96%(23)22 out of 23 people found this document helpful
This preview shows page 1 - 7 out of 27 pages.
Tenalpina Tools:The Entrepreneur’s Dilemma
Background of the Study•Giulia’s internship helped her develop the idea that led to her own business – the piton•She managed to design a piton made of titanium that weigh significantly less than the standard steel alloy product.•She also contracted a company to do the drop forging, an integral part of the production process. •Her single customer offered her an exclusive supplier arrangementwith a higher demand. •This may not be possible as her contractor was already planning to close his business. Nevertheless, the contractor offered her to buy and operate the business.
ProblemStatementWhat should Giulia Ferrato, owner of Tenalpina Tools, do in order to achieve profitability and business growth?
Areas of Consideration•Point of view: Giulia’s father •The original trial order: 1,000 units•Retailer price is at $11 per unit with shipping costs absorbed by the retailer•Cost of drop forging for 1,000 pitons is $9,000 or $9 per unit. Her orders were entertained due to the excess capacity of the contractor.•Cost of titanium alloy bars is $1.45 per unit•Total cost is $10.45 per unit with a gross margin of $0.50 per unit