Muenster Pump Case Study

Muenster Pump Case

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Major facts about Muenster Pump Company

The company has been manufacturing high agricultural equipments (Pumps) for more than 40 years. Muenster Pump Company is a small firm which is located Midwestern city of Muenster. It’s the leading employing firm in the city and also it’s managed by Emil Dorf grandson Bob Dorf. There is a cordial relationship which exists between the management of the firm and legal officials in the city. Since the inception of the business, it has managed to be self-sufficient from its own operations. Terri the purchasing manager of the firm is a cousin to Bob who graduated from State University although she has worked for a manufacturing company in southern west. Terri the purchasing manager is an aggressive individual during the purchase process. With outsourcing casting housing the firm will reduce some of its operating costs which are fixed, (Burt et. Al. 2010).

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Major problem

The company is experiencing huge losses on operational cost due to the cost producing casting housing. Should the company outsource the casing pouring? The major problem with the company is whether to our source the casing pouring or to continue manufacturing. Should the company outsource and produce equipments which are of low quality. Another main concern is that if the firm outsources some production materials, the cost per production will reduce but similarly the quality of those equipments will gradually decrease. As long as the company wants to remain in the market, it should not outsource materials from other sources even if they are offered at cheap prices, (Burt et. Al. 2010).

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If the company stops making their own housing, workers who work in the foundry will have to leave the firm simply because there is no other place in the firm they can work. When the firm makes its casting housing, it incurs a great loss whereby it increases its operational cost. One big question that the purchasing manager...