Unruly Spider Case Study Example | Topics and Well Written Essays - 500 words

Unruly Spider - Case Study Example The major problems lay in the fact that the subcontracted company worked with inadequate drawings and inadequate tools. There was not a clear order from the engineer and this should have been communicated more effectively. The 1 1/8-inch-diameter holes had a rough finish on the bore. The magnaflux mark was not clearly legible. The inspection department rejected it. Extra money must now be spent by Mr. Speed to get the right tools and additional labor to finish the job right. If he does not raise the price on each unit he could lose money. A. The gears that were rough cannot be repaired but they could possibly be recycled and the money received from that could go to furnishing new equipment to make the grinding operation more efficient. B. Mr. Speed could raise his price to compensate for his expenditures of over $25,000 in repairing the tooling and redo with order with finished bores. C. The old gears can be recycled to decrease the extra costs and Mr. Speed should raise his prices to compensate for the difference. D. The advantages of recycling the gears are that it will offset some of the cost and the disadvantage of this would be that the costs will not meet the total expenditures. Mr. Speed raising his price per unit could result in extinguishing his output and making him a profit. The disadvantage of this would be that the price per unit may not be economical for the customer. The best choice would be for Mr. Speed to raise his price per unit and receive his profit on the back end. The process of salvaging the rough bores is not economical because it would require the operation of expensive chrome plating. It is best to raise the price and get the necessary equipment needed to complete all future jobs efficiently.