Case study: Arva Furniture, a small-sized company in Arva, north of London Ontario that produces wooden yard and patio furniture. Ron Hill and his wife Debora are the founders of Arva Furniture, a small-sized company in Arva, north of London Ontario that produces wooden yard and patio furniture. Since its establishment in 1975, they have had small orders from rural retailers, which they have managed with their existing equipment and staff. A close church friend introduced Ron to Larry May who was visiting his sister in Arva during the Christmas holidays. Larry is a major maintenance contractor for parks and recreation facilities of many municipalities in Southwestern Ontario. The social conversation between Ron and Larry soon led to a business talk ending in Larry visiting Arva Furniture workshop. Impressed by the quality of their products, Larry told Ron and Deborah that at the right price he would like to sign a one year contact for an order of 500 benches to be delivered in the following year pending on two conditions: a) the cut and shape of bench legs are slightly changed as per his ordered, b) the bench parts are joint using decorative galvanized (rust proof) nuts/bolts and screws and that each bench would have a metal mold emblem. He also mentioned that if the order is handled satisfactorily it can be repeated in the future. While they welcomed this business opportunity, Ron and Debora requested a week to evaluate the offer before signing the contract. Larry agreed as he was planning to stay in Arva for ten days. Next morning at breakfast Debora found Ron quiet and worried so she asked him if it was because of this new business offer. “I don’t know, Deb”, Ron said “it is a heck of deal for us, but I am worried because delivering 500 benches in a year with the specs Larry wants could be challenging!
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