The net profit margins of the company has fallen from 10% in 2019 to 8% in 2020 owing to rise in raw material & repair cost. Another significant rise in the cost was on account of repairs of mobiles which are under warranty.There was an increase in these repair costs by `1.5 crores which represents 1% of the total turnover of the company.The management plans to continue to operate in this segment to maintain its market presence. At the same time, to sustain business in the long term, the management of Staywell Hotels now wants to foray into developing properties for luxury resorts. Target guest segment are vacationing tourists interested in enjoying a lai d-back time in scenic places. Price wars have put pressure on profit margins in this segment. A key issue highlighted by plant supervisors is that the scheduled maintenance activity for plants was never carried out. The underlying assumption for not carrying out such maintenance activity was - Since the plant is running smoothly, there is no requirement of preventive maintenance activity. Such activities cost a lot in terms of money and also cause loss of productive time which could otherwise be used for production. The maintenance departments and production department functioned in silos with almost no co-ordination amongst themselves. The most critical parts of the plant were not maintained for a long time.As a lecturer for Business Excellence where you are giving a lecture on Sustaining Business Excellence. The management plans to continue to operate in this segment to maintain its market presence. At the same time, to sustain business in the long term, the management of Staywell Hotels now wants to foray into developing properties for luxury resorts. Target guest segment are vacationing tourists interested in enjoying a lai d-back time in scenic places. These guests would not mind paying premium for availing good quality service.The pattern of warranty claim must be analysed to understand whether there is certain common problem related to repair claims. If the issue has some relation with parts used in mobile, the issue can be taken up with supplier of such parts. The net profit margins of the company has fallen from 10% in 2019 to 8% in 2020 owing to rise in raw material & repair cost. Another significant rise in the cost was on account of repairs of mobiles which are under warranty.There was an increase in these repair costs by `1.5 crores which represents 1% of the total turnover of the company. The most critical parts of the plant were not maintained for a long time.As a lecturer for Business Excellence where you are giving a lecture on Sustaining Business Excellence. A manufacturer of a fashion clothing line is one of the participants at the symposium. He has the following query:Outsourcing these services to well established vendors is advantageous since the focus can remain on improving guest experience. It may also be cost advantageous in many cases. However, there are a number of risks in this model. There was an increase in these repair costs by `1.5 crores which represents 1% of the total turnover of the company. Detailed service level agreements need to be drawn up to ensure that the required quality of service is being provided. Staywell Hotels should be able to monitor the performance of these vendors. In cases of non-delivery of the required level of service, the agreement should provide for means of redressal. This could vary from compensation for any loss in business to immediate termination of service. The pattern of warranty claim must be analysed to understand whether there is certain common problem related to repair claims. If the issue has some relation with parts used in mobile, the issue can be taken up with supplier of such parts. The net profit margins of the company has fallen from 10% in 2019 to 8% in 2020 owing to rise in raw material & repair cost. Another significant rise in the cost was on account of repairs of mobiles which are under warranty. These guests would not mind paying premium for availing good quality service. The chairman of the company convened an urgent meeting of the Board of Directors to understand the impact and reasons of the situation at production plants. A key issue highlighted by plant supervisors is that the scheduled maintenance activity for plants was never carried out. The pattern of warranty claim must be analysed to understand whether there is certain common problem related to repair claims. If the issue has some relation with parts used in mobile, the issue can be taken up with supplier of such parts. The net profit margins of the company has fallen from 10% in 2019 to 8% in 2020 owing to rise in raw material & repair cost. Another significant rise in the cost was on account of repairs of mobiles which are under warranty.There was an increase in these repair costs by `1.5 crores which represents 1% of the total turnover of the company. This business model has been profitable since its establishment. Staywell Hotels has a sizeable market share in this segment. Competition has increased in the recent past.