Your Competitive Intelligence team reports that a wave of product liability laws

Question

Your Competitive Intelligence team reports that a wave of product liability lawsuits is likely to cause Chester to pull the product Cozy entirely off the market this year. Assume Chester scraps all capacity and inventory this round, completely writing off those assets and escrowing the proceeds to a settlement fund, and assume these lawsuits will have no effect on any other products of Chester or other companies. Without Chester's product Cozy how much can the industry currently produce in the Core segment? Consider only products primarily in the Core segment last year. Ignore current inventories. Figures in thousands (000). Select: 1 9,564 7,385 5,090 8,364 4,072 10,180 8,585 Production Information 2nd Auto Shift & mation Capacity Unit Primary Units Inven Age Pfmn Size Material Labor Contr. Over- Next Next Plant Name Segment Sold tory Revision Date Dec.31 MTBF Coord Coord Price Cost Cost Marg. time Round Round Utiliz. Aft AbleNano 1,785 Acre Core 1,596 0 6/15/2020 1.521500 12.2 7.8 $30.00 $9.49 $7.56 43% 7% 6.0 1,600 106% 7/1/2020 1.423500 13.7 3.4 $35.00 $12.07 $10.71 35% 97% 5.5 1,128 195% 914 131% Adam Thrift 1,096 192 5/14/2020 2.119500 9.3 10.7 $25.00 $7.03 $6.00 47% 0% 6.5 1,330 90% 27 Elite 1,488 7/1/2020 1.424500 16.6 6.3 $39.00 $12.33 $9.68 43% 32% 5.0 Baker Nano 1,903 430 9/12/2020 1.323000 15.1 2.4 $34.00 $13.04 $6.54 41% 87% 7.0 1,150 185% 850 198% Nano 1,407 314 8/12/2020 1.423000 15.5 2.1 $37.00 $13.28 $5.80 46% 22% 7.0 1,150 121% Bold Elite 1,691 363 8/20/2020 1.325000 18.0 4.6 $37.00 $13.83 $5.89 44% 27% 7.0 1,300 126% Bead Elite 1,750 122 8/20/2020 1.625000 18.2 4.9 $34.00 $13.82 $6.63 39% 100% 7.0 Bid Cake Thrift 2,123 144 5/23/2020 2.717000 9.6 10.4 $15.00 $6.69 $1.43 44% 28% 10.0 1,642 127% Cedar Thrift 2,146 171 4/29/2020 2.717000 9.8 10.2$15.00 $6.82 $1.33 42% 6% 10.0 1,842 105% cozy Core 2,096 207 12/13/2020 1.618000 12.3 7.0 $23.00 $9.03 $4.64 40% 67% 8.0 1,200 165% Coat Core 2,033 192 12/13/2020 1.620000 13.0 7.5$25.00 $9.64 $4.38 43% 36% 8.0 1,400 134% Daze Thrift 1.434 154 12/20/2019 3.214000 9.3 10.7 $15.00 $5.93 $1.24 48% 0% 10.0 1,250 71% Dell Thrift 1,620 181 12/7/2017 4.116000 10.2 9.8 $17.00 $7.14 $1.24 43% 0% 10.0 1,600 87% 950 146% 950 109% Dune Core 1,594 133 12/13/2020 1.016000 12.2 7.6 $19.00 $8.63 $4.32 31% 52% 8.0 1,050 151% Dart Core 1,806 124 12/13/2020 1.016000 11.9 8.0 $20.00 $8.38 $4.54 36% 88% 8.0 1,040 186% Dixie Nano 1,367 237 12/20/2020 1.018000 14.4 2.6$28.00 $11.83 $5.71 36% 47% 7.0 Dot Elite 1,069 227 12/20/2020 1.020000 17.8 5.4 $34.00 $12.62 $5.17 46% 11% 7.0

Explanation / Answer

Answer:

As there is a lawsuit aginst Chester on Cozy brand, it will cease to produce and shall pull out the entire range from the market. In that sense, we assumed that no new product line shall be launched by any competitor and existing capacity across all the competitors shall remain at the current level, the maximum production capacity of industry under given conditions and data available shall be 10,180 units.

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