Dominion Motors & Controls,

Ltd.
Submitted by:- Group 5
Abhinav Sidhu P181A02
Namrata Singh P181A30
Shivangi Lohiya P181A47
Yash Sharma P181B56
Alternatives
1. Reduce the price of DMC's 10-hp motor to that of the 7½-hp motor.
2. Reengineer DMC's present 7½-hp motor to make its starting torque atleast
equal to that of the Spartan 7½-hp unit.
3. Undertake design of a definite-purpose motor for the oil well pumping
market. This ideally would be a basic 5-hp motor with the starting torque
of a 10-hp unit.
4. Attempt to persuade Bridges and Hamilton executives that the
conclusions reached from their test results unduly emphasized obtaining
the maximum starting torque available.
Unit contributions
• Alternative 1: • Alternative 3:
Price of 7 ½-hp motor (P): $1,200 Price of definite-purpose motor
(P): $1,045
Manufacturing cost of 10-hp motor
(k): $816 Manufacturing cost (k): $665
Unit contribution = $1,200 - $908 Investment (Fixed Cost): $75,000
= $292 Unit contribution =$1,045 - $665
= $380
• Alternative 2:
Price of 7 ½-hp motor (P): $1,200 • Alternative 4:
Manufacturing cost of
reengineered motor (k): $790 Price of 7 ½-hp motor (P): $1,200
($867) Manufacturing cost (k): $663.51
Unit contribution = P – k = $1,200 - Unit contribution = $1,200 - 714
$790 ($867)
= $410 ($333) = $486
 Alternatives
Alternative 1:
Reducing the price of the motor will be a feasible option only for a short period. As in the
industry the companies want more of starting torque. So, it will work once the report is
out. People who wanted 10-hp will also get advantage as all those wanted 10-hp will get
it at a lesser price. We should also reduce price because if the report is out at the right
time then the 10-hp stock will not sell. So we need to reduce the price and sell it in the
market.
Alternative 2:
not a profitable idea.
1st way- $790 (cost) - The Company has to lower down its margins. It violates NEMA.
Competitors can also start increasing the starting torque.
2nd way- $867 (cost) - High cost and lower margins. It also violates NEMA.
• Alternative 3:
First mover advantage for the company. The company can attain 60%
market share. Will help company in the long run.
• Alternative 4:
This is not a good idea because we don’t have any ground and statistics
on which we can challenge Bridges’ report. This may result in creating an
ill-will in the eyes of Hamilton and of the entire market as a whole.
Strong bond between Spartans and Bridges