Harimann International Case
Through the Harimann International case, Vikram Dhawan founder of Harimann International is presented with a dilemma on whether or not to take the responsibility of an order for one of his long time value customer (Pioneer Trading). Harimann International is a textile company that manufactures and exports their products. Vikram Dhawan is tempted to take the order because the Indian government is offering great incentives to help reduce the country’s trade deficit. One concern Dhawan has is that, should he take the order he is unsure he will meet the deadline expected from Pioneer Trading of April 6. Dhawan realizes that if he fails to meet the deadline he will encounter a loss.
Although Dhawan manufactures his textiles, there is a portion of the order that requires embroidery. This implies that he is subject to the embroidery’s time schedule to determine how soon he will be able to deliver the order. A motivator to take the order is that Dhawan is aware that due to the scarcity of embroiders, embroidery vendors make production decisions base on profitability. Another thing to consider is Pioneer’s interests of “quality goods delivered on time.” If Dhawan fails to meet the deadline he will encounter a loss and gain a bad reputation. However, if he meets the deadline there’s a possibility this deal will bring great rewards in the future. Not only would it bring future business but it will help provide about two extra weeks of employment for employees.
With the variations of possible outcomes based on probabilities, a decision tree was used to analyze the decision. Upon evaluation of the decision tree, the author concludes that Vikram should accept the order due to the positive expected return and the 0.425 probability of receiving maximum profits of 315,238 Indian new rupee.