Activity for all groups
Case Study No.1 - Guns:
General Braveheart sat pensively at his desk. His subordinate staff at the Directorate of
Production and Procurement had noticed that the General had been in this mood ever
since the new requirement for purchase of 200 self-propelled light guns was projected to
him last week. He had been unable to make up his mind whether to order our own
ordinance factories to manufacture this gun or to purchase it from ‘Mitra Desh’, a long
time arms supplier to India.
Suddenly the General’s face lit up, and he said “Hasn’t Colonel Brightspark recently
joined our Directorate after finishing his M.Tech (Management) from IIT, Delhi? Please
send for him.”
As soon as Colonel Brightspark was seated, the General opened the topic “You know
about the requirement of new guns for the Army. I have had some data collected on the
costs involved in various options (See Case Study), but I still cannot make up by mind
which option to choose. Study the data carefully and come back to me with your
recommendations by the end of this week.”
The Proposal Regarding Acquisition of
Self-propelled Guns for the Indian ArmyRequirement
- Total quantity required 200 guns
- Delivery time 4 years
Proposal Number 1
- ‘Mitra desh’ had proposed sale of guns of India. The details are as under:
(a) Costs
(i) Cost per gun at factory premises $ 0.6 million
(ii) Freight and insurance charges 5 percent of cost
(iii) Training of users Rs.50 million(b) Mode of Payment
(i) Cost of gun, freight and insurance: to be paid in three equal
installments in dollars. The first installment to be paid immediately
and thereafter every one year.
(ii) Cost of training: to be paid in rupees after two years.© Additional Information