, is a leading supplier of mechanical subsystems to the aviation industry. The firm is in a highly competitive industry, being one of four firms that supply approximately $80$ percent of all mechanical subsystems to aircraft manufacturers. Typically, Marsden receives a functional or performance specification from an aircraft manufacturer for a subsystem or component from which it designs the required item or subsystem. Due to the cyclical nature of the aviation industry, Marsden frequently subcontracts for the manufacture of items, which are then assembled in its own plants.

Recently, Marsden received a follow$-$on order for $100$ landing gears. The initial order had been for $50$ landing gears. delivery of which was completed three months ago. As a result of heavy plant loading, and following a review by the Marsden make$-$or$-$buy committee, it has been decided to have the machining of the aluminum outer cylinder struts subcontracted, using aluminum ingots supplied by Marsden.

The procurement has been assigned to Mr$.$ Hitchcock of the supply department. Mr$.$ Hitchcock has sent requests for proposals $($RFP$)$ to a number of qualified suppliers. Copies of the design specification accompanied the RFP$.$ The RFP calls for a delivery schedule to commence six months after award of the contract. Initial deliveries are to be scheduled for two struts per month, with subsequent delivery quantities increasing until all units are delivered over a period of thirty$-$nine months.