Read the case study on Durham Cabinets Case $16-3$Review the video on Green Manufacturing at Xerox

Share the roles of the supply manager in product recycling and disposal of products

What is the possibility of reusing products for Durham Cabinets based on the video shared

What are the key areas of information that should have been provided to Tim so that he can make the most effective ways to reduce the old inventory

What is circular economy? Can the principle be applied to the case?

Use outside research to support your answers

Case $163$ Durham CabinetsTim Zhang, purchasing manager at Durham Cabinets, was meeting with the company president, Ryan Bauer, on Tuesday, February $18,$ to discuss the disposition of surplus manufacturing equipment. As the meeting concluded, Ryan commented: There is no sense paying to store equipment we will never use. See what you can get for it$.$ We got a pretty good deal when it was purchased at an auction three years ago, so I expect we might even be able to make a profit. As Ryan left the office, Tim looked at the list of surplus equipment sitting on his desk. He wondered where he should start and how to establish prices for the equipment.DURHAM CABINETSPage $520$Located in Durham, North Carolina, Durham Cabinets had grown to be one of the largest fully integrated cabinet manufacturers in the region. Established in $1965,$ it offered a broad range of cabinets, with a reputation for delivering high$-$quality products for the new home construction and renovation markets. Most of its products were for kitchens and bathrooms. Every Durham cabinet was a custom order, and most components, including doors, cabinet boxes, and panel parts, were manufactured in its $125,000-$square$-$foot manufacturing facility.Although the current demand for cabinets was robust, the industry had recently suffered through a period of soft market demand due, to a large extent, to a weak new home construction market. During the economic downturn, several large U$.$S$.$ cabinet manufacturers went bankrupt. Approximately three years prior, Ryan Bauer and other members of senior management at Durham Cabinets attended a bankruptcy auction where they purchased several pieces of equipment for approximately $$1$ million. Ryan observed that, I thought we were getting good value. The equipment was only two years old at the time and the market for used equipment was weak, so we paid about $10$ cents on the dollar compared to buying similar equipment brand new. Our expectation was that we could upgrade some of our manufacturing processes, including automation that would reduce labor costs. Some of the equipment has been installed in the plant, but six pieces are still sitting in a warehouse. The difficulty is that the equipment is designed for much higher volumes than we produce and the level of automation does not fit well with our product mix, which is focused on custom design and make to order.EQUIPMENT DISPOSALThe list of the surplus equipment is provided in Exhibit $1.$ The equipment was in good working condition and had been stored in a local warehouse for the past three years at a cost of $$7,500$ per month plus utilities. The lease was set to expire at the end of March, but the landlord was open to extending the lease on a monthly basis. The information in the exhibit includes the auction price and costs for shipping to Durham $($freight and rigging$).$ The most expensive piece of equipment was a German$-$made five$-$station automated sanding line, which had the capability to handle three$-$dimensionally shaped surfaces and edges. The line was $120$ feet long and eight feet wide with a capacity of $250$ doors per hour. The second most expensive piece of equipment was a seal coat line, manufactured in Italy, which applied lacquer coatings to doors using two oscillating spray arms and an automated feeder.EXHIBIT $1$ Equipment Costs $($$$)$ Table Summary: SummaryEquipmentCostFreightandRiggingTotalSanding line$211,400160,100371,500$Seal coat line$90,50068,900159,400$Hanging line$30,20023,00053,200$Grinder$54,40041,30095,700$Dust collectors$14,50011,00025,500$Molding sander$18,10013,80031,900$Total$419,100318,100737,200$Hoping to get some ideas about where to start, Tim stopped by the office of the plant manager, Martin Utley. Martins feedback was, I dont know who could use equipment of this size and capacity, especially the sanding line and coating line. These machines have the ability to handle seven or eight times our volumes.Tim understood that Ryan would expect him to identify the most beneficial disposal option for the surplus equipment. However, because he had almost no experience with equipment disposal, he wondered how to proceed and what criteria should be used to assess the various options. How much was the equipment worth and who should he call to get prices? Were there any legal considerations? Who should be responsible for removing the equipment from Durham Cabinets warehouse?