What is the background to the problem?
Two weeks ago
we can’t make the plant work anymore – the costs are just too high. *
check out what our operational costs would be if we move, and report back to me in a week *
high-cost labour in a third-generation, unionised US manufacturing plant *
520 people who made a living at Lamprey’s facility, *
if it closed, most of them wouldn’t be able to get a job elsewhere (small town) *
$1.6 compared to $16
That was a saving of nearly US$15 million each year for Lamprey although it would be offset in part by increased costs for training, transportation and other matters. *
Jim had enough information to develop a set of comparative figures of production and shipping costs *
knows he has to fire people
long history of oworks
competitors had already edged past Lamprey in terms of price and were dangerously close to overtaking it in product quality *
union members are vulnerable
it was apparent that Lamprey could put its investment dollars in a bank and receive a better return than its operation is currently producing. *
he personally believes would be wrong as long as there is a chance its costs can be lowered.
What issues can be identified in the case?
competitors had already edged past Lamprey in terms of price and were dangerously close to overtaking it in product quality in orer to remain competitive the busniess must remain flexible Jim doesn’t want to write up the report or come to the recommendation that the plant move even though he knows it will fulfill jack (boss) plans for the business Jim has tried to look into other ways of achieveing this but and things it’s wrogn to...
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