EXECUTIVE SUMMARY
This is a case study involving a situation where a textile manufacturer and exporter has received an order that was placed by one of their good customers in the early days of the off-season period. This offer presents equally awarding benefits but also poses a real threat in the event something goes wrong in the production process. Benefits vary from increased profits to customer satisfaction. The main danger in this offer package is late delivery which would lead to the client deducting the amount payable to the company or the manufacturer being stuck with goods that are immovable at that time of the year. In the year 2000, Ferrel and Mansfield in their book Journal of Business Ethics: A review of empirical studies assessing decision making in business, state that an informed decision is supposed to be made to salvage the manufacturer from potential losses or steer them towards profit making.
DECISION PROBLEM
The manufacturer has two decisions to make. One is to make a decision that would allow the processing of the order to take place. It will come with heavy risks as it might lead to loss making in case something goes wrong. It also has perks such as government incentives, increased profits and also it will lead to motivation of workers as they will have an extra two or three weeks of work during the off-season period. The other decision is turning the offer down. The problem with this is it might lead to the client turning to another manufacturer and with time; this decision might become a permanent one. In his book The ordered weighted averaging operators: theory and applications of 2012, Kacprzyk stated that the manufacturer has the option of taking the risk so that even in the case there is loss making, this will compensated for the season comes to its peak.
DECISION ALTERNATIVES AND EVALUATION
Choosing to go ahead with the order will eventually lead to profit making and also it will help the manufacturer secure a few government incentives since the profit made is well above the required amount to secure the incentives. Even when factoring in the possibility of the late delivery and the least possible payable amount is paid, the government incentives will still cover up for the losses and lead to profits but of a smaller margin. This will also contribute to customer satisfaction and upholding of the currently cordial relationship between the two.
Turning down the offer might look beneficial to the manufacturer, but this is only at face value. Basing the argument on facts, there are no real gains from turning down the offer. If anything is to go by, turning down the offer will only lead to customer disgruntlement and dissatisfaction. Such an occurrence will in the long term lead to a probable loss of the client as the manufacturer show the inability to meet demand.
CONCLUSIONS AND RECOMMENDATION
The best decision to make would be to go ahead with the order as there is no direct indicator of a loss being made. In the worst case scenario, the shipment would be late and this would incur fines from the client. For the profits to be completely undercut, the amount to be paid would have to be about twenty percent of the amount initially agreed between the manufacturer and the client. The loss would be covered by the government incentives and this would lead to the situation culminating to more of a customer adherence and employee satisfaction measure. In 1972, Lee in his book Goals programming for decision analysis: An integrated approach to the multiple decision making analysis criteria stated that the effort might not look like much but its effect would come into force during the peak period of the season (Lee 1972). This would be in terms of them having a loyal customer, commendable employee input and the profit margin they missed out during this period would be covered for then.
WORKS CITED
L Ferrell, P Mansfield - Journal of Business Ethics: A review of empirical studies assessing decision making in business, 2000
Lee S. M. Goals programming for decision analysis: An integrated approach to the multiple decision making analysis criteria. 1972.
RR Yager, J Kacprzyk - The ordered weighted averaging operators: theory and applications- 2012
