Clear Hear Scenario
Clear Hear, a cell phone manufacturing company that operates tow production line. Big Box a telephone service provider would like Clear Hear to manufacture 100,000 cell phones that will be delivered in 90 days.   Lisa Norman, the production manager for Clear Hear has excess capacity of 70,000 cell phone units over the next three months, therefore, this will be a bonus for Lisa, because she needs to run the factory at capacity, total factory profitability is her goal.   Kendra Sherman, the development specialist has secured the 100,000 cell phone order; however, Big Box will not pay more than $15 for each cell phone which makes the deal less interesting to Kendra Sherman, because the cell phones are based on $20 per unit Alpha model.
Clear Hear operates two production lines; the Alpha and Beta. The Beta cell phone has additional features, and sells for $30, and the cost to produce the Beta cell phone is more. The Original Equipment Manufacturer (OEM) has experience manufacturing cell phones; therefore they are convinced that they could produce up to 100,000 units in a short notice, but the cell phone performance would be identical to Clear Hear’s product at $14 per unit which is nonnegotiable.
Clear Hear goal is to secure the deal with Big Box, and make a profit, because Big Box will not pay more than $15 for each cell phone, and the cell phone are based on $20 per unit, which is a ($20-$15) a $5.00 less or the nonnegotiable price ($20-$14) a $6.00 less per unit. Clear Hear values are to keep our employees working, provide our customers with products on time and that reliably meet or exceed their expectations, and treat our business partners the same as we want to be treated.   Lisa is concerned with profitability, but the values are important to her as well.

Clear Hear Opportunities
There are several opportunities that Clear Hear can review. Clear Hear could refuse to fill the order for Big Box and not earn any profits. The Original...