Essay by VenkiUniversity, Master'sB+, October 2014

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Fabtek is an industrial titanium fabricator. The company is facing issues like poor deliveries and capacity constraints. The company has a certain amount of pre-booked orders for the coming fiscal year. On top of these, the company has the option of choosing from 4 different orders. The company also has to take into consideration the views of different stakeholders (Marketing, Operations and Finance) while making this decision. What follows is an analysis of the different options against these cumulative criteria. Final recommendations have been presented on the basis of this analysis.

Current issues

Late Deliveries of finished products due to capacity shortage

Reduced working capital due to late payments

Higher the complexity of the job, more Is the delay

Lack of skilled resources especially in welding which is the core competence of Fabtek

Fabtek is being pulled into price competition by its competitors, not able to command a higher price because of its specialization in complex welding

The fabrication employees want technically challenging jobs whereas marketing prefers simple orders that be repetitively done

The 4 Options


The price of the deal is $6 million and will be the biggest order Fabtek has received

Refco will pay 20% of the labour and material costs for every 25% project completion

Refco has had a long standing relationship with Fabtek and has been its biggest customer but has recently faced issues with delivery delays


Pierce Pike employed Fabtek pretty late for its contracts; till then, it had been awarding contracts to Fabtek's competitors.

Request for pressurized reactor from Pierce pike to Fabtek

The price quoted by Fabtek was $3.9 million on the job

There were concerns whether Fabtek could do the job in hours expected

Reactor involved some unusual fabrication in which Fabtek was inexperienced

Pierce Pike was apprehensive of...