The following post has two assignments namely;
1.E-Razor, Incorporated
After four years as a new start-up, e-Razor has expanded its line of programmable razors to include both linear and rotary models, as well as women’s and teenagers’ versions. Programming is simply done by the user through icons that adjust the speed of the cutting head, adjust the distance from the skin (to avoid ingrown hairs or give the sexy look of a day’s growth), activate the trimmer, and so on. All the razors use the same electronics module to keep costs down. e-Razor is now planning their budget for next year, including their investment in razor re- search, development, and product improvement, as well as investments in their production process to improve quality and lower costs. Eight projects have been proposed for top management’s consideration, as follows:
A. Marketing would like to see the programmable functions extended to stay ahead of the competition, which might involve a new electronics module, the brain of the razor. Projected cost: $25,000.
B. Manufacturing believes a mixed-model flow line would reduce costs and improve quality at the same time. To a large extent, the same production equipment as currently used in their job shop process could be reconfigured for the line and only a few new items would be needed. Projected cost: $11,000.
C. Marketing would also like to see the programmable feature extended to other health/ beauty products, such as hair dryers, facial saunas, and such. Projected cost to investigate and report: $16,000.
D.Sales has received feedback from customers that an engineering modification to the razor head allowing the razor to be used in the shower would make it much more useful. The production process would need to be modified somewhat. Projected cost: $9000.
E. Engineering has been evaluating a new user interface that would allow many new functions to be easily added. Moreover, it is faster and easier for the user to program. The current production process can be used. Projected cost: $17,000.
F. A consultant in chemistry who has been investigating the properties of tiny strands of cut hair for the firm believes there may be a way to keep the shaving head clean without opening the head enclosure and emptying or rinsing the head—a distasteful task for most people. Such a change would substantially change the production process. Projected cost: $22,000.
G. Sales has had inquiries from customers about whether a cheap, limited-use version of the razor is available for business trips and vacations. A new production line would be required. Projected cost: $28,000.
H.Along the same line, customers have asked if a purely battery-driven (nonrechargeable) razor is available. This would primarily involve a change in the type of battery being used; the production process would be only slightly affected. Projected cost: $8000.
Questions
1. Construct an aggregate project plan for this portfolio of projects and place the projects on the diagram with the diameters of the circles representing their projected costs.
2. Analyze the diagram for balance across the categories. Are there any gaps or excesses? What should the distribution of projects look like for a firm of this age?
3. The total budget for these projects is limited to $100,000. Which projects would you suggest implementing
2.Stafford Chemical, Inc.
Stafford Chemical, Inc. is a privately held company that produces a range of specialty chemicals. Currently, its most important product line is paint pigments used by the automobile industry. Stafford Chemical was founded more than 60 years ago by Phillip Stafford in a small town north of Cincinnati, Ohio, and is currently run by Phillip’s grandson, George Stafford. Stafford has more than 150 employees, and approximately three-quarters of them work on the shop floor. Stafford Chemical operates out of the same plant Phillip built when he founded the company; however, it has undergone several expansions over the years.
Recently, a Japanese competitor of Stafford Chemical, Ozawa Industries, announced plans to expand its operations to the United States. Ozawa, a subsidiary of a large Japanese industrial company, decided to locate a new facility in the United States to better serve some of its customers: Japanese automobile manufacturers who have built assembly plants in the United States.
The governor of Ohio has been particularly aggressive in trying to persuade Ozawa Indus- tries to locate in a new industrial park located about 30 miles from Stafford’s current plant. She has expressed a willingness to negotiate special tax rates, to subsidize workers’ training, and to expand the existing highway to meet Ozawa’s needs. In a recent newspaper article, she was quoted as saying:
Making the concessions I have proposed to get Ozawa to locate within our state is a good business decision and a good investment in our state. The plant will provide high-paying jobs for 400 of our citizens. Furthermore, over the long run, the income taxes that these 400 individuals will pay will more than offset the concessions I have proposed. Since several other states have indicated a willingness to make similar concessions, it is unlikely that Ozawa would choose our state without them.
George Stafford was outraged after being shown the governor’s comments.
I can’t believe this. Stafford Chemical has operated in this state for over 60 years. I am the third generation of Staffords to run this business. Many of our employees’ parents and grandparents worked here. We have taken pride in being an exemplary corporate citizen. And now our governor wants to help one of our major competitors drive us out of business. How are we supposed to compete with such a large industrial giant? We should be the ones who are getting the tax break and help with workers’ training. Doesn’t 60 years of paying taxes and employing workers count for something? Where is the governor’s loyalty? It seems to me that the state should be loyal to its long-term citizens, the ones who care about the state and community they operate in—not some large industrial giant looking to save a buck.
Questions
1. How valid is George Stafford’s argument? How valid is the governor’s argument? Is Stafford Chemical being punished because it was already located within the state?
2. How ethical is it for states and local governments to offer incentives to attract new businesses to their localities? Are federal laws needed to keep states from competing with one another?
3. Does the fact that Ozawa is a foreign company alter the ethical nature of the governor’s actions? What about Ozawa’s size?
4. What are George’s options?
