Supply Chain Management
November 29, 2012
Prof. Ismael C. Pangilinan
Maria Munna Gravador
Geinah R. Quiñones
I. Statement of the Problem/Key Strategic Issue
Great Lake pleasure Boat
- A company that would represent 30% of annual sales of the company. -It will contribute to a long term financial impact to CJI
-Local specialty manufacturer of pump
-50 Bilge Pumps
Unit cost$ 1,500
Delivery cost$ 500
-Occurs every 4 to 5 months
-if Caolinn can supply 50 pumps per month or more. (Additional Labor, equipment and delivery cost will be incurred for increasing of volume) -Can CJI make its own bilge pump? (Initial capital investment is $ 500,000, hiring additional 3 employees and additional space)
II. Statement of the Objectives
* To identify whether to make or buy pumps for the company.
III. Relevant Case Facts/Findings
1. The 5-year contract with Great Lakes Pleasure Boats marked an important milestone for CJI – with this contract, Great Lakes would represent about 30% of CJI’s annual sales.
2. All items were built in-house by CJI except for the bilge pump which they’ve been purchasing from Caolinn Pumps – a small local specialty pump manufacturer, which had been a reliable supplier for CJI for a number of years. Bilge pump - A bilge pump is a water pump used to remove bilge water. 3. Caolinn Pumps produces and delivers 50 bilge pumps to CJI every 4 to 6 months which they sell at $1,500 per unit (including the $500 delivery cost)
1. CJI was not sure about the ability or willingness of Caolinn Pumps to increase the production and delivery of bilge pumps for increased demand for bilge pumps, for example 50 per month from the usual 50 for every 4-6 months. 2. There is no supplier evaluation on Coalinn Pumps for CJI to...