Carlos Cavalas, the manager of Echo Products’ Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 3600 units during the year, but by September 30 only the following activity had been reported:
The division can rent warehouse space to store up to 1000 units. The minimum inventory level that the division should carry is 50 units. Mr. Cavalas is aware that production must be at least 200 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 1500 units per quarter.
Demand has been soft, and the sales forecast for the last quarter is only 20,800 units. Due to the nature of the division’s operations, fixed manufacturing overhead is a major element of product cost.
Consider the division managers' performance is evaluated based on division level profits
Identify all stakeholders. Consider what is at stake for each stakeholder. What is behind each stakeholder's perspective and motivations? Does one stakeholder's perspective carry more weight than others? Briefly explain.
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