Toyota Corporation Production

The key drivers to the success of Toyota before the crisis Production and operations management The actual production and delivery of products including the operational management was essential to the success of Toyota. The company’s product design incorporated product process, planning and implementing production processes as well as acquiring and organizing resources.Advertising We will write a custom essay sample on Toyota Corporation Production specifically for you for only $16.05 $11/page Learn More With this broad scope, the production and operation functions had a fundamental role in the company’s ability to attain the set goals and objectives before the crisis. Besides, the operations managers were familiar with the concepts and issues that surrounded the functional area. The basic performance objectives that pertained to all operations including quality, speed, flexibility, dependability and cost were well planned and realized. Thu s, Toyota Company was successful in meeting these objectives through its production and operation function. Over decades, Toyota operations were streamlined thus resulting in the popularly known Toyota Production System (TPS). The TPS was conceived when the company realized that producing massive quantities from limited product line to achieve maximum economies of scale led to flaws. Its major objectives were to reduce cost, eliminate waste and respond to the changing needs of the customers. Under this system, quality was considered as doing things right via the provision of error free products that satisfied the targeted customers. Conversely, Toyota vehicles were among the leading brands in customer satisfaction. Voting Toyota as the best annual vehicle by most marketplace reviews indicated that the company had an appealing reputation globally. Due to good quality, Toyota success had kept growing and in 2009 the company was the best worldwide. Moreover, Toyota was keen on producin g quality vehicles with many technologies that improved the performance of the vehicles. The TPS method applied during operation focused on the reduction of complications via the use of undersized and uncomplicated machineries that were elastic and strong. On the other hand, rescheduling run and outline to promote plainness enhanced the pace of manufacturing and assembling Toyota vehicles.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Another driver to the success of Toyota was dependability, which implied timely working to ensure that customers got their products within the promised time. Toyota had included just in time manufacturing method comprising of experienced employees who worked in cooperation while the Kanban management assisted the team in delivering manufactured goods and services as guaranteed. Every worker, mechanical expert, and director was concerned with the improvement of value and effectiveness of Toyota vehicles. The organization admired making adjustments while developing receptive and supple structures that helped in dealing with the changing trade settings. Inside the company’s production area, Toyota Corp had the ability to attain large-scale flexibility whilst manufacturing tiny product bunches that hardly generated any value or output loss. Team working in TPS From this case, the corporation emerged to be among the few vehicle producers in the automobile industry, which constantly generated profits during and subsequent to the 1974 oil disaster. Due that crisis, producers that rivaled Toyota envied and visited the company in order to find out the reasons behind Toyota’s triumph in the declining souk environment. The company’s discovery was the unique team working of the Japanese who utilized scientific management rules. Japanese team working was very dissimilar to that which became prominent in the American and Europea n companies in the 1960s and 1970s. The Japanese team working usually referred to as Toyotaism implied a certain form of work organization that emphasized on lean production. The technique combined the JIT creation methods; dilemma-resolving groups, job consistency, as well as influential first-line administration and nonstop but succeeding Toyota process step up. All these drivers contributed to the success of Toyota before the crisis. The JIT manufacturing scheme attempted to accomplish the clients’ requests devoid of generating any waste products while offering faultless value. Organization and scheduling of various Just in time approaches took into consideration draw arrangement, staged forecasting, Kanban organization, flow harmonization, and assorted reproduction development. Besides, Toyota was one of the biggest players in transforming Japan into being a kingpin in automotive production. Other companies which had adopted the company’s production system increase d efficiency and productivity. Thus, Toyota was developing over the years since the industry’s analysis of the best plant winners showed that the company used lean manufacturing techniques extensively.Advertising We will write a custom essay sample on Toyota Corporation Production specifically for you for only $16.05 $11/page Learn More The primary causes of this crisis The Toyota Corp experienced a crisis in the fiscal 2010 subsequent to its vehicles being involved in industrial accident. The quality of Toyota started to fall impulsively despite attaining its 2010 Global Vision. With the potential fatal defects, it was essential for the Corporation to stop its manufacturing in several areas and recall back cars ranging to more than a million. The TMC crisis arose primarily due to the inability of the company to manage its quality given the hurried expansion and unique production philosophy. Besides, Toyota’s poor quality production increa sed following the Second World War that left the company with competitive disadvantage. Conversely, Toyota Corp was suffering from financial problems while struggling with quality problems. In a war- desolated economy, Toyota considered it necessary to exploit low costs while producing a wide range of vehicles. Nevertheless, the competency that drove the American giant car manufacturers was inappropriate for car fabrication in Japan thus generating crisis. The American techniques highlighted large consignments made on specialized machines. Hence, the crisis augmented due to little capital meant for business venture after the warfare. That is, the system proved not to be cost-effective particularly for low-volume demand. The crisis also came due to surplus rework needed during the production of faulty products and surplus inventory of finished products, work in progress, and raw materials. In addition, the deprived product and instrument design resulting into the erroneous over-produ ction and overindulgent movement of products past the necessary production procedure also caused the crisis. Finally, the pointless waiting of tools and personnel for the subsequent production and over manufacturing ahead of demand are some wastes that increased the Toyota crisis. The adjustment of Toyota after the crisis In case of a major crisis, Toyota should adjust by shutting down its production or operations in areas that were affected most and particular products that underperformed in such a situation. For example, during the 2008 financial crisis the company closed down its production of large vehicles for some time and switched the factory that produced SUVs into that which produced Priuses. This adjustment was also evident during the Japanese earthquakes when Toyota suspended its operation in plants within the affected region. The company should also respond by eliminating some of its workforce especially the temporary workers in the affected facilities. This included ext ending leaves and making such employees work on part time basis. Toyota may similarly minimize the remuneration for plant managers and reduce bonus for every salaried workforce.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Since the crisis affected Toyota employees and customers directly, the company should ensure that the stakeholders are aware of the changes. When crisis ends, Toyota should establish a committee that takes the opinions of employees and customers in the affected areas in order to determine the most appropriate crisis adjustment strategies. The committee should be responsible for devising methods to explain the reasons for the adjustments and the benefits they have for the stakeholders. The employees should be given options to extend their leaves or get assistance to secure other jobs. Through this strategy, Toyota will maintain good relationship with customers and employees affected by the crisis. This essay on Toyota Corporation Production was written and submitted by user Alyssa Thornton to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

8 ideas for experienced teachers who want a second career

8 ideas for experienced teachers who want a second career Teaching is both rewarding and difficult. There’s a lot to love about the profession, particularly having a front seat to witness students growing and learning throughout the school year. But over the long term teachers can get worn out- and are often overworked for little pay. The good news for experienced teachers is that the profession comes with a number of translatable skills. In addition to particular subject area knowledge, experienced teachers possess excellent public speaking, presentation, and leadership skills, and establish themselves as effective communicators- not just with school-aged populations, but also among parents, colleagues, and administrators. Teachers are also adept at detail-oriented work like editing, long-term planning of activities, and meeting educational goals.If you’re looking to leave the traditional classroom, the skills you’ve acquired as a teacher are can translate to many jobs in varying fields. Let’s look at a few.8 no n-classroom jobs for teachers1. Employee training/HRMany companies offer workshops, new employee training, and orientations, and need someone to run them. These employee training activities require someone with a similar skillset to teaching. Often housed in the HR Department, the presentation and transfer of knowledge in a corporate setting can offer experienced teachers a place to use their communication skills to help employees learn about their company and enrich their experiences at work.2. School administratorWhether in the area of running the day-to-day business of the school or assisting in curriculum development, teaching experience is a boon for any administrative position. From school principals to university registrars, there are a variety of positions that help keep a school running, and most positions require advanced degrees. This is a good position for teachers who are devoted to the educational system, but worn out on teaching in the classroom.3. Residential life c oordinator/Youth organization directorThe organizational skills required to plan a year of lessons and be flexible minute to minute in the classroom translate well to camps, youth organizations, and residential life departments of college campuses. Teaching experience means you will be adept at the long-term planning required in these roles, and familiarity with specific age groups in a classroom setting gives you a leg up, as you must show you can deal with large groups of people and keep them organized and engaged.4. Freelance writing and editingTeachers’ communications skills translate well to writing and editing positions, where they can use their expertise to educate outside of the classroom. Writing offers more flexibility than teaching, but less job security- especially as most writers work on a freelance basis. Editing positions, where a teacher can be called upon as a subject-matter expert to review and offer advice on their topic of knowledge, are another great free lance opportunity.5. Guidance counselorGuidance counselors must have specific knowledge about school-age populations, testing, and school district guidelines, as well as the ability to tap into a student’s motivation. Teachers already know how to do this well. In most cases, guidance counselors need to be licensed, and in some states, they need to have a master’s degree. While this job is very much adjacent to the classroom, as the primary goal is guiding students toward their educational goals, the change from classroom to office is a big one. Even so, you’re still in a school setting so that the career will feel s.6. Academic librarianExperienced teachers fit well into the role of librarian, as they have experience engaging with students while helping them in educational settings. In academic libraries, there are subject librarians with particular knowledge in certain areas (similar to teaching) that help students and faculty find resources to help with their research. Academic librarians often give presentations or build websites for university classes to help them learn how to use library tools. This role requires a graduate degree in library and information science, but for teachers looking to make a career move it can be a great option.7. Event plannerLarge-scale events, from evening receptions to corporate meetings, require a lot of planning over months and need planners with ability to think on their feet to make sure the day of the event runs smoothly. As they coordinate speakers, catering, and venue staff, event planners must be detail-oriented, effective communicators who are comfortable with large groups. While a departure from teaching, running a big event and coordinating all the details requires a similar skillset and can be a new avenue for a teacher looking to embark on a totally different career.8. Teaching outside the classroomEssentially â€Å"freelance† teaching, this option offers educators the ability to set t heir own schedules. Beyond the traditional classroom setting in schools, there are growing opportunities for online teaching or tutoring one-on-one or in small groups. Educators who don’t want to branch out on their own can also work through an agency. For teachers who have frustration with the school system but still have the teaching bug, this route can provide more freedom while still changing students’ lives.

The Strategic Role of Global Information Systems Essay

The Strategic Role of Global Information Systems - Essay Example Introduction The relationship between corporate strategy and information systems functions was not a central interest for the top management of organizations for some time. Information systems were primarily synonymous with corporate data processing and regarded as back-room operations to support the day-to-day operations (Ezingeard, McFadzean, and Birchal, 2007:99). However, the 80s and the 90s saw a growing realization of strategizing information systems for the organization. Interestingly, information systems have been present since the beginning of time, but the integration with information technology is a newcomer to the field. The functions of IT-based information systems have had significant impacts to organizations and people such that only a few (if any) company can afford the risk of ignoring these functions despite the fear and frustrations they evoke sometimes (Currie and Galliers, 2002:76). Some organizations regard information systems as unavoidable to remain in busines s, while others perceive the systems as a strategic opportunity that may proactively identify strategies to gain a competitive edge against competitors. Regardless of an organization’s stance, embarking of investment on information systems proves to be a non-reversible decision. Information technology has become powerful and cheap, and its use in organizations has spread at a rapid rate. Different management levels are using IT-based information systems in contrast to the earlier application at the operational level only. However, more organizations are focusing on improving efficiency and maintaining business effectiveness, as well as strategically manage organizations (Irani, Love, and Hides, 2000:23). The increasing complexity of managerial tasks translated to the complex nature of information systems required: from routine, structured support to unstructured, complex, ad hoc enquiries at the peak level of management. Information systems has the potential to change the way organizations work and the very nature of their business. In the information technology world, there has been introduction of electronic markets, where buying and selling occurs in a matter of seconds, disrupting the conventional distribution and marketing channels (Lacity and Willcocks, 2000:31). The advent of Electronic Data Interchange has not only increased transaction speed but also ensures subscribers of accuracy of information they receive from buyers and suppliers and perhaps reap cost reduction benefits using automated reordering processes. On higher strategic level, an organization may pass information to its customers or suppliers to provide or gain better service. Providing higher quality services to the customers than the competitors may result to the differentiation required to gain a competitive edge on a short term. However, continual improvement to the quality of services offered may enhance the competitiveness of an organization on a long-term basis (Magdaleno et al., 2008:305). However, the unprecedented and rapid change in information technology has profound impacts on IT-based informat

Consumption and its effects on the environment Essay

Consumption and its effects on the environment - Essay Example As members of a family under God, we have to be aware of the environmental decay that is going on because of so-called development. There are many adverse consequences we face because of our use, or abuse, of the environment, and one of these is global warming. Global warming is the biggest threat to our mother Earth and even to our own existence. Our world has gone to the extreme, or, we have excelled in everything. We have invented so many things, we have built wonders and huge structures and buildings never before imagined, and yet we have abandoned proper care for the resources to which we owed our inventions and creations. It is time everyone must be involved in fighting abuse of our environment. Students, artists, workers and everyone should encourage awareness of the environment through art or writing, in school and in our homes. Floods, typhoons, the "el nio" and "la nia" phenomena, global warming, and many other natural calamities are caused by indiscriminate cutting of trees, disposal of garbage and waste, chemicals, factories, and many things. The theme "Consumption and its effects on the environment" can have a broad meaning, but consumption and environment go together. We use our environment, our natural resources for our daily living. can not survive if we don’t make use of the things around us for food, shelter, clothing, and everything for our survival. There is one very interesting about the environment and that is if we know how to take care of it, it replaces itself. Our environment or natural resources do not just disappear from us without a cause, it has the means to multiply. We only have to help in replacing what we have consumed, and not be a tool for its extinction. "Consuming" means taking or possessing, but it doesn't mean throwing away after possessing, and in the process of throwing, we destroy. If we have to throw away because we don't want them anymore, we have to be responsible in disposing of the materials used.

The withered arm Essay Example for Free

The withered arm Essay In Tony Kytes, Tony comes across as a bit of a player. This is because he asks all three women, all of which have had connections with Tony, to marry him, even though he is engaged to one of them; Milly Richards. Tonys attitude to marriage could be that its not really that important to the men of the 19th century, and that getting married is just to say that they are married. This is suggested when Tony is rejected by Hannah Jolliver and Unity Sallet, but Milly accepts again, just for the ability to say that he is married. However, the womens attitude to marriage was mainly that they had to get married for the social status. This is shown well through Millys acceptance to Tony. When Tony asks Milly, she replies with If you like, Tony illustrating how shes not very keen on marrying him after what just happened, but will anyway because she wants to be married. Unity Sallet comes across as an independent woman, which can be mirrored in todays times. She says take her leavings? Not I! , meaning that she doesnt want to marry someone that was rejected not one minute ago. Because she walks away from Tony, this can symbolise her independence because it shows how she doesnt always need a man there in her life. This links to nowadays because some women never marry in their whole lives, because they believe they dont need a man in it. In The Withered Arm, Farmer Lodges attitude to marriage is that marriage is for having children and carrying on the family name. Proof of this is after Gertrudes change from beauty queen to ugly duckling as Hardy describes Farmer Lodges realisation: she had brought him no child, which rendered it likely that he would be the last of a family who had occupied that valley for some two hundred years. This shows my point because it illustrates how he knows that hes it, that hes the end of the line for the Lodge name, and how he isnt very pleased that his wife hasnt given him a child. Farmer Lodge also bases marriage on appearance. This is implied through beauty was contorted and disfigured because it shows how he has fallen out of love with Gertrude ever since her arm had the curse bestowed upon it. Gertrudes attitude to marriage is very much the same of that to Millys in the Tony Kytes. This is because both Gertrude and Milly wanted to be married for the social status. From both characters, its subtle that they only want to be married for the status, but if you look close enough you can find it. Milly says if you want, Tony as though she only wants to marry him for the status and Gertrude says that lad stared at me!, also comes across as though she is happy with the attention she gets from her new marriage. Both stories have varying attitudes to marriage, but they link together sometimes. For example, Gertrude and Millys attitude to marriage is the same. Both stories attitudes link with todays attitudes to marriage because Unitys character doesnt really need a man so dont need to be married, and neither do plenty of woman in this time, and many men dont see marriage as a big deal, which is like Tonys attitude to marriage.

The Impact of Emerging Technology on the Public Sector Essay -- Techno

The Impact of Emerging Technology on the Public Sector The impact of information technology has been tremendous within the public sector. Over the years, the growth and development of technology has caused the public sector to change. One of the most significant changes in technology has been the evolution of the information systems and how their development has reshaped the way the world uses technology. â€Å"It has been just over fifty years since the worlds first programmable computer became operational. It cost millions of dollars to build and processed an unprecedented 5,000 instructions per second. By 1971, Intel was able to pack 25 times that power into a single, two hundred-dollar chip. Today’s personal computers process 400,000 instructions per second and if current trends continue, desktop-computing power will be at 100,000 million instructions per second by the year 2012.† [i] Although the benefits of technology were first realized in the private sector, the public sector has been able to reap some benefits. In addition they have also incurred some of the challenges it has brought. This research paper will discuss the types of technology that are used by the public sector, cost considerations, security and confidentiality issues, the National Public Review and Government Information Technology initiatives and the challenges of training a computer literate workforce. Public Sector Technology Applications Emerging technology is the application of rising or forthcoming sciences to industrial and commercial objectives. These rising and forthcoming sciences have also been applied to the public sector. Technology has impacted the services the public sector provides as well as the internal systems used to support t... ...al, M., (1998) Technology in Government Vol. 5. No. 10., Public Lines up for Service, New York: Columbia University Press Northrop, A., Kraemer, K., Dunkle, D., and King, J. (1990) Public Administration Review vol 5., Payoffs from Computerization: Lessons Over Time, New York: Columbia University Press Reisner, R and Jones-Shearin, C. (1996) Access America Online Magazine, Improve the Public's Access to Government Services-Less Burden more Service www.accessamerica.gov/docs/public2.html {on-line} Thibodeau, P., (1999) CNN.com, Government: US will need 1.3M new IT workers by 2006, www.cnn.com/ting/9907/02/itwirk,idg/index.html {on-line} (1994) The American Heritage Dictionary 3rd Edition, New York, Dell Publishing Thompson, M., (1999) CNN.com, US Miltary Recruits on the Web, www.cnn.com/TECH/computing/9904/27/military.idg/index.html {on-line}

Clearwater Technologies

Clear Water Technologies : A Case Study QTX is a sales support server that allows multiple users to simultaneously maintain their sales account databases. These databases covers contact information, quote histories, copies of all communications, and links to the customer's corporate database for shipping records. The basic QTX package consists of a processor, chassis, hard drive, and network interface, with a manufacturing cost of $500. The package provided simultaneous access for 10 users to the system, referred to as 10 â€Å"seats. Each seat represented one accessing employee. The product line consisted of 10-, 20-, and 30-seat capacity QTX servers. Each incremental 10 seats required $200 of additional manufacturing cost. Yearly sales were at the rate of 4,000 units across all sizes. In initial sales, approximately 30 percent of customers bought the 30-seat unit, 40 percent bought the 20-seat unit, and 30 percent bought the 10-seat unit. Customers who needed more than 30 seats ty pically went to competitors servicing the medium-to-large company market segment.Clearwater set a per-seat manufacturer's suggested retail price (MSRP) that decreased with higher quantity seat purchases, reflecting the customer perception of declining manufacturing cost per seat. Clearwater also saw this as advantageous because it encouraged customers to maximize their initial seat purchase. Clearwater typically sold its products through value-added resellers (VARs). A VAR was typically a small local firm that provided sales and support to end users.The value added by these resellers was that they provided a complete solution to the end user/customer from a single point of purchase and had multiple information technology products available from various vendors. Using VARs reduced Clearwater's sales and service expense significantly and increased its market coverage. These intermediaries operated in several steps. First, the VAR combined the QTX from Clearwater with database software from other suppliers to form a turnkey customer solution.Second, the VAR loaded the software with customer-specific information and linked it to the customer's existing sales history databases. Finally, the VAR installed the product at the customer's site and trained the customer on its use. Clearwater sold the QTX to resellers at a 50 percent discount from the MSRP, allowing the VARs to sell to the end user at or below the MSRP. The discount allowed the VARs room to negotiate with the customer and still achieve a profit. The Upgrade Initially, the expectation had been that the 30-seat unit would be the largest volume seller.In order to gain economies of scale in manufacturing, reduce inventory configurations, and reduce engineering design and testing expense to a single assembly, Clearwater decided to manufacture only the 30-seat server with the appropriate number of seats â€Å"enabled† for the buyer. Clearwater was effectively â€Å"giving away† extra memory and ab sorbing the higher cost rather than manufacturing the various sizes. If a customer wanted a 10-seat server, the company shipped a 30-seat capable unit, with only the requested 10 seats enabled through software configuration.The proposed upgrade was, in reality, allowing customers to access capability already built into the product. Clearwater knew that many original customers were ready to use the additional capacity in the QTX. Some customers had added seats by buying a second box, but because the original product contained the capability to expand by accessing the disabled seats, Clearwater saw an opportunity to expand the product line and increase sales to a captive customer base. Customers could double or triple their seat capacity by purchasing either a 10- or a 20-seat upgrade and getting an access code to enable the additional number of seats.No other competitor offered the possibility of an upgrade. To gain additional seats from the competitor, the customer purchased and ins talled an additional box. Because customers performed a significant amount of acceptance testing, which they would have to repeat before switching brands, the likelihood of changing brands to add capacity was low. The objective of this morning's meeting was to set the price for the two upgrades. As QTX product manager Rob Erickson stopped to collect his most recent notes from his desk, he reflected: What a way to start the week.Every time we have one of these meetings, senior management only looks at margins. I spent the whole weekend cranking numbers and I'm going in there using the highest margin we've got today. How can anybody say that's too low? He grabbed his notes, calculator, and coffee and headed down the hall. From the other wing of the building, financial analyst Hillary Hanson was crossing the lobby towards the conference room. She was thinking about the conversation she had late Number MSRP to VAR Unit Unit of Seats End User Price Cost* Margin** 10 $8,000 $4,000 $500 87 . 5% 20 $14,000 $7,000 $700 90. 0% 30 $17,250 $8,625 $900 89. % TABLE 1 *Unit cost reflects additional $200 for memory capability for each additional 10 seats. **Margin _ VAR Price _ Unit Cost VAR Price Number Original Original Actual Actual of Seats Unit Cost Unit Margin Unit Cost Unit Margin 10 $500 87. 5% $900 77. 5% 20 $700 90. 0% $900 87. 1% 30 $900 89. 6% $900 89. 6% TABLE 2 Friday afternoon with her boss, Alicia Fisher, Clearwater's CFO. They had been discussing this upcoming meeting and Alicia had given Hillary very clear instructions. I want you to go in and argue for the highest price possible. We should absolutely maximize the profitability on the upgrade.The customers are already committed to us and they have no alternative for an upgrade but with us. The switching costs to change at this point are too high since they've already been trained in our system and software. Let's go for it. Besides, we really need to show some serious revenue generation for the year-end repor t to the stockholders. Hillary had not actually finalized a number. She figured she could see what the others proposed and then argue for a significant premium over that. She had the CFO's backing so she could keep pushing for more. From the parking lot, Brian James, the district sales manager, headed for the rear entrance.He, too, was thinking about the upcoming meeting and anticipating a long morning. I wish marketing would realize that when they come up with some grandiose number for a new product, sales takes the hit in the field. It's a killer to have to explain to customers that they have to pay big bucks for something that's essentially built in. It's gonna be even tougher to justify on this upgrade. At least with the QTX, we have something the buyer can see. It's hardware. With the upgrade, there isn't even a physical product. We're just giving customers a code to access the capability that's already built into the machine.Telling customers that they have to pay several thou sand dollars never makes you popular. If you think about it, that's a lot of money for an access code, but you won't hear me say that out loud. Maybe I can get them to agree to something reasonable this time. I spent the weekend working this one out, and I think my logic is pretty solid. Price Proposals Once everyone was settled in the conference room, Rob spoke first: I know we have to come up with prices for both the 10-seat and 20-seat upgrades, but to keep things manageable, let's discuss the 20-seat price first.Once that number is set, the 10-seat price should be simple. Because the margin on the 30-seat unit is the highest in the line, I think we should use that as the basis to the price for the upgrade. He went to a whiteboard to show an example: If a customer is upgrading from a 10-seat unit to a 30-seat unit, they are adding two steps of capacity costing $200 each to us, or $400. $400 /1-0. 90 _ $4,000 to the reseller, and $8,000 to the end user. We keep the margin structur e in place at the highest point in the line. The customer gets additional capacity, and we keep our margins consistent.He sat down feeling pleased. He had fired the first shot, had been consistent with the existing margin structure, and had rounded up the highest margin point in the line. Brian looked at Rob's calculations and commented: I think that's going to be hard for the customer to see without us giving away information about our margins, and we don't want to do that, since they are pretty aggressive to begin with. However, I think I have solved this one for us. I've finally come up with a simple, fair solution to pricing the upgrade that works for us and the customers. He walked over to a whiteboard and grabbed a marker:If we assume an existing 10-seat customer has decided to upgrade to 30-seat capability, we should charge that customer the difference between what the buyer has already paid and the price of the new capacity. So . . . New 30-seat unit $17,250 Original 10-seat unit $8,000 Price for 20-seat upgrade $9,250 It's consistent with our current pricing for the QTX. It's fair to the customer. It's easy for the customer to understand and it still makes wads of money for us. It also is easy for the customer to see that we're being good to them. If they bought a 20-seat box in addition to the 10-seat box they already have, it would be costing them more.He wrote: New 20-seat unit $14,000 A new unit provides customers with redundancy by having two boxes, which they might want in the event of product failure, but the cost is pretty stiff. Upgrading becomes the logical and affordable option. Hillary looked at the numbers and knew just what she was going to do. That all looks very logical, but I don't see that either of you has the company's best interests at heart. Brian, you just want a simple sale that your sales people and the customers will buy into, and Rob, you are charging even less than Brian. We need to consider the revenue issue as well.These people have already bought from us; are trained on our hardware and software and don't want to have to repeat the process with someone else. It would take too long. They've got no desire to make a change and that means we've got them. The sky is really the limit on how much we can charge them because they have no real alternative. We should take this opportunity to really go for the gold, say $15,000 or even $20,000. We can and should be as aggressive as possible. All three continued to argue the relative merits of their pricing positions, without notable success.Jefferies listened to each of them and after they finished, he turned to a clean whiteboard and took the marker. I've done some more thinking on this. In order to meet the needs of all three departments, there are three very important points that the price structure for these upgrades must accomplish: 1. The pricing for the upgrades shouldn't undercut the existing pricing for the 30-seat QTX. 2. We want to motivate our buye rs to purchase the maximum number of seats at the initial purchase. A dollar now is better than a potential dollar later. We never know for sure that they will make that second purchase.If we don't do this right, we're going to encourage customers to reduce their initial purchase. They'll figure they can add capacity whenever, so why buy it if they don't need it. That would kill upfront sales of the QTX. 3. We don't want to leave any revenue on the table when buyers decide to buy more capacity. They are already committed to us and our technology and we should capitalize on that, without totally ripping them off. Therefore, while Hillary says â€Å"the sky's the limit,† I think there is a limit and we need to determine what it is and how close we can come to it.If we assume that those are the objectives, none of the prices you've put together thus far answers all three of those criteria. Some come close, but each one fails. See if you can put your heads together and come to a consensus price that satisfies all three objectives. OK? Heads nodded and with that, Jefferies left the conference room. The three remaining occupants looked at one another. Brian got up to wipe the previous numbers off the whiteboards and said: OK, one more time. If our numbers don't work, why not and what is the right price for the 20-seat upgrade?