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Wriston Manufacturing Corporation

Solution Id Length Case Author Case Publisher
2829 1372 Words (5 Pages) Janice H. Hammond Harvard Business School : 698049
This solution includes: A Word File A Word File

The case discusses the various challenges that the Wristron Manufacturing Company faces. Sales of the company have been declining due to the rise in competition and the change in the dynamics of the market. There is high pressure on the management, which is focused on turning the company around and returning its financial performance. The case discusses the task assigned to the management team to analyze the potential market risks and the situation of the company and develop strategic decisions. There are various strategic options presented in the case of Wristron Manufacturing, and it also presents the issues faced at the Detroit plant. The Detroit Plant is considered to be a less efficient plant, and the management is considering whether to shut the plant or not. Differences in the overhead cost of different plants are also shown in the case, which enables us to depict the company's performance.

Following questions are answered in this case study solution:

  1. Why do overhead costs (Exhibit 2) vary so greatly from plant to plant in Wriston’s manufacturing network?

  2. Why have managers in the Heavy Equipment Division underinvested in the Detroit Plant?

  3. What should Richard Sullivan do with the Detroit Plant? Justify your recommendation.

Case Study Questions Answers

1. Why do overhead costs (Exhibit 2) vary so greatly from plant to plant in Wriston's manufacturing network?

Exhibit 2 of the case study represents the overhead costs which are associated with the Wriston Manufacturing Corporation, and after viewing the data, it can be deduced that the costs seem to vary from plant to plant in the company's manufacturing network. Overhead costs are determined to be the expenditures that are incurred by any business for running it. However, they are never linked to the direct costs of production. Overhead costs are considered can be considered as sales, administrative, repairs, labor, etc. The manufacturing network of Wriston possesses characteristics that are unique and are based on different product lines that categorize the plants, e.g., brakes, axles for vehicles on the highway, and axles for vehicles off the highway. For example, the Lima plant is responsible for the production of the off-highway axles, which is a complicated process that can add to the overhead costs. These product lines are considered to have various product families, and the production of each plant is one or more of them and is centered on factors like production, volume, replacement or prototype product categories. 

The location of the plant can be considered as one of the reasons that can lead to the difference in overhead costs. Plants that can be located in various regions with higher taxes can contribute to higher overhead costs rather than the ones situated in locations that are favorable. Another reason could be the equipment and technology since the equipment that is older may require maintenance costs that can be high, while advanced technology may require the need to perform research and development along with training that can lead to higher overhead costs. Furthermore, within the same product family, there can be variations in the products, which may need a different setup for tooling and machine operations or fixtures that are distinct for assembly operations. These variations are specific to each plant and are based on unique features required by customers.

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