A violent epidemic rapidly spreading across the world, the AIDS virus has forced doctors and healthcare professionals alike to take extensive measures when handling anything possibly contaminated. Furthermore, the Halsey Health Products line of sharps disposal containers are a necessity for hospitals across the country making up an annual market demand of 109 million containers sold. Dealing with such a potentially dangerous threat of infection the strength and reliability of sharps containers must surpass any federal standards and should be able to withstand all conditions. In addition, the integrity of this product is a key factor for the Halsey Corporation as it comprises a significant share of the targeted $900 million in sales.
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The well-being of hundreds of millions of people is a major factor in this situation, as a faulty container could be the direct cause of HIV infection of an innocent hospital worker. The senior market manager is a part of a fast pace hierarchy of management where a bad decision often defines one’s future in the corporate environment. The wrong decision, affecting the company or the customer, will diminish future possibilities of employment.
The option of improving the product quality produces various other consequences that may affect profit performance and all the other strongly emphasized corporate goals expressed by the Halsey Health Products management. The direct consequence of changing the product is the risk of missing profit goals. Changing the sharps container molds incurs a 7% additional cost in materials as more plastic would be required to create a stronger container. The cost to change the molds amounts to about $400,000 for all sixteen molds. Also, a four month inventory of sharps disposal containers has been produced. This represents a $7,200,000 product write off if the containers must be replaced with a more durable mold. From a market manager standpoint this represents a significant operating cost which may threaten revenue goals. Altering normal production of sharps container will create additional expenses for Halsey but is crucial for the integrity and reputation of the product and the future of the company.