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The Computron, Inc.
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 |
We have cumulated a profit of $206 million over this period, second of the industry. Our goal of escalating profit has advised us to increase automation level and for cutting costs, which enabled us to have the margins of all products above 30% in 2019 and an average margin of 53.4% in 2024. Additionally, we invested to keep our products updated to the market trend with an attention to customer buying criteria. Moreover, starting from recent years, we run our full capacity with second shifts whenever the market need has a possibility to accommodate our production. To achieve a greater profit, we based our pricing strategy on the market movements in general by decreasing our price by $0.50 every year except for our Low End product-Acre.
PC industry is affected by two opposite forces: technological advance that pushes the industry forward and the industry sensitivity to economical stagnation (if the economical situation is bad customers won't upgrade their computers).
It has come to my attention that the functionality of my computer system is quite limited for the company’s day-to-day actions. It gives me great honor to propose, a new set of systems that will replace the dated systems that I currently use to complete my job. I am confident that these machines will allow me to think of new creative, ideas that will create new innovative marketing strategies for the company.
Capital requirements to set up an assembly line to produce PC's are also relatively low, estimated at roughly a million dollars (Rivkin & Porter,1999 pg. 5) which means that virtually any firm can enter the market easily. Despite sky rocketing demands for PC's, PC producers are unable to capitalize due to increasing number of competitors. The PC industry is also affected by environmental turbulence due to price fluctuations of its components. Constant innovation in PC technology causes older components to be rendered obsolete and prices of older versions to plummet. PC producers who are stuck with inventory of obsolete products incur high costs of dumping these components.
$384 per unit or "mark up" of 47% vs $764. per unit or "mark up" of 94% (not really a mark up, fixed costs not included).
The economic problem was that WorldCom had a vast supply in telecommunications capacity that emerged in the 1990s, as the industry rushed to build fibre optic networks and other infrastructure based on overly optimistic projections of Internet growth (Lyke and Jickling, 2002)
The development of the people these days had an affect in the development in the business world as well. People try to find the systems which can be use to help them in running the business for example to reduce the cost in running the business. Since 1950s the computer system had been use to cost.
Based on our company performance it is apparent that productivity at Echo Electronics declined significantly. I should have inform you sooner about the decline in sales and I am sorry for not getting to you on time. Meeting our customers ever-changing needs is the priority of Echo Electronics and I have taken immediate actions to improve our product quality and increase productivity. In order to retrieve our market place I decided to form a committee with the head of each department so we can avoid future mistakes. In addition, we will provide our employees with better training and detailed manuals on how to efficiently use new workstations. Also, to build better morale among our employees with will use motivational tools, such as, quarterly
began to take over the worlds market for tabulators, clocks, and electric type writers. By 1940 it was the us largest office firms that deals with machines. There sales had reach $50 million.
The percentage of mark-up is different almost in every transaction. If the price of raw materials is low, the company might set the highest at around 85% of mark-up and sometimes lower it to 80%-75% when the customers are negotiating a discount (only applied in bulk-buying). If the price of raw materials is high, the company set the mark-up at 45%-50%. On average, the company will set 65% mark-up.
department is in need of a complete new system in order to keep up the quality work
It is unsure once, if ever, costs can come back to equilibrium. The mispricing may become even a lot of pronounced within the meanwhile, doubtless forcing the businessman to shut the position.
As a technician, I get numerous calls everyday about how to overcome software problems, hardware problems, and everyday stupidity. The first two are usually a result of the third problem. That stupidity begins somewhere around the arrival of the initial thought to purchase the computer. Most people are fooled into believing that the need the fastest, most up to date and expensive technology to complete their task, despite the...
In 500 B.C. the abacus was first used by the Babylonians as an aid to simple arithmetic. In 1623 Wihelm Schickard (1592 - 1635) invented a "Calculating Clock". This mechanical machine could add and subtract up to 6 digit numbers, and warned of an overflow by ringing a bell. J. H. Mueller comes up with the idea of the "difference engine", in 1786. This calculator could tabulate values of a polynomial. Muellers attempt to raise funds fails and the project was forgotten. Scheutz and his son Edward produced a 3rd order difference engine with a printer in 1843 and their government agreed to fund their next project.
Thousands of years ago calculations were done using people’s fingers and pebbles that were found just lying around. Technology has transformed so much that today the most complicated computations are done within seconds. Human dependency on computers is increasing everyday. Just think how hard it would be to live a week without a computer. We owe the advancements of computers and other such electronic devices to the intelligence of men of the past.