CITATION FIX

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PRIORITIZEFORDECISIONMAKINGASSIGNMENT.pptx
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Bottling Equipment

Clarifying the Decision-Making Process

Walter Jofre

GOALS

To increase Market shares 7-10% over 2 years.

Diversifying products offered. 1 new product by end of fiscal year.

Earning recognition for best green practices.

Being known as community and family orientated.

Options and Risks

1st option: Top-of-the-line equipment- puts out large capacity, little maintenance, double the team (9 bottling

employees and 2 assistant maintenance workers); extensive training required

Risks: high initial cost in machinery, hiring new personnel and time to up-skill all employees

2nd option: Middle-of-the-road equipment- medium capacity output, hire a few extra employees (7 bottling employees); some training required

Risks: maintenance costs are high; long term impact on cost and limited growth

3rd option: Low-end equipment- least output, fewer employees (2 bottling employees and no assistant maintenance); no training required; maintenance cost is moderate

Risks: layoffs would likely be on your team; least opportunity for growth; lowest output

4th option: Refurbished machine- medium capacity output. No need to hire new employees; some training is required

Risks: maintenance cost is extremely high, refurbished machines break down frequently, capacity may be affected by down time

Walter Jofre

Owner: Main concern is cost.

Board of directors are mainly focused on high capacity; however, they are concerned with cost and ability to fundraise

Brewmaster: would like high capacity but is mainly concerned with straining the team; prefers lower human capital

Maintenance Manager: main concern is maintence; prefers lower human capital

Positive Impacts

● TOP OF THE LINE: This option allows for the most company growth! This equipment has the highest output and maintenance costs are very low. In the event of a breakdown, the cost would be minimal compared to any other option. Over time NHM would develop a highly skilled team and operate at maximum output. This is the long-term option and gives NHM the technology advantage over our competitors. NHM would have years of growth and not have to reinvest in equipment for many years down the line.

● MIDDLE OF THE ROAD: Minimal training and hiring would be required for this option. The average cost of this equipment would mean manageable fundraising. This machinery has a medium output. While it doesn’t allow much growth, it would provide a consistent level of production.

● LOW END: This option is the least expensive for a new unit. Fewer required employees to operate the equipment and lower capacity will mean less labor costs. In the event of a break down, the costs to repair would be affordable and not require additional fund raising or delays.

● REFURBISHED: This is the lowest cost option for machinery. No hiring would be required, and the need for training would be minimal therefore production should not be affected.

Walter Jofre

(Potential) Negative Impacts

● TOP OF THE LINE: It could take significant time to get the team up to speed with this equipment. NHM would need to hire, and extensive training would be needed for new and existing staff which may cause delays in production. However, if revenue spikes as expected these are pain points NHM will be faced with regardless of now or later. The initial financial results may not be favorable which could impact fund raising however, over time the Company would overcome this challenge, reach maximum output, and see the return on investment.

● MIDDLE OF THE ROAD: As NHM grows this machine may not have the capacity to increase production to the levels of demand. This could result in the need to reinvest in top-of-the-line equipment within a year or two. This would put us in the same position as the 1st option. In the event of a break down repairs would be very expensive and depending on the financial state of the company at the time could financially strain the business and mean additional fund raising.

Walter Jofre

Decision-Making Process

The process to ensure the best decision was made for the Organization and Team. (Knovel, N.D.)

Walter Jofre

Identifying goals Understand the decision that needs to be made and staying in line with company goals. Gathering information Collect and review all the data and facts. Identify the options Review all your options and see how each could cause an impact to the company. Pros & Cons Look at your pros and cons and determine if each option supports the goals of the company. Choose the Best Option Choose the option that has the most pros with meeting the company goals. Make the Decision Select your final choice. Examine Your Decision Does your final decision meet the purpose and goals of the company.

Things to consider based on stakeholder’s interest: high capacity; lower human capital; low maintenance and cost. While the Low-end and refurbished options appear to be less expensive and have lower human capital hey also offer little to zero growth. Keep in mind, our organizational goal is to increase shares within two years; therefore, the best option would be the Top-of-the line equipment.

How the Decision Supports Company Goals.

ORGANIZATIONAL GOALS

Walter Jofre

Increase in market share 7-10% over 2 years.

Diversify product. 1 new product by end of fiscal yr.

Recognition for best green practices.

Known as community and family orientated.

Top of the line

Middle of the road

Low End

Refurbished

Alignment with Organizational Goals

Goal: to increase market share 7-10% over 2 years: with the maximum output this equipment will have the capacity for overgrowth. As the company continues to grow the market shares will follow grow as well. Not only will market shares increase by at lease 7- 10% over 2 years, but it can also continue grow long term.

Goal: Diversify product offering by creating at least one new product by end of fiscal year: With added staffing and support NHM will be able to expand it’s products like never.

Goal: Recognition for best green practices: With the higher output it would be the best opportunity for recognition of our green initiatives. New opportunities with green vendors!!

Goal: Community and Family Orientated: Already a family orientated company and will continue being this way. Company expansion will bring new employment opportunities and our community presence will grow stronger.

Potential Impact

The following may be impacted by the final decision.

The Brew master and his team may experience some moderate growing pains with hiring and training however, there are methods to help alleviate pain points such as applying group training.

The Board of Directors may not see favorable financial gains initially. However, the reduction in maintenance and repairs will offset the cost along with increased revenue over the next 1-2 years.

The Owner shall see a noticeable reduction in building repairs and maintenance which will help offset cost of equipment. Over the next 1-2 years the cost of equipment will be recovered by the increase in revenue.

Adherence to Organizational Ethics The decision to purchase top-of-the-line machinery will support and help keep NHM as a strong and ethical company because of the following reasons:

Increasing our output will attract new customers. This will allow the company to become more engaged with the community through our customers, employees, community events, and local government.

By hiring more employees, it will provide new jobs and expand a positive work environment in the community. This will also create more job security for those already employed.

Increasing output will increase revenue. This will give NHM more opportunities to give back to the community through new jobs being created and potential charitable contributions.

Walter Jofre