Computron 1000x

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Executive summary

The Computron, Inc. is facing problems regarding pricing the bid for Computron 1000X, future functioning of Frankfurt plant, impact on production due to current market breakdown.

The main concern about Computron is that if the bid of 1000X should not higher than 20% of least bid to get the contract. It is strongly recommended to get the bid for functioning of new plant. Various issues regarding cutting down prices, bidding high or low and its pros-cons, current market situation and the competitors is discussed here.

Regarding the markup price, the top management is not allowing to go below 33.3%. Though some of the other options to be consider like on basis of past good relations with Konig explain them the benefits of high quality regardless the price, other options to be consider for future if bid is not gained etc. Such options are tested against the production, its cost, benefits to new projects.

Situation Analysis

Referring to current issue Computron is bidding $622,400 to sell its 1000x digital computer to Konig, which is 43% higher than least bid. A new manufacturing plant in Frankurt plant might have to sit idle for a couple of months if Computron couldn't win bid. Also Computron 1000X is purpose-built computer while Konig needs machine with less accuracy and flexibility.

Here are the some other issues:

1. Possible cut price to have a chance:

|Company |Price offered |
|Computron |$622,400 |
|Ruhr Maschinenfabrik |$ 436,000 |
|EDAG |$ 545,600 |
|

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