A manufacturer is trying to design the next generation of turbine engines for je

Question

A manufacturer is trying to design the next generation of turbine engines for jet airplanes. The company is divided along functional lines. Engineering designs the engine, production manufactures it, and finance figures out how much to charge for it. The engineers invented a radical new design that used hollow fa blandes. The award-winning design used less fuel than conventional engines, but the hollow fan blades were very difficult to build. When the Finance Division computed the marginal cost of an engine, it discovered that the new engines were much more expensive than rival engines, even accounting for the expected fuel savings. No one purchased teh engine. How would you make sure that this problem does not recur?

Explanation / Answer

The finance department should get the cost of manufacture before the production starts and also get the fuel savings from the engineers. Compute the savings before production and only build if the savings are greater

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