What is the quantitative analysis in this situation?

Case 11-2 McMichael Inc. Art Flynt, packaging byer for M.Micul Inc, Mwa smelding shop. It depended heavily on automotive working on an import substitution project involving a local contracts a sitio Bert Wood wished to correct by minority supplier. He was concerned, however that his quiring more motive business. In conjunction forts would be fruitless because his original proposal had with Mi's copineers, Bert Wood had worked out a mold been flatly rejected by the plant manager as too expensive design for the cream dispenser and included several McMichael Inc. a medium-sized company, had over the gesties for improvements. The cost of the mold years specialized in prescription skin care product, was $56.000, a investment Bert Wood was in no post ker niche in which it had developed an excellent reputation tion to make and that would have to absorb up front About three years ago, after extensive testing. Ml had intro Bert Wood quoted a unit price of 0.27 hased on pur duced a new facial cream in a pocial package that allowed chase quantities of 30,000 units at a time and an annual for precise measurement of the quantity dispered. The womestimated 300,000 units Ben Woodhad sub container, manufactured by a French firm for a different apie acest beadows of this quote as follow plication was fairly expensive at an FOB MIX factory.com of 0.36. What concerned Art Flynn even more, however, Resin 16% were the quality and delivery problems encountered. Com Labor 30 munications with the manufacturer were difficult, and Ant Overhead 8 had the impression the manufacturer did not seem to e 27 much about ME's business, which Art knew was only a mall proportion of their total volume produced With the cooperation of MI's marketing, engineer ing production, and quality control personnel. Ant had found a local minority supplier who appeared capable of meeting M's requirements. This custom molding firm. OSA Inc., was owned by Bert Wood a high engine who had purchased the firm several years earlier when the previous own wished to retire OSA Inc. hadits When Auted this quote along with the request for own tool und die manufacturing operation as well as its 2356.600 cmt up from the plant manager and le 320 Purchasing and Supply Management treasures both turned it down arguing that the 24-month pay The schedulinggoforamber of years hadeda back on the mold was far too long and that the company had modified MRP When Ast discussed the new pack better investment opportunities with a 12-month payhack age idea with them they told him that if the new product Art was disappointed, because he had hoped this proje and the oldere were to be packaged in the same package. ect would assist in helping him meet his savings target atalaget about 10,000 units would for the year. When he talked the idea over with his man makes and that the master production schedule could ager, Louise Moffat, she suggested he give it another ty easily beated to the two products in conjunction She said, "I am sure that if you can get the mold pay Antal discussed the station with the resin supplict, back down to 15 months, you will get a warmer reception who indicated that Bert Woodhad been used There are not that many deals around this company that on the loss of 30.000 packages, but that a 40,000 unit pay for themselves in one year. She also suggested that lot would fall into a new price bracket 5 percent lower Ant talk to marketing to see if some other products could than the originally and price use the same packaging, and to the production scheduling Art wondered just what effect all of this new informa group to check if different production quantities could be tion would be on his original proposal. He know that ordered Ben Woodhad been adam about his 50.27 quote. Bert When Art talked to the marketing people he found Wood had a wamesed as a minority up out that the package was ideal for another product to be piliet. But I don't want to hide behind that fact. I want no introduced shortly and with an annual demand estimated special faves any of my customer. Nor am I in a at 100,000 units Marketing had been uneasy hout using position to make special is to anyone else. I have had to the French package because of the difficulties enco borrow at what I consider to be ridiculously high interest tered with it and assured Art that if he could get a reliable as to be this company. Now have to make it pay off domestic source, this option would be highly attractive My S027 price is as low as I can se, as far as I can see