Nirvana Products Company Has Just Gone Through a Rigorous Evaluation

question 4

True/False

Nirvana Products Company has just gone through a rigorous evaluation due to sliding profits in the past year. The engineers strongly recommend implementing an aggressive preventative maintenance program, but the accountants say it will cost $50,000. The lawyers insist on a zero-defect product inspection as the units are being packaged, but the accountants say it will cost $40,000. The vice president for production said he just thought it was too expensive of a gamble to take, but the factory manager pointed out that if they did not look ahead at the consequences, they could easily lose $100,000 of sales to their competitors because of shoddy goods, and a costly production shutdown that would cost them another $100,000 if the machinery gives out unexpectedly.
In this situation, the company should not invest in the quality programs being recommended because they are not justified on a cost/benefit basis.

Comprehend the relationship between manufacturing capacity, inventory costs, and meeting demand.

Understand the strategic responses to variability of demand to maximize profitability.

Learn about the importance of profit allocation among supply chain members for successful collaboration.

Acknowledge the use of flexible strategies, including workforce and dual facilities, to manage capacity effectively.

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Definitions:

Ectoderm

The outer germ layer of the early embryo; gives rise to the skin and nervous system. Compare with mesoderm and endoderm.

Protostomes

Animals that belong to the Protostomia, one of the major animal clades. Include the annelids, arthropods, and mollusks. Compare with deuterostomes.

Deuterostomes

A major group of animals characterized by their embryonic development, in which the anus forms before the mouth.

Spiral Cleavage

A distinctive spiral pattern of blastomere production in an early protostome embryo. Compare with radial cleavage.