quantitative
Case 25 Harimann International
MANA 6302 03
David Thomas Breaux
Dallas Baptist University
Executive Summary
Vikram Dhawan is the president of Harimann International that he established in May of 1990. Vikram established the business in an effort to fund his impending Masters in Business Administration in the United States. The business is located in Delhi, India where tax incentives are offered for business who export goods and materials to targeted countries including Japan, Canada, and France. Incentives in India include no tax on goods shipped to target countries, incentives on shipments exceeding 150,000 INR, partial rebated duties taxes on raw materials imported for the use of exported goods, cash incentives, and license renewals for materials used in production.
Harimann International in its first year, 1990, focused on the exporting of linen household goods. Business was slow and profits were low until 1991 when a particular type of hand-embroidered table linen became very popular. Sales and orders increased. Dhawan was then faced with the inability to rely on his supplier after the demand exceeded their ability to provide material need for the impending orders. Dhawan then established a second manufacturing facility employing over 100 employees and producing an average of 1,000 garments a day.
In January of 1992 one of Harimann International’s first clients Pioneer Trading Company requested samples and later placed an order with Harimann for six styles of garments. The order well exceeded the 150,000 INR requirements and qualified for other incentives provided by the Indian government. Pioneer Trading Company also placed a stipulation on the order that it had to be provided by the deadline of April 6th. This deadline would give Harimann International about two months to fulfill the order. Placing the order would allow Harimann to make a large profit, but also allow him to continue to employ workers for an extend period of time that
MANA 6302 03
David Thomas Breaux
Dallas Baptist University
Executive Summary
Vikram Dhawan is the president of Harimann International that he established in May of 1990. Vikram established the business in an effort to fund his impending Masters in Business Administration in the United States. The business is located in Delhi, India where tax incentives are offered for business who export goods and materials to targeted countries including Japan, Canada, and France. Incentives in India include no tax on goods shipped to target countries, incentives on shipments exceeding 150,000 INR, partial rebated duties taxes on raw materials imported for the use of exported goods, cash incentives, and license renewals for materials used in production.
Harimann International in its first year, 1990, focused on the exporting of linen household goods. Business was slow and profits were low until 1991 when a particular type of hand-embroidered table linen became very popular. Sales and orders increased. Dhawan was then faced with the inability to rely on his supplier after the demand exceeded their ability to provide material need for the impending orders. Dhawan then established a second manufacturing facility employing over 100 employees and producing an average of 1,000 garments a day.
In January of 1992 one of Harimann International’s first clients Pioneer Trading Company requested samples and later placed an order with Harimann for six styles of garments. The order well exceeded the 150,000 INR requirements and qualified for other incentives provided by the Indian government. Pioneer Trading Company also placed a stipulation on the order that it had to be provided by the deadline of April 6th. This deadline would give Harimann International about two months to fulfill the order. Placing the order would allow Harimann to make a large profit, but also allow him to continue to employ workers for an extend period of time that