Disrupted Production Schedules and Operations essay
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It could be advisable for Bob Donley to sign a contract with Akron Foundry as the only supplier of the finished castings, since it was the only one with a genuine interest in the company. This could save the situation, bearing in mind that the company had already lost a number of customers from the inconvenience caused so far. The other suppliers were not interested and yet the company was at the verge of collapsing, due to huge losses it was to incur; therefore, trying to consider them might be a waste of time.
Contracting Akron foundry with all the shop working at full capacity, there will be dollar savings, since the shop is expected to be using more than 1,000 castings as previously, leading to an additional earning. Having Akron Foundry as the supplier of the castings is quite a risky deal, considering the fact that the Donley Brothers won’t be able to act properly if Akron is paralyzed in any way. They will also have a greater bargaining power in the affairs of the company to their own advantage (David and Pinkerton 56). The other suppliers are expected to insist on the Donley Brothers, respecting their dully signed contracts until their expiry date or lead to a pile of cases in the court of law.
The Donley Brothers are responsible for the decision concerning manufacturing or buying, thus it means they should be careful in their next move if they want to be upfront. The Donley Brothers can opt to get a bank loan to bail themselves out to avoid Akron foundry or any other supplier coming in. They can only sale some of the shares in their company to raise money.