Operation
A CASE STUDY IN Production and Operations Management
“PACCAR TRUCK LEASING”
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I. Background
➢ PACCAR Inc. is a freight car and lumbering equipment manufacturer. Its primary business is building heavy-duty trucks (Class 8) diesel trucks under trade names of Peterbilt and Kenworh. ➢ PACCAR manufactures only the tractor part of a tractor-trailer rig which excludes the trailer part. ➢ PACCAR’s competitors not only manufacture Class 8 trucks but also make smaller trucks . These are: o International Harvester which makes different kinds of trucks, construction equipment and all sorts of agricultural equipment. Previously the largest producer but experienced severe financial crisis due to labor strike problem o Mack Trucks which is second to PACCAR, Inc. in terms of selling the Class 8 trucks. This company also makes middle-weight trucks and in controlled by foreign conglomerate ➢ Other companies which offer more standardized trucks other than the three (3) leaders namely : Ford, GM and Mercedes. ➢ Edge of PACCAR’s Class 8 trucks compared to others: o Built-in product quality and priced at a premium over competitors o Known as the “Cadillac” of the industry o Strong distribution and service network around 250 dealers ( After sales service which offer full maintenance and repair service o It has a strong financial position, virtually no long term debt and its current ratio is 2.6 o One of the few companies in automobile and truck industry to have uninterrupted profits over the last 10 years.
II. Statement of the Problem
Should PACCAR enter into a full-service truck leasing business to boosts its
“PACCAR TRUCK LEASING”
[pic]
[pic] [pic]
[pic]
[pic]
I. Background
➢ PACCAR Inc. is a freight car and lumbering equipment manufacturer. Its primary business is building heavy-duty trucks (Class 8) diesel trucks under trade names of Peterbilt and Kenworh. ➢ PACCAR manufactures only the tractor part of a tractor-trailer rig which excludes the trailer part. ➢ PACCAR’s competitors not only manufacture Class 8 trucks but also make smaller trucks . These are: o International Harvester which makes different kinds of trucks, construction equipment and all sorts of agricultural equipment. Previously the largest producer but experienced severe financial crisis due to labor strike problem o Mack Trucks which is second to PACCAR, Inc. in terms of selling the Class 8 trucks. This company also makes middle-weight trucks and in controlled by foreign conglomerate ➢ Other companies which offer more standardized trucks other than the three (3) leaders namely : Ford, GM and Mercedes. ➢ Edge of PACCAR’s Class 8 trucks compared to others: o Built-in product quality and priced at a premium over competitors o Known as the “Cadillac” of the industry o Strong distribution and service network around 250 dealers ( After sales service which offer full maintenance and repair service o It has a strong financial position, virtually no long term debt and its current ratio is 2.6 o One of the few companies in automobile and truck industry to have uninterrupted profits over the last 10 years.
II. Statement of the Problem
Should PACCAR enter into a full-service truck leasing business to boosts its