Reference no: EM133102685

Company A is developed in early 2016 with its own unique design for making Laser Scanners with relatively new technology that was growing fairly rapidly in interest and in competitors. The founder of the company had started by using his engineering skills as an individual investor, but with some borrowed money he was able to set up a small production facility. Now that he had been in the business for four years, he noticed that near the end of his fiscal year, he was likely to sell more than 35 scanners. He only had three other people on his management staff: the financial officer, the production manager, and the marketing and sales manager.

CEO point of view:

During recent monthly planning meeting, the CEO mentioned that they are gaining a good reputation in a market that is growing rapidly, given that it is in the early stages of the life cycle.

Marketing and sales manager point of view:

Not only do several of the original customers plan on buying another scanner, but they have also told other potential customers that they like the specific design and embedded technology, and some of those potential customers are likely to buy as well. It is approximated that their sales next year to possibly 60 or more scanners.

Production manager point of view:

She believes that they need to hold back on making sales since they are already finding it tough to deliver on promises for this year. She believes that the workers agreed to work on some weekends, but it will not going to be the same promises to that next year. While they like the extra money, they all have families and don't want to spend that much time away from home. From her point of view, the only way they can really expand to sell and make 60 scanners next year is to hire a lot more people because if they continue putting more pressure on the current employees, they are skilled people who are making most of these scanners in a somewhat unique design based on the specific needs of the customer. Skilled people like that often have several options as to where to work, and most of them would not like to work a second shift where they could not spend evenings with their families. They could try to double the number of workers on the regular day shift, but that would mean duplicating all the current equipment as well. Also, while today they probably have the space in their facility to fit duplicate equipment, if they grow more the following year they will also have to expand their space requirements.

Financial manager point of view:

He believes that after four years they are finally looking a little better financially, but adding a whole lot more people and equipment is going to cost a lot. Also, given that each customer specifies at least some unique aspect of design based on their individual needs, and also it takes a fair amount of time to build them, that means they get to see the money from the sale only after many weeks after the order is placed, but in the meantime, they have to obtain materials and pay workers for today's new orders-which are larger in number in this growing market. This implies that even though the profit per unit is good, they have a struggle with cash flow.

Discussion Topic:

• Try to help the management team out. After listing the key issues and characteristics of the environment and the problem, list all the possible alternative approaches they could take to deal with the issues (consider adding a few people (employees) to the team as one alternative).
• For each alternative, try to list the pros and cons likely involved.
• Then select an approach you would recommend and attempt to justify it.