Case Name :      TenAlpina Tools: Product Expansion

Authors :           Alfred Nanni, Paul Juras

Source :             Babson College

Case ID :           BAB278

Discipline :        Accounting

Case Length :    06 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Giulia Ferrato, a recent MBA graduate, has developed a high quality piton, a tool used in mountain climbing. Owing to the security of a customer’s offer to guarantee a significant level of demand for a two-year period, she agreed to take over the forge needed for production. She is now trying to decide whether or not to introduce a new product line, a wall hammer. Some of the current capacity can be used to make this product, but its manufacture would incur some new costs. A move away from offering only a single product line also raises the issue of cost allocations.