Executive Summary:

Campbell Brother’s are the main source of revenue for the Wald press but due to recession the orders from the Campbell brothers reduces. This created the trouble for Wald press in retaining workers and profit. After recession Campbell Brothers sales increased. Hence, Campbell brother’s pressurizing Wald press for dropping outside contract to get there work completed. Hence, the optimum solution for making profit and increasing production capacity as well as retaining skilled workers is by hiring unskilled contract worker on daily basis and skilled workers on permanent basis. Provide training to unskilled workers to make them skill worker and keep them as permanent worker afterword. Start two shifts of 8 hrs a day.
The question of how much workers (both skilled and unskilled) to be hired, is addressed in the case analysis.

Contents: 1. Situation Analysis 2. The Problem 3. The Options 4. Criteria for Evaluation 5. Evaluation of Option 6. The recommendation 7. Action Plan
Exhibit 1
Exhibit 2

Situation Analysis: * For Wald Press(WP), orders from Campbell Brother(CB) are the major source of revenue. * During 30’s depression, CB experience the sales drop subsequently decreasing the order to WP to work below optimum output level as a result WP is losing its skilled workers. * Credibility of CB with WP is affected. * In order to fill the gap of decreasing order from CB, WP approached outside contractors(OC). * In 1946, CB sales again escalated subsequently increase in the order to WP which led it to increase its printing capacity then its present capacity. * High pressure from CB on WP to drop OC and concentrate on CB orders. * Immediate expansion of WP is impossible. * WP Manager does not want to lose OC in order to survive in future depression. * WP is getting little or no profit from OC. WP is making profit from the orders of CB and it can only increase by increasing the order from CB. * Simple operation, high overhead cost involved in orders from OC. * High no. of orders, low inventory cost involved in orders from CB. * WP having moral obligation to OC. * Dropping OC would affect the image & credibility of WP in market. * CB assured WP to provide good business for 2 to 2.5 years.
The Problem:
How to increase the production capacity in order to increase the profit and retain and development of the skilled workers?
The Options: * Hire the unskilled contract workers on daily wages or on temporary basis and simultaneously hire skilled workers as permanent employees. * Increase the current capacity of production by adding new printing line. * Subcontract the work to the ancillary printing companies.
Criteria for evolution: * To keep WP in profit what so ever the market conditions are. * To fulfill all the printing orders from OC & CB. * To maintain the credibility and reputation in market. * Maintain the credibility with OC.
Evaluation options:
Here I have evaluated the different options which according to me WP is having:
Option 1: Hire the unskilled contract workers on daily wages or on temporary basis and simultaneously hire skilled workers as permanent employees in order to start two eight hour shift.
Now I will apply this option step by step on each criterion:
Criteria No.1 & Criteria No.2: To keep WP in profit what so ever the market conditions are & to fulfill all the printing orders from OC & CB.
Assumptions:
* Minimum per hour wage for unskilled worker is $0.43(source: http://kclibrary.lonestar.edu/decade40.html) * Minimum wage per hour for skilled worker is $ 5 (source: http://kclibrary.lonestar.edu/decade40.html) * 4 skilled workers and 20 unskilled workers required to produce 1000 books in eight hrs shift. * Billing by WP to OC & CB is 6 $ per book * Other production charges and overhead charges per book is $2. * 8 hrs of shift, in total two shifts are there
Working note:
From exhibit 1, in 1946 the no. of books produced by WP will be 2142400*
(*it is the forecasted figure derived from the average increase in production of books by WP in last five years)
Therefore,
No. of unskilled workers required per year in both shift= 42848
No. of skilled worker req. per year in both shift= 8570
Per day unskilled worker required in both shift= 119
Per day skilled worker required in both shift = 24
Per day cost of unskilled worker= $818
Per day cost of skilled worker = $1920
Cost of workers in total per year= (245400+576000)= $ 821400 per year
Other production charge per year= 4284800
Income generated in 1946 = 2142400* 6= 12854400
Revenue generated= income generated –cost of worker- other production charges = 12854400-821400-4284800 = $ 7748200
Therefore, in 1946 WP will generate profit equals to approx. $ 7748200 if it goes with option no. 1. And also full fill all the orders. And as per the forecast the order from the OC and CB will be increase in coming years.
Criteria no. 3 & 4: To maintain the credibility and reputation in market & Maintain the credibility with OC.
From above calculation it is clear that WP will able to fulfill the all the orders from the CB and OC therefore it will able to maintain the credibility & reputation in market as well as from OC.
Option No. 2: Increase the current capacity of production by adding new printing line.
As it is mentioned that the installation of new machineries required at least a year of time the for WP has to bare 1 year loss if it goes with this option as well as it will affect the credibility and reputation of WP in market
Option no 3: Subcontract the work to the ancillary printing companies. As per situation, CB fails to find other contractor to fulfill its orders. Therefore, it is become mandatory for CB to pressurize the WP to fulfill its all orders. From this it is clear that there is no ancillary printing company exists there and if at all any exists it will cost WP high, therefore it is better for WP to go for in house production rather than going for outsourcing.
The Recommendation: * After evaluation the above options as per the criteria, I will recommend WP to go for option no. 1, as through this option WP may increase the production capacity and generate high profit. * Train the 5 unskilled workers per month to make them skilled and put them on permanent basis. * Retain the skilled workers by giving them bonus and salary on time.
Action Plan:
The first action according to me WP should take to hire 24 nos. skilled workers on permanent basis
Second, the WP should hire the 119 nos. unskilled worker.
Third, work on the giving training to unskilled workers to make them skilled workers.
Fourth, WP should start two shifts each 8hrs in order to meet demands.
(995 words)

Exhibit 1
No. of books manufacture by Wald Press

Exhibit 2
Campbell Brothers Sales and Inventory