Business, 11.02.2021 01:10 kylucienne

Based on forecasts of potential contracts, the CEO of Kibby and Strand is considering an option to lease the building next door, but he has concerns there may be some slack in current production capacity that could be utilized, negating the need for the addition space. There are also some newer technology cutting and sewing machines available with higher capacity the company could purchase, but they are expensive. So here are the CEOs options: Do nothing to increase production, but the downside is lost contracts.
Lease the building next door, then expand production by purchasing the same technology cutting and sewing machines as the company has now.
Try to squeeze more production out of the current production department setup. This may require overtime pay, and would definitely increase the maintenance costs on the current machines.
Replace all the machines in production with newer higher capacity machines and remain in the current production space.
How do you decide which option to select without reliable and valid data on the current production department? You can’t, and that is the CEO’s dilemma.

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Based on forecasts of potential contracts, the CEO of Kibby and Strand is considering an option to l...

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