🚀 go-pugleaf

Colleagues:

These are the responses to the Edsel survey:

$-0-
 $-0-
 $-0-
 $-0-
 $15,000
 $-0-
 $10,000
 $8,000
 $-0-
 $-0-


These are some Excel function calculations on the responses:
$33,000.00  Sum (Total)
10 Count
 $5,500.83  Mean
 $-0-    Median of All responses
 $10,000.00  Median of Yes responses
 $-0-    Mode of All responses

The highest offering price, $15,000, will not cover costs of production and
distribution.  If this were a more carefully constructed survey, a "valid"
one as some of you suggested, it would point to a production-line shutdown
decision not a production decision.  And, of course, the TQM in Serv & Mfg
is not a reasonable target market for the Edsel.  The opposite might be true
though?

As another alternative, some firms have hand-built out-of-production
automobiles--the Triumph TR-6 (British) for example.  Typical costs have
been 1.8 to 2.5 times production versions.  The TR-6 has roughly one-third
the metal (frame, engine, body) as the big guy (Edsel), so this won't work.

The things I mentioned in a previous post (costs for current safety and
environmental
requirements, losses on high-mileage cars needed to offset, delivery, taxes,
a product liability set-aside, plus many more) would go into a spread like
the one at:
http://members.tripod.com/~Ray_Martin/DCF/B-MTempl.gif
Most large firms do it this way or something quite similar.

The tradeoffs within this single, greatly simplified spread are almost
imponderable.  Still they must be pondered and decided.  Rejection is a
decision.  Doing nothing or delaying is likewise a decision, since
competitors are considering the same things.

Most decisions are necessarily subjective, though heavily augmented with
quantitative analyses.  Consumer preferences must be converted to sales
projections.  Recall 200K first-year estimated sales for the Edsel versus
110.8K total produced over three years.

Where taxes are heading is a biggie.  Labor costs.  Not salaries, costs.
All these things are largely decided outside the firm, increasingly in
Washington, D.C.  Still they must be estimated.

Product liability is probably a growing component.  And yes, trades must be
made between "safety" and other things.  The vehicle that was perfectly safe
(or near so) for the occupants, would be perfectly unsafe for others around
it.  Total product liability would increase.  The world is full of difficult
choices like this one.

Conclusion:  Need both.  Can't put this decision on autopilot.

Ray Martin
RMartin@texas.net

P.S. I pose a question to you on the list?  What is the potential for
graphic surveys relative to text-based?