Question

Imagine that you are the engineering manager for Ellery Manufacturing, Suite 110 - 19433 96th Avenue, Surrey, British Columbia, Canada V4N 4C4. http://www.ellerymfg.com

Your company has won a very large contract to manufacture parts for a gas pipeline company located in Alberta. In order to meet the deadline set by your client, you need to purchase a new manufacturing machine (a special purpose lathe). You convinced your employer to purchase the new machine from a company in China: Zhengzhou Timeway Machine Tool Co., Ltd., 5-1-16,S/W Zone, North Circle Sangyuan Road, Zhengzhou, Henan, China. Similar machines can be found in Canada and the United States, but they are not easily available and cost would be much higher.

When the equipment, costing US$220,000, arrived yesterday, you discovered that the equipment does not suit your company's needs. You determined that your company would have to spend about US$23,000 to modify the equipment to meet your particular needs and it could take several weeks to complete the modification.

Alternatively, you could ship the machinery back to the supplier (for about US$5,000). However, you would then have to locate another machine from another supplier, order it, have it sent to you, and install it. This would put your company behind schedule.

You look again at the description of the control unit which you saw on the company's website, and realize that it doesn't adequately describe the equipment's specifications. Perhaps you made a mistake in not looking more carefully at the specifications, or perhaps the website is not accurate. (This may be due to the language barrier and the lack of details presented on the website.)

Write a letter (to be faxed or e-mailed) to Xie Xiaohua, Export Sales Division. You must first decide what is the best solution for the problem, then explain the solution clearly and concisely. You are responsible for solving the problem quickly and efficiently. You need to save your company money, but you also want to make sure your company can complete its work within the deadlines agreed on with your client.

You can make up other details that you would know if you were in the situation described above, such as the equipment's exact name, what it does, when it was ordered, and when it arrived at your plant. You can also check the hyperlinks to find out more about your employer's company and the supplier's company.

Do a strategy analysis (SMART or CAP) before you begin and write the letter as if your job depends on it. You aren't required to show your analysis for this assignment, but I'll be able to determine, from your letter, whether you've done an adequate strategy analysis.

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