Van Zhant case study.docx

Van Zhant case study.docx - Ashton Villeneuve Case Study...

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Ashton Villeneuve Case Study Week #5 Van Zandt Technology is competing against three other companies for a contract with the U.S. Department of Defense. The contract is regarding specialized individual data storage devices (thumb drives). The U.S. Department of Defense requires a minimum bid of 600 drives per day. The contract will be given to the company who bids the highest amount per day. If the company fails to reach their original bid amount, then they will be fined $5,000 each time. The company cannot inventory the products, so they are forced to send what they manufacture to the Department of Defense each day. Van Zandt, on average produces 635 drives per day with a standard deviation of 40. Van Zandt believes that they can profit $3.80 from each drive produced when sold for $23.50 each. The company will only be willing to enter a contract if it can profit at least $1,000 per day. The goal of Van Zandt is to come in with the highest bid when compared to its competitors, but be careful to not exceed reasonable manufacturing capabilities.
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