Your management consulting team has just been hired by Technocron International, a rapidly

growing producer of electronic surveillance devices that are sold to commercial and government

end users. Some sales are made through direct selling, and some through industrial resellers.

Direct$-$sale profits are being hurt by what seem to be exorbitant expenses paid to a few of the

salespeople, especially those who fly all over the world in patterns that suggest little planning

and control.

There is trouble among the resellers because standard contracts have not been established, and

each reseller has an entirely different contractual relationship. Repayment schedules vary widely

from customer to customer. Also, profits are reduced by the need to customize most orders,

making masp production almost impossible. However, no effort has been made to create

interchangeable components. There are also tremendous inventory problems. Some raw materials

and parts are bought in such small quantities that new orders are being placed almost daily. Other

orders are so large that there is hardly room to store everything. Many of these purchased