Dennis Kwok had been with Mazda Electronic devices for 14 years, increasing from a junior quality control specialist to vp, operations. He previously seen the organization grow as a manufacturer of monitor monitors used in electrocardiometers. In 2001, Mazda made and distributed about two hundred, 000 products of it is current unit, the ME1001, at an common price of $150 every unit. The firm operates on a net margin of 5 percent and is in a little tax mount of 50 percent. A few months ago, Dennis met with Cassie Brown (V. P., marketing) and her marketing analysis group. Cassie indicated that the recently integrated medical group was interested in installing one particular million electrocardiogram monitors above the next five years if the screens and frames could be supplied in a all-in-cost of $100 per unit. Dennis shared this kind of news with Larry McDonald in the engineering R& D department. Larry called back again with some interesting news. Architectural was assured that a new model underneath development, the ME2001, could meet the ordering firm's specifications and could always be manufactured in a changing production cost of $65 every unit provided it could use a special plastic-type material frame created by Burton Plastic materials, Inc. Burton had acknowledged Mazda's technical engineers with a modele of a 9-inch supertough framework coated which has a special substance that produced the framework more elegant and economical. Burton could make 20, 000 such casings per month, beginning within 90 days, and provided a price of $30 every unit Farrenheit. O. W. Mazda's plant, provided Mazda agreed to make use of the new structures exclusively for the next five years. This cost of $30 per product was included in the $65 per product variable price estimate simply by engineering intended for the ME2001. The business cost accountant, Dirk Hageman, estimated that if 2 hundred, 000 units of the ME2001 were distributed, the share for fixed general, administrative, and marketing expenses of $4 mil per annum could add approximately $20 towards the cost per unit. It was based on the assumption the fact that...



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