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Unformatted text preview: 4-2 East River Manufacturing 1.Briefly summarize and contrast the competitive environment in the pre-1980 era with that of the early nineties.In the early eighties East River Manufacturing had a solid business. They made highly demandable boilers. The demand for their products increased steadily until the 1970’s. The early eighties did not have a steady increase for demand but the demand for the power generating equipment was consistent. In the early 90’s the demand for the boilers was just not there because of the economy. The company had to rely and tap into their replacement parts and components business because the selling of new boilers only made up 30 percent of their sales. East Rivers competitors also felt the same hard ship of the economy and turned to the market of replacement parts. In my opinion East River would have a great lead over competition if they can make, manufacture and design new products that will use different sources for providing the same power.2.What are the problems that plant management has to resolve?•Plant management has to work on creating more effective estimates.•Plant management should find ways for the company to reinvest in the repair and replacements of machinery.•Plant management should implement a new cost system.3.What potential problems may occur between the as-sold cost estimates and the actual contract cost?•In some instances, the actual costs for work performed may be higher than the as-sold estimate, because if the studs are not welded properly, they have to be had welded by an employee.welded by an employee....
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- Spring '09
- Cost Accounting, East River, Plant Management, East River Manufacturing