Myerson Industries

5 Pages Posted: 21 Oct 2008

See all articles by Sherwood C. Frey

Sherwood C. Frey

University of Virginia - Darden School of Business

Phil Lederer

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Abstract

This case and its companion, "Centralia Construction Corporation" (UVA-QA-0298), constitute the materials for an exercise in role playing and negotiating. The exercise is a distributive-bargaining situation surrounding the negotiation of the price for the construction of a building (some minor opportunities exist for creating mutual value). Myerson is the purchaser of the building.

Excerpt

UVA-QA-0299

Rev. Nov. 9, 2010

Myerson Industries

Roger Myerson, striding purposefully into his office, was resolved to award the contract for the construction of the addition to his plant very soon. The need for the space was becoming more acute with each passing day.

Myerson Industries was a highly successful designer and assembler of low-cost printers for personal computers. Three years ago Roger Myerson founded the firm to capitalize on an idea he had while writing his master's thesis. From the beginning, business had been excellent. Sales projections for the next two years indicated that growth would continue to be impressive. Until now the necessary additions to productive capacity had been easily accommodated within an existing facility adjacent to the firm's offices in southern Illinois, approximately 200 miles from Chicago. In light of the aggressive sales forecast, however, an addition to the plant was necessary if capacity was to keep up with the anticipated growth.

The special technology involved in Myerson's printers and the desire to keep tight control of product quality led to the decision that, if capacity were to be increased, it would not be done by subcontracting assembly to smaller vendors. The decision was made to double the plant's floor space. The company estimated that this would treble output, because several innovative design features would be adopted in the new facility that were not present in the old.

. . .

Keywords: pricing, role playing

Suggested Citation

Frey, Sherwood C. and Lederer, Phil, Myerson Industries. Darden Case No. UVA-QA-0299. Available at SSRN: https://ssrn.com/abstract=911841

Sherwood C. Frey (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/frey.htm

Phil Lederer

affiliation not provided to SSRN

No Address Available

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