Windmill Battery Pty Ltd

Windmill Battery (WB) is a medium family-owned business that is developing and manufacturing conversion kits to change cars from being fuelled by fossil fuel to being powered by batteries. The business started out of Nellies garage in 2015 where she began tinkering with small motored appliances such as lawn mowers and mobility scooters while working as a sales representative for a solar power company. In 2016, Nellie resigned from her sales job and put all her efforts into converting cars. Nellie achieved great success in a short period of time because of her knowledge and perfection in converting cars over.

Nellie was unable to keep up with demand and at the end of 2019 purchased the former Toyota Altona site where she could expand the business to customise and manufacture car battery conversions. Nellie had started to heavily recruit employees ranging from mechanics to engineers who could assist with the conversion. Just as she was starting to have everything operational, COVID hit resulting in Nellie having to lay off 70 out of 100 workers.

Business Strategy

WB aims to be a leading business in converting fossil-fuelled cars to battery-powered in Australia and, plans to achieve this by:

Being the leading designer in conversion kits;

Sourcing the highest quality batteries and parts while using only the finest materials;

Applying the latest sustainable and environmental practices;

Maintaining a work environment that is respectful and responsible towards employees while promoting women in the car industry;

By investing in research and adopting the latest technology.

Operations, Performance and accolades

WB purchased the former Toyota Altona hydrogen site in late 2019 after 6 gruelling months of negotiations. Nellie saw the opportunity to use parts of the existing car manufacturing plant in converting cars over to battery-powered. Upon receiving the keys to the former plan it was not long after that a series of lockdowns were imposed on Victoria.

Now its July 2022 and Nellie is ready to forward her business plan to convert 10,000 cars by the end of 2022. The majority of the conversion equipment is in either good operating order or specifically commissioned for WB.

Demand Trends

The demand for the conversion kits has exceeded all expectations with over 12,000 cars booked in to be converted and a growing waiting list established for 2023. This has left several potential customers disgruntled by the wait time who are now seeking alternate places to have the conversion completed.

Management

Nellie was filling the roles of director and general manager and found she was unable to keep up with these demands, as well as feeling out of her depth. Nellie wants to focus on leading the research side of the business rather than the management. An employment agency was contacted in February 2022 to employ several executives to fulfil this growing role. Since March 2022, a general manager, financial controller, and human resource manager have been employed. Very recently an operations manager was employed. While they are all very experienced, none of the new appointments have any background in the motor or renewable energy industries.

Competitive advantage

WB is constantly struggling to keep inferior manufacturers from copying and claiming that they have the technology and knowledge to be able to convert cars. WB is in the process of suing 2 smaller companies for making such claims. It is unlikely that WB will win, but Nellie is still persisting with the matter.

Question Payoff Matrix

WB has decided to investigate buying an automated machine to increase the production capacity. The benefit will depend upon the size of the machine and demand for conversion taking into consideration a change in the federal government and with that a decrease in emissions. Nellie was provided with the following table from an automotive consultant indicating demand and level of profit:

	Strong Demand	Medium Demand	Weak Demand
Minor levels of automation	22,500	9,000	(4,500)
Medium level of automation	62,400	23,400	(15,600)
Highly automated	85,000	25,500	(34,000)
Fully automated	135,000	18,750	(72,000)

Required:

Using Excel create a decision table to calculate and identify the following:

1. What option would a maximax select? (4 marks)

2. What option would a maximin select? (4 marks)

3. What option would a minimax select? (4 marks)

4. If the options are equally likely, what would be selected? (4 marks)

5. Prepare a one page memo and discuss the ethical concerns that a decision-maker should take into consideration when deciding what course of action to take. drawing on the results above. (5 marks)