Case Study Cj Industries and Heavey Pumps
I. Background of the Case
The CJI Company Wants to approve their capability of providing the required items for the Great Lakes boats company, in order to increase their incomes, $10 millions a year, and to get the long-term follow-on potentials as well. It will do that through the contract signed with it. The CJI has a problem of providing the required quantity of bilge pumps and the purchasing manager who put the contract together with Great Lakes faces three solutions we will see them in the incoming sections.
II. Problems Statement
How the CJI Company can supply 50 pumps per month for the Great Leak Company.
III. Alternative Solutions
The Alternative solutions which CJI Have Are:- 1- Continue to use Heavey to supply pumps. 2- Make them in-house. 3- Consider one of the other suppliers. Details
3.1- Continue to use Heavey to supply pumps. The cost of every pump is Manufacturing $1,490 per unit Delivery $10 per unit The require quantity is 50 units per month The total cost will be = 50 X $1,500 = $75,000 per month
3.1.1 Advantages:-
1- A reliable supplier.
3.1.2 Disadvantage:-
1- The issue with Heavey Pumps was whether or not they could guarantee delivery of 50 pumps per month to one of the CJI warehouses. 2- There were potentially additional equipment, labor, and other production costs for Heavey associated with the extra demand for bilge pumps, not to mention extra delivery costs as well. 3- Heavey had been a reliable supplier for CJI for a number of years, but nothing else had ever been purchased from them. In addition, because the demand for these pumps was rather low and the deliveries were sporadic, no performance records had ever been kept for them. 4- Unknown quality history of the Heavey bilge pump.
3.2- Make them in-house.
Initial cost to build
The CJI Company Wants to approve their capability of providing the required items for the Great Lakes boats company, in order to increase their incomes, $10 millions a year, and to get the long-term follow-on potentials as well. It will do that through the contract signed with it. The CJI has a problem of providing the required quantity of bilge pumps and the purchasing manager who put the contract together with Great Lakes faces three solutions we will see them in the incoming sections.
II. Problems Statement
How the CJI Company can supply 50 pumps per month for the Great Leak Company.
III. Alternative Solutions
The Alternative solutions which CJI Have Are:- 1- Continue to use Heavey to supply pumps. 2- Make them in-house. 3- Consider one of the other suppliers. Details
3.1- Continue to use Heavey to supply pumps. The cost of every pump is Manufacturing $1,490 per unit Delivery $10 per unit The require quantity is 50 units per month The total cost will be = 50 X $1,500 = $75,000 per month
3.1.1 Advantages:-
1- A reliable supplier.
3.1.2 Disadvantage:-
1- The issue with Heavey Pumps was whether or not they could guarantee delivery of 50 pumps per month to one of the CJI warehouses. 2- There were potentially additional equipment, labor, and other production costs for Heavey associated with the extra demand for bilge pumps, not to mention extra delivery costs as well. 3- Heavey had been a reliable supplier for CJI for a number of years, but nothing else had ever been purchased from them. In addition, because the demand for these pumps was rather low and the deliveries were sporadic, no performance records had ever been kept for them. 4- Unknown quality history of the Heavey bilge pump.
3.2- Make them in-house.
Initial cost to build