Cumberland Metal Industries CMI Case Study
Situation Analysis CMI is one of the largest manufactures of curled metal products in the country, having growth from 250K$ in sales in 1963 to over 18. ... Company philosophy soon evolved from selling the metal as a finish product to selling product that used it as a raw material. ... From the Income statement it shows that Cumberland Metals industries net sales has decreased since 1978 to 1979 while the net income per share has also decreased. This means that CMI has not been producing well and will need to revamp the system, or invent something that will be a profitable business. The Engineering Products Division largest customer is only $10,000, so a new product would not only help the engineering products division but also increase the overall net income for CMI. The product: Curled metal Cushion pads CMI invented a new unique product, named Curled metal Cushion pads. It is made out of curled metal that allows the metal to stretch in both length and width while also being able to withstand almost any temperature or chemical. ... The new CMI cushion pads provide good answer for the asbestos pads disadvantages. Reviewing this product, CMI management need to come up with a pricing model for the new pads and see if the consumers would in fact benefit from the product and if the CMI Company would benefit from the new cushion pads. ... Since the company shows that the manufacturing costs are about 150$ with the existing manufacturing equipment, and about 70$ with new manufacturing equipment, CMI would make well over that per pad and have the rest come as profits.