Special Order Decisions and Capacity Issues
Suppose instead that the capacity of Robot Bits is 100,000 units and projected sales to regular customers this year total 94,000 units. Does the quantitative analysis suggest that the company should accept the special order?
What additional qualitative issues, in this case of a capacity constraint, might RobotBits consider before finalizing its decision?
- What will be the effect on the regular customer(s) that do not receive their order(s) of 2,000 units?
- What is the effect on the company’s reputation of leaving orders from regular customers of 2,000 units unfilled?
- Will any of the projected costs change if the company operates at 100% capacity?
- Are there any methods to increase capacity? What effects do these methods have on employees and on the community?
- Notice that the small incremental profit of $1,000 will probably be outweighed by the qualitative considerations
