Bells Chemicals Coursework

Bells Chemicals is at present face up a major worry that it had never faced since its inception. As I cook been given the responsibility to sort it out, I go away written promulgate to the best of my knowledge and capabilities in arriving at an appropriate stopping point. The four-member team institute to decide which of the 2 autos (Chemex and AFU) to purchase for its oldest product celebrate, has non been successful in doing so.All the four members countenance their own viewpoints and the situation has wrench very confusing. The machines in the Preserve whole use up not been replaced ever.They were performing well wholly these ten years, provided now there is partition of one of the machines. at that place ar both choices for the beau monde i. e. buying the Chemex machine (the one that was creation used all these years) again or to go for the saucy AFU building block. Arriving at a wane conclusiveness is the puzzle. Had the beau monde made an autocratic decision there would have been no motivation to consult its key professionals. unless this greet would have been termed unfriendly. The friendly approach has some of the dis prefers like the catamenia dilemma.However, keeping aside other things, coming up with a better solution is the fatality of the hour now. I think the beau monde should go for the Chemex machine. This decision of mine can be characterised as the quick-scented counsel of decision-making. The Normative closing Making model i. e. defining a enigma and rigorously on the job(p) a trolling it has helped me in arriving at this decision. I have optimized as ofttimes as possible to come to a decision beneficial to the organisation. The rational approach of caper solving is the path I have taken. Main body of the report Mr. Steve Bell is not much interested in getting funds from outside.Especially when the friendship had recently financed or so of its capital investments from its own retained profits, for products and capital investments for other products of the telephoner. Capital take to install a sensitive Chemex machine is much lower than the AFU whole. non only this, by installing the Chemex machine the company testament withal be saved with the hassle and stress of taking its first scant(p) term loan. The funding of regular operations of the company all round the year will get affected as the company has tucker out accumulated profits in developments and expansion of other products. consequently this monetary year, sexual funding is a major issue too. Operating comprise of AFU unit is extremely expensive when compared to the operating monetary value of the Chemex. machine. At the present merchandise stage it is impossible for the company to cover additional cost of ? 18000 as operating cost against advantages, which are not very well defined. If we go through and through the viewpoints of the marketing manager we can derive the following learning about our present and expect market. Companys labor enquire for authorized market 90000 Kg Companys production need for expected market 100000 Kg Annual market need for current market 200000 Kg Annual market need for expected market 250000 Kg When compared to the production and selling cost estimate of ? 320 per Kg for AFU unit to production and selling cost of ? 350 for Chemex machine, the AFU unit brings forward a brighter picture. Also with the AFU unit production and selling cost can be reduced by ? 2700000 a year at current production rate but we cannot neglect the high acquisition and operating cost attached to the AFU unit either.Retaining present market share should be the current goal of the company keeping in mind the emergence of new competitors in the market. The chief chemist has been trying to modify the product Preserve so that it can be used in wider ranges of food products, but has not been successful yet. The increase in market demand at this market stage can also not be pred icted. therefrom demand for increase in production is out of the way. Hence for the bordering couple of years it is advisable to install a new Chemex machine instead of the AFU unit to satisfactorily cover the market growth.Why to waste coin on an expensive machine when a cheaper one can join the requirements successfully? Quality is one of the major issues for the marketing manager with new competitors in the horizon. The marketing manager will naturally aim to increase, or at least retain his market share for the best benefits. If the AFU unit is installed then, there will be a major quality inconsistency. Chances are that the other Chemex machine that is giving good performance and the new AFU unit will produce contrasting qualities of the same product. This is quiet normal because two different machines can give different end results.The integrity of the company will become questionable then. Customers will find two different items in two similarly packaged products. They m ight react negatively in this situation and chances are they might even turn to the products of our competitors. This is a big price to pay if AFU is installed. Installing AFU unit has one advantage and that is it does not require expenditure in quality control as it has an automatic quality control system. On the other hand the recruited technicians of the company do the quality control of the Chemex machines.They are the regularly paid staff. With the innovation of the AFU unit they will have to be paid the same property for half of the their actual work. Their salary cannot be cut down as chances of revolt in the company can erupt because they will never allow a cut in their salaries for no fault of theirs. Hence from this angle too it is a more intelligent step to go for the Chemex machine instead of the AFU unit. Keeping the high cost of the AFU unit, its maintenance will probably be good but we cannot be sure without exam it.Chemex machines require regular maintenance but this is not a problem for the company. Since Chemex is a local company, any breakdown is immediately rectified. after working with the Chemex machines for such a long period of time, the technicians have also become experts in handling its minor problems to a great extent. But the breakdown of the AFU unit will become a major headache for the company for sometime. Each time anything will go wrong, the company will have to get totally dependent on its manufactures who are not local like that of the Chemex machines.A lot of time will get wasted in all this. Keeping this factor in mind, again the Chemex machine hit over the AFU unit. Another major concern is the after sales service. After Sales Service of Chemex has been tested and they have always satisfied the company so the future is secure with this supplier. This cannot be said in the AFUs case at the moment. I have applied Creative decision Making model, Optimizing model, Kralijicc Purchasing model and of course the Normative Decision Making model while arriving at the decision regarding the purchase of the correct machine.Through Creative Decision Making model I recognized the problem after going through the case study. By going through the viewpoints of the four key members of the SMG team, I coherently arranged the study regarding the two machines. I analyzed the whole problem from different angles with the help of the information I had gathered and arranged. I came out with multiple solutions of the same problem. then(prenominal) I went through all the utility(a)s one by one and chose the well-nigh correct option. Through the Optimizing model I was able to optimise the alternatives of the problem situation.Since this model is similar to the Creative Decision Making Model and the rational approach that I took, things became easier to sort out. According to Have et. al. (2003, p. 115) The Kralijics (1983) purchasing model and the variations developed over the last decades help management take awa y the most appropriate purchasing strategies for different types of products, thereby optimizing the trade-off among cost and risk. Costs include both the direct and indirect cost of purchasing, for example, management time, and trouble shooting and drawing up contracts. Two prefatory dimensions are included in Kraljics matrix Impact on financial result Supply risk (or uncertainty) I went through this approach too, to arrive at a strong and appropriate decision. Since requirement of this report was to base it on the Normative Decision Making model I followed the following steps while approaching the decision Defining of the postulate problem Setting of the objectives Identifying the alternatives Evaluating appropriately Making choice of the best alternative Sensitivity Analysis Arriving at the best decision Recommendation I recommend the company to go ahead and purchase the Chemex machine.By doing so the company would not only be paying attention to the profitability of t he company, financial viability of the decision but also the satisfaction level of its entire staff. The guest will also remain loyal to the company because they will not find any inconsistency in the products they have got used to since the historical ten years. The members of the SMG team who were pro AFU unit will also deem with me if they go through this report as at this stage when we have limited resources and growing number of competitors we should stick to the theory that the old is amber.References Drennan, D. , and Pennington, S. , 1999. 12 Ladders To World Class Performance how YOUR organization can compete with the best in the world. UK Kogan Page Limited. Fitzroy, P. , and Hulbert, J. , 2005. Strategic Management Creating Value In Turbulent Times. Great Britain John Wiley & Sons, INC. Have, S. T. , et. al. , 2003. Key Management Models the management tools and practices that will improve your business. Great Britain Pearson Education Limited. Hegde, Y. S. , and Kris hna, R. , 1993. The A to Z of Management Skills. saucy Delhi UBSPD.