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Buy custom The Donley Brothers Company essay

The Donley Brothers Company is a company that is encountering problems with latent defects in some of its purchased castings. The problem is that the defects showed up after machining had already taken place and this cost the company a lot to repair. When the defects were discovered, the rough castings had to be taken out of the machine to be repaired and at times remachined but still 12 percent of the repaired castings ended up as scrap.

One thousand, one hundred and forty raw castings had to be purchased at a cost of $600 in order to produce 1000 good-machined castings. The company suffered many costs such as those that arose when rescheduling had to be done due to the inability of producing castings as required. The company also suffered losses due to loss of sales. This happened when the company failed to meet the production period stated by their clients, who later deferred due to the broken promise.

After several consultations from the different managerial departments, the managers thought that it would be wise if they would ask the suppliers to supply them with finished goods. This decision was made in an effort to leave the problem of finding the faults in castings to the suppliers. This would force the supplier to provide the best quality possible. Bob shared his idea with the suppliers and only one supplier was willing to supply finished products to the company with the condition that they would be their sole suppliers for three years. This left bob in a dilemma since he did not know what to choose for the company. A decision was to be made on whether the company should buy finished products, rough castings or maybe find a better alternative. This decision was hard to make since it was difficult to predict where the company would be in the near future, let alone three years.

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