Case Name :      Mega Corp.

Authors :           Donald J. Lecraw

Source :             Ivey Publishing

Case ID :            97G009

Discipline :        Operations Management

Case Length :    09 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In 1994, Mr Olano, special projects manager of Mega Corp., must make a recommendation to Mega’s owner, Mrs. Lim, about Mega’s investment in a television production facility at Clark Special Economic Zone, the Philippines. Initially the investment was to have been Mega’s venture into being an OEM television manufacturer, sourcing parts and selling the output on its own. Recently, however, Aiwa and Mega have had negotiations about the plant becoming a sole supplier for Aiwa’s new initiative into television production. Under the arrangement, Mega would assemble televisions for Aiwa from parts either sourced through Aiwa or sourced on its own–if these parts were less expensive yet met Aiwa’s standards. Mega’s profits would be about $2 per unit plus 50% of any cost saving on the components it sourced.