Reference no: EM132262130
Here’s a case about Ranek, Inc. What actions to you recommend that Marcia take?
“Those WR93 castings you ordered from Roberts are no good, Marsha. They are too short by a substantial margin, so I have no choice but to reject the whole batch. What do you want me to do with the?”
“Just hold on to them for a while, Frank, ‘til I find out what’s going on here. I will get back to you shortly.”
Marsha Dinsmore, buyer at Ranek, Inc., had just received the bad news from Frank Wild, head of quality assurance at Ranek regarding the 172 aluminum castings she had ordered for the first assembly run of the new PSW Model two weeks hence. She was not expecting any difficulties with this order, since she remembered buying the same castings for the earlier PSV Model. Marsha realized that a lack of castings could have a disastrous impact on the PSW assembly and introduction plans, for which extensive advance promotion had already begun. Therefore, she immediately tried to find out what went wrong with this order.
Engineering Information
A few hours later Marsha found out that the $150 casting did not meet specifications as shown on the engineering drawing sent to the supplier. All previous deliveries of the same casting had been identical in defects. However, the chief engineer, John Vickers, had made some adjustments for the PSV Model which made it possible to use the castings as supplied. According to John Vicers, it was not possible to make the same adjustments for the PSW Model, nor was it possible to fix up the defective castings.
The PSV Model Plans
Current plans for the PSV Model called for continued assembly until the PSW Model had taken over the complete market. No one was quite certain how many more PSVs might be made. Sales estimates ranged from a minimum of 100 over the next year to 500 over the next three years. It was unlikely that repairs of old PSV models would require more than 10 castings per year for the next ten years.
Roberts Foundry
Steve Roberts, president and owner of Roberts Foundry, the supplier of the castings, claimed that theWR93 castings were exactly the same as those of all earlier orders which had all had been accepted by Ranek. He was very surprised to hear from Marsha that there were difficulties with the castings.
The normal lead time on aluminum castings with Roberts foundry was about eight weeks. Marsha knew that Mr. Roberts was hungry for more business, even though his shop was very busy. He was currently working on a number of other Ranek orders. Roberts Foundry received about 40% of Raneck’s $4,000,000 total aluminum casting business with Gaskell and Sons, al long term reliable supplier receiving the remaining 60%. The current lead time with Gaskell was about ten weeks.