Case Study Essay examples

1119 Words May 10th, 2013 5 Pages
Case Study: Westover Electrical, Inc.
Westover Electrical, Inc., is a medium-size Houston manufacturer of wire windings used in making electric motors. Joe Wilson, VP operations, has experienced an increasing problem with rejected product found during the manufacturing operation. "I’m not sure where to begin," admitted Joe at the weekly meeting with his boss. "Rejects in the Winding Department have been killing us the past two months. Nobody in operations has any idea why. I have just brought in a consultant, Roger Gagnon, to take a look at the situation and make recommendations about how we can find out what is going on. I don’t expect Roger to make technical recommendations–just see if he can point us in the right direction."
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This time he needs a guaranteed revenue stream to help fuel the stadium expansion. One source of income could easily be the high-profit game programs. Selling for $5 each, programs are a tricky business. Under substantial pressure from Wisner, Maddux knows he has to ensure that costs are held to a minimum and contribution to the new expansion maximized. As a result, Maddux wants the programs for each game to be purchased economically. His inquiries have yielded two options. A local Stephenville printer, Sam Taylor of Quality Printing, has offered the following discount schedule for the programs and game inserts:
As a second option, however, First Printing, owned by Michael Shader, an S.W.U. alumnus in Ft. Worth, will do the job for 10% less as a favor to help the athletic department. This option will mean sending a truck to Ft. Worth to pick up each order. Maddux estimates that the cost of each trip to Ft. Worth will be $200. Maddux figures that the university’s ordering/check-writing cost is about $100. His carrying cost is high because he lacks a good place to store the programs. He can’t put them in the office, or store them down in the maintenance department, where they may get dirty and damaged. This means he will need to lease space in a storage area off-campus and transport them to and from the campus. He estimates annual holding costs at 50%. Maddux’s other major problem is he is never sure what the demand for programs will be. Sales vary

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