Frabiteck Case Essay

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Outline Fabritek Corporation mainly focuses on producing high quality machined parts for manufactures in several different industries. The company maintains its reputation for rapid, on-time delivery and competitive prices for high quality machine work. But when Fabritek produced engine parts for Pilgrim, there appeared some problems that might lead construction delay. So the manager and the department foreman had to dealing with the troubles and tried to make the shipment on time. Problems The contract with Pilgrim was important for Febritek because once the quality and performance were satisfied, larger and more permanent contract were likely to follow. The contract required shipments of 650 units each Friday, starting January 31. At the beginning, everything went well and at pace of 135% of standard. At this pace, all the work could be completed and shipped on schedule. However, after two deliveries had been made, one operator was injured during work and could not come back to work for several months. There was an absence for the whole assembly line. So Deere, the milling department foreman of Fabritek decided to assign another skilled operator, Arthur Moreno, to do the injured operator’s milling job. Moreno worked for another job before transferring and he used to earn substantial premium pay at $645 per week, which was about 65% higher rate than the standard pace rate payment (Exhibit 1). It meant that he was able to work at a 65% higher rate than the standard rate. Because he could not do the work as fast as he used to do his own work, he got only $522.42 for the first week after changing to the new position. Therefore Moreno was upset and unsatisfied with the new job. After Moreno doing the new work, he speeded up the milling process at an output rate of 167 units per day to get the excess bonus. His work made the inventory between milling and grinding

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