answer these 4 questions please

will hit like

Case Study 1 - Arva Furniture Ron Hill and his wife Debora have are the founders of Arva Furniture, a small-sized company in Arva, north of London Ontario that produces wooden yard and patio furniture. Since its establishment in 1975, they have had small orders from rural retailers, which they have managed with their existing equipment and staff. A close church friend introduced Ron to Larry May who was visiting his sister in Arva during the Christmas holidays. Larry is a major maintenance contractor for parks and recreation facilities of many municipalities in Southwestern Ontario. The social conversation between Ron and Larry soon led to a business talk ending in Larry visiting Arva Furniture workshop. Impressed by the quality of their products, Larry told Ron and Deborah that at the right price he would like to sign a one year contact for an order of 500 benches to be delivered in the following year pending on two conditions: a) the shape of bench legs are slightly changed as per his ordered, b) the bench legs are made of treated maple. He also mentioned that if the order is handled satisfactorily it might be repeated in the future. While they welcomed this business opportunity, Ron and Debora requested a week to evaluate the offer before signing the contract. Larry agreed as he was planning to stay in Arva for ten days. Next morning at breakfast Debora found Ron quiet and worried so she asked him if it was because of this new business offer. "I don't know, Deb", Ron said it is a heck of deal for us, but I am worried because delivering 500 benches a year with the specs Larry wants could be challenging! I am not worried about timely production and delivery of this order over a year, but we need to be very careful about ordering the material because we cannot afford to put a lot of money in our inventory. What's more, we may need to buy new machinery to do the custom cutting of the bench legs as per order specs!" Debra suggested they talk to their foreman, Alex to evaluate the operational challenges they may face. They called Alex to inform him of the offer and asked him to meet them the next day so that they could discuss it. In their next day meeting Alex outlined two concerns with the new order: 1) timely ordering of the new material (treated maple) for the bench legs to minimize inventory cost, prevent interruption in production and hinder delivery of benches and b) the new cutting/shaping of the legs that introduces changes in process. "I let you look after the ordering, Debora, but for the new legs we need to revise our equipment a bit. Alex believed the company had three options: a) buy and refurbish a used multi-purpose saw at a cost of $60,000, b) add some new blades matrices to their existing table saw at a cost of $ 90,000 or c) buy a new computerized universal table saw at a cost of $100,000. The three options would be associated with $120, $90 and $60 in operating costs (labor, inventory and maintenance) per bench respectively. Examining their suppliers and their ordering practice Debora estimated $2 (per leg set) for carrying the new material as it has to be kept under indoor condition (temperature/moisture controlled warehouse) and the best supplier she found would charge $40 admin fee per order. She intuitively figured with an expected $ 100,000 profit they should be able to handle this order and conducting the rest of their business as usual. With the above information Ron and Debora have hired your group as consultants to help them with the following: 1- What should they do about their equipment and why? 2- How should they go about ordering the required material (how much to order, how many orders to be placed, how much inventory to be kept)? 3- What price/bench do you suggest for the one year contract and why? 4. Would your recommendations on machinery change if the order size doubles? How and why