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The Parker Earth Moving Company (PEMC) plan to produce and sell 30,000 units of their new product, the Ultramover, is practically achievable. In order to reach this goal, the company needs to overcome the challenges facing its production and storage capacity. One of the solutions to help PEMC in its production is to hire the services of another production company as a subcontractor. However, statistics show that hiring a sub-contracting company would increase the company’s cost of production by far and lead to minimal profits. Thus, a more considerable solution is to hire and train temporary employees to meet the production requirements. Since time may not allow, the company could consider increasing working hours of its employees and pay overtime in return. The only solution to solving the storage space issue is by renting a warehouse.
In consideration of the fact that disasters could hit and disrupt the businesses production process, this company needs to assess the disaster risks likely to hit considering its geographical location. For instance, low lands with fairly flat terrain are likely to suffer floods in case of heavy rains. Also, lands near coast lines are likely to suffer earthquakes and earth tremors. In this understanding, it is possible for a company to assess the likely risks of natural disasters and take insurance cover to cater for losses incase such a disaster hits.
Obviously, a disaster strike would derail the production plan of this company. Therefore, a subsidiary plan to quickly recover and get back to production would be through hiring the production services of a subcontracting company. Transferring part of the production responsibilities to a subsidiary company as the PEMC Company recovers from an emergency natural disaster hit would dearly help. Even though the goal of production would be highly affected, this move would ensure that the company’s production is not halted.