Business Decision Making And Analysis

Executive Summary of Conroy Manufacturing Company Case Study

Melbourne is a prosperous city in Australia. One of the contributors of the city’s prosperity is its proficiency in manufacturing sector. The principal productivity growth driver is manufacturing, and with its revolution having occurred for the past 5 decades. Moreover, around 1960’s and 1980’s, Conroy experienced positive expansion, however, beyond 1980’s, there came a bad experience forcing Conroy to scale down and cease its garage production prefabrication of its paint production side. This sent a signal for overhaul of its management and in 1999, a new set of management came in who proposed the diversification of the consumer product market.

Overview of Conroy Manufacturing Company Case Study

In 1960, the company named Conroy Manufacturing Company was established in south-east Australia. This company was constructed on an army’s disused base at Frankston Melbourne. The CMC started its business in the industry of machinery and industrial tools by manufacturing them and then retailing the small machines to the target market. The business faced a remarkable growth in the 1970s and early months of 1980s by manufacturing and producing the industrial paints, materials for buildings, small machinery for plants and garages that were pre-fabricated (Howard, & Matheson, 2005).

However, the sales volume tended to decrease in the late 80s, and the company faced bad fares that year. The paint production side badly collapsed to raise funds from the market and also the manufacturing of pre-fabricated garages stopped the operations to finish the production process. The reason behind the collapse was emerging competitors and poor market investment by the company (Zadeh, 2014). This worsening of the situation prevailed until the year of 1998.

The year of 1998 was experimental for the company because the new management group entered into the business with new skills, knowledge, exposure, and abilities that are required in competitive market conditions. They decided to expand the business in the local market and globally by diversifying its strategies and by producing consumer goods that targeted new markets. They commenced the new product range by selling drill machines and engine turners for cars through hardware stores and some DIY chains. The sales level increased with slow growth, but eventually, the business was a success for the company (Howard, & Matheson, 2005).

Decision Analysis of the Problem Situation

Step# 1: evaluate the problem’s structure:

After success in diversified business, the company redeemed its stable position in the market, and in 2015, the management had planned to start manufacturing the tools for gardening and to develop gardening equipment specifically “electric lawnmower” for which the code was set LM15. The dilemma that the Conroy Manufacturing faced was if the prototype had been planted in December that year then there are 75% chances of recovering the positive results from the plant within a year in 2016.

 Kevin Abbot was the chief engineer for that project and directed the R&D department to conduct the research about potential sales for the products. On the other hand, if the plant did not give profitable results, then Kevin would reconsider the plan and might abandon the whole project or else would start with zero again but revising and modifications of the model would cost extra 6.5 million dollars (Zadeh, 2014).

Step# 2: Choice of alternatives and the consequences:

For the manufacturing and efficient production of lawnmowers (LM15), the prototype should’ve been installed in a separate location. The management had shortlisted two locations for production of lawnmowers. One location was Campbellfield which is north of Melbourne, and this site was used to be ancient textile mill, it had been shut since 2013. The second alternative for the production of lawnmowers is an existing factory of Laverton which is located at west of Melbourne and is entirely unused (Russo, Schoemaker, & Russo, 2016).


If the company will choose a Campbellfield than the building needs to be renovated and reconstructed that will take a time of one year.Moreover, the installment and development of prototype could take place an extra year so combining both this location would cost two years. This is not predictable for managers that if this location would be available after a year at same $6million which can turn into opportunity cost in future. Also, it is uncertain that the model will be successfully developed within a year that will make the mill equipped further. So this would cost extra 10 million dollars (Saaty, 2008).

On the contrary, the Laverton site is new, but the capacity is less for sub-plants that helps in production. So it requires some more constructions of buildings to convert the existing building into manufacturing house. This extra construction procedure would take a period of one year, and it wouldn’t be able to commence without the successful development of the prototype. The cost for conversion would be 24 million dollars.

Step# 3: assign conditional probabilities:

There are also risks and uncertainty involved in choosing an option. If the manager chooses the Campbellfield the market conditions would not be a threat in initial stages but the financial risk is greater and unpredictable. The time factor is significant in this choice because the renovation would take extra time plus the cost would increase with extra time (Haussler, 2018). The chances of successful development of a model within a year are also uncertain.

In contrast, the probabilities and uncertainty are also attached with the Laverton location because, in order to increase the production capacity, the building must be extended,and for that, the successful development of the prototype is a condition. It could take more than a year for a model to develop. So the time factor and success factor are risky situations if the company invests in this location (Russo, Schoemaker, & Russo, 2016).

Step# 4: assessment of the relative value:

The managers researched the potential sales volume for next six years under good and bad market conditions for both the alternative options. It was studied that value of Campbellfield is stable in terms of generating the cash flows for next year’s is each year the sales will generate $16millions. With this stable nature, the capacity of the prototype installed in this site would give an annual production of fifty thousand (50,000) lawnmowers.

On the other hand, the prototype development in Laverton would produce166000 lawnmowers annually, and that depends upon market conditions and market strategies made by the manager to cope with market situations. According to research, the cash flows generated from this plant will be more profitable in next six years i-e the value of the Laverton building will become 32 million dollars (Marttunen, Belton, & Lienert, 2018).

Step# 5: Make a decision based on expected value:

The consumers demand the convenience of purchasing, the right price structure and multiple features of the products (Tian et al., 2017). The company provides all three elements in their products and services. However, the on the basis of convenience, the Campbellfield site is feasible as it is loaded with local skilled workforce, facilities of transportation and warehousing. But the factor of uncertainty and less production capacity are unavoidable determiners.

In contrast, the Laverton location is feasible for the development of prototype installment because it guarantees growth in sale and in production capacity with less risk of additional costs. The value of the building also tends to generate in future.

Feasibility & results

Uncertainty & Risks

Sales & Market Value


  • The choice of Laverton location is suitable for coming years that ensures the future growth in the sales and value of the site. But the sales level depends upon market conditions, environmental switching and high budgeted advertisings. The management has chosen the option that requires strategies to outshine the economic and market threats. According to the data, the potential sales growth is very weak in bad conditions even after a year (Tobiszewski, Namieśnik, & Pena-Pereira, 2017). The company must have to invest in the marketing
  • For effective operations, the skilled labor is required that is located away from Laverton location. So extra efforts would be required to gather the experienced workforce near the location to avoid extra costs of calling them. Moreover, the production capacity is huge, so the products must be placed in warehouses that are also not near the site. The extra budget would be required to construct stores or hire a building for rents (Adem Esmail, & Geneletti, 2018).
  • The expected sales growth level of the plant installed in Laverton gave results independent of the taxes, market regulations and the government grants. The sales revenues can’t be estimated without the deduction of taxes and additional market costs. The company is required to revise the sales growth level for the prototype installed in Laverton by conducting another research about sales and market conditions and the fund's generation strategies in order to implement the agreeable design of a prototype for lawnmowers.
  • Currently, the company is investing little in its Research and Development department about $4million. It was supposed to be authentic approach if the choice was being made in Campbellfield favor because due to less capacity of production, the results for this project would be unaffected by environmental conditions. Now, the Laverton would be a huge project with heavy production so to raise the sales volume the R&D team must be proactive to analyze the market trends, product innovation’s information and the customer’s demands. The budget requires being increased for the department (Marttunen, Lienert, & Belton, 2017).

Use of Smart Technique:

For this study, net present value technique is being used for the analysis of future cash inputs in the business. The formula of net present value can be given as:

NPV = P x {(1 - (1 + S)-I/ S}

Where P is cash flow that is anticipated per time

S is the rate required rate of return

I represents the time period.

For Campbellfield Net Present Value will be= 16 x {(1-(1+0.75)^(-6)/0.75}-24

= $-3.409386

Thus, the negative amount here represents is the amount of revenue that the site will produce will be less by 3 units contrasted with the measure of capital contributed.

Total discounted expected value = 14.5 + 13.2 + 12 + 10.9 = $50.6

Less site cost $6M + equipment cost $4 = $10M

Less modification cost = $6.4M

= $34.2M

Alternatively, the NPV for Laverton site will be;

Laverton site NPV = 32 x {(1-(1+0.75)^(-6)/0.75}-24

= $17.181227

The Laverton project net present value esteem is certain inferring that the measure of income that the undertaking will produce will be more prominent by 17 units contrasted with the measure of capital contributed.

Strengths of Analysis:

The decision analysis quantifiably states the problems and evaluates the alternatives in a systematic way. The analysis and decision making conducted by the Conroy Manufacturing Company has positive impacts on company’s future market value, and it induced remarkable strengths in the entire system. These are:

A Systematic Approach to Multi-Faced Issues:

The decision analysis is a very systematic process that has the ability to reach to the depth of problems and then find out the related problems. This minute detailing is very critical yet authentic to uproot the basic problems at any point of time. The issue of cost and location was massive for the company and by identifying the exact problem statement lead this analysis towards the feasibility of the subject. The company was put into dilemma tat which alternative to choose for the solution of the problem but the right approach was established, and the decision was made to avoid the problems. If the problem is identified then it is half solved.

Decision Analysis Infers the Values:

The strengthening point that the analysis has generated is that the firm is capable of retaining its market value for a longerperiod of time. By making the authentic choice, the company will grow bigger and better, and the problems will be faced with proper quantitative and systematic tactics. This will raise the company’s standards, and its operations move towards boom and error-free work. The production capacity will increase, and the sales level will boost up. The consumers will meet their demands in time with innovative features in the desired product. The demand further increases and goodwill will be generated for the company (Haussler, 2018).

Defines the Uncertain Situations & Creates Assumptions:

The analysis helps the company to predict the threats in advance and direct the workforce to find out safety measures in order to avoid the uncertain situations. The management thus makes the assumptions for the company on the basis of analysis and the assumptions help the company to plan further the actions to improve the performance of the project. The lawnmowers (LM15) production level entirely depended on the proper handling of unpredictable future earnings and successful development, therefore, the analysis worked fruitfully to captivate the uncertainty and risk involved in the installment of the plant in time. The potential threats were minimized and assumptions were made to improve the decisions and revise them as well.

It Gives Specificity, Flexibility, and Validation to The Choices:

The decision analysis is adaptive and revisable at any stage of the implementation. The long-term goals are specified for the decision making while the short-term decisions can be changed and re-fixed accordingly. There are two choices for a production plant in terms of locations. I, as a manager, have chosen Laverton factory because of the validation it provides in its results. The diagrams and financial trees helped the management team to predict the long-term commitment of the profits through this factory (Tian et al., 2017). Moreover, the value of the company is more than that of Campbellfield. Several mini projects are also conducted to properly execute the main project of developing a prototype for production of lawnmowers.

It Leads Towards Better Results:

The purpose of the decision model and process is to deliver the better results for a longerperiod of time (Zadeh, 2014). And this has been observed during the entire project of prototype development. The project in Laverton will deliver high sales volume with bulk production capacity and significant market growth. The decision analysis is a strengthening tool for the company because the research and development department will gather the data about the market and economic changing situations and the uncertainty measures will be taken in advance. Also, the innovative features will be injected in production machinery to fulfill the customers’ needs.

Formulation of Relatable Policy Decisions:

Once the analysis has been made, then it formulates the future policies for the effective performance of the project. The policy decisions are for five years, and they direct the project to start with the successful sales figure. These policies have been made by the management team,and all the situations were relatedunder one table. The finances, marketing, operations and accounting decisions have been developed to ensure the progress of the project for first five years after commencement. All the decisions are relatable in nature and help the company to integrate its functional departments to form the unity in management and operations (Colapinto, Jayaraman, & Marsiglio, 2017).

Limitation of Analysis:

On the whole, the decision modelling and analysis is effective and gives desirable results, but somehow there exist few limitations to the method. Thus, my management team also faced restrictions and barriers to commence, perform and grow the establishment of a prototype for lawnmowers (LM15) in order to expand the business of Conroy Manufacturing.

The Nature of Decision Model:

The method that our management has used was simple and specificity-based. That makes the analysis easy to understand and to execute but the detailing portion of the analysis might lack in developing this model. My management team has ensured that the model suggests the authenticity of the subject to solve the problem, but somehow it lacked in tackling the critical nature of the situation (Tian et al., 2018). The price strategy hasn’t been properly developed and considered in the model. Every manager considered time factor important and planned things according to time limits.

The Cognitive Inertia:

The human nature plays a role to limit the performance of the effective project. In my team people with different behavioral natures were present. Everybody suggested his own plan and execution strategy. Some managers were passive to risk management while some were aggressive to tolerate risks involved in the project. So it took time and struggle to reach to one decision. The model that my team has used was simply because of the managers’ perception of the uncertainty and risks tolerance.

Differences in Interferences and Calculations:

The managers of different departments measure the environmental influences differently. The operational manager will forecast the threats related to operations while the finance manager will choose the environmental financial strategies. This results in a lot of extra useless data that takes extra time to arrange the necessary data to interpret the calculated scenarios.

Subjective Nature of Decisions:

Sometimes the managers make the decision subjectively and avoid the consequences attached to the objective nature of the decisions. This way the one-sided approach tends the project to neglect the uncertainty and risk that may occur in establishing the additional policy in order to ensure the performance of the project (Colapinto, Jayaraman, & Marsiglio, 2017).

Time Period Involvement:

The time period for the decision making was very short. The Conroy Manufacturing gave less than a month to make the analysis and choose the right choice the mangers totally relied on time factor throughout the project. The rapid calculations and fast managerial decision missed some important aspects. Moreover, the successful development of the prototype totally depended on the one-year performance criteria. It limited the managers to wait longer to see the results and to initiate further strategies to construct other buildings for other plants (Tobiszewski, Namieśnik, & Pena-Pereira, 2017).

Limited Analysis:

This analysis is limited in a way that it doesn’t analyze each and every department in detail. The main aspects of every department are studied, and the main focus is given to the analysis model. The model do contain trees and diagrams to assess in factual figures butstill the analysis fail to relate each departmental influence that can put impact on any portion of the project.

Diluted Responsibility of Managers:

In team work, the managers also commit blunders, but everybody owns the responsibilities. This makes the managers causal and callous towards their accountability to admit. This aids the managers to commit more mistakes because they know the responsibility will not be taken by any person solely.

Recommendations on Conroy Manufacturing Company Case Study

  • The company’s manager should use the decision support system in order to retrieve the latest and necessary information about environment and market. Also, it will help the managers to gather the required data about financial, marketing, operational and accounting departments.
  • The investments should be made in research and development department because it is core integral part of any organization’s future. It should not be neglected.
  • The funds should be raised on credit basis because after a year the prototype will generate profits and it will take six more years to get stabled in the market and grow in profits. The leverage can be a helpful tool in credit policy.
  • The extensive decision analysis method should be used for big projects that involve the evaluation measures and sensitivity analysis in its operations. This will help to maintain the additional costs that might incur in any stage of analysis and might be brutal in results.
  • In 1998, the marketing strategies of the Conroy Manufacturing boasted and resulted in visible profit growth. This project also needs massive marketing campaigns because the consumers are away from the factory location and they might find difficultin acquiring the products conveniently.

Conclusion on Conroy Manufacturing Company Case Study

The effective decision analysis is systematic and quantitative in nature that supports the managers to implement the authentic model to solve the problem that a company faces. The Conroy Manufacturing faced the problem to choose a proper location for its new product range where the prototype was supposed to be installed.

The decision analysis ran for the problem by the management team, and instantly it conducted the research and formulated the risk-minimizing tactics and made a smart choice that will generate profits for a longer run.

The analysis also inserted the limitations to the performance of the final decision, but the systematic approach helped the managers and the company to establish fruitful policy for the development and placement of the prototype that will manufacture a wide range of consumer goods and will lead the company towards significant growth in the consumer’s market.

References for Conroy Manufacturing Company Case Study

Adem Esmail, B., & Geneletti, D. (2018). Multi‐criteria decision analysis for nature conservation: A review of 20 years of applications. Methods in Ecology and Evolution9(1), 42-53.

Colapinto, C., Jayaraman, R., & Marsiglio, S. (2017). Multi-criteria decision analysis with goal programming in engineering, management and social sciences: a state-of-the art review. Annals of Operations Research251(1-2), 7-40.

Haussler, D. (2018). Decision theoretic generalizations of the PAC model for neural net and other learning applications. In The Mathematics Of Generalization, 2, 37-11.

Howard, R. A., & Matheson, J. E. (2005). Influence diagrams. Decision Analysis2(3), 127-143.

Marttunen, M., Belton, V., & Lienert, J. (2018). Are objectives hierarchy related biases observed in practice? A meta-analysis of environmental and energy applications of multi-criteria decision analysis. European Journal of Operational Research265(1), 178-194.

Marttunen, M., Lienert, J., & Belton, V. (2017). Structuring problems for Multi-Criteria Decision Analysis in practice: A literature review of method combinations. European Journal of Operational Research263(1), 1-17.

Russo, J. E., Schoemaker, P. J., & Russo, E. J. (2016). Decision traps: Ten barriers to brilliant decision-making and how to overcome them. NY: Doubleday/Currency.

Saaty, T. L. (2008). Decision making with the analytic hierarchy process. International journal of services sciences1(1), 83-98.

Tian, Z. P., Wang, J., Wang, J. Q., & Zhang, H. Y. (2017). An improved MULTIMOORA approach for multi-criteria decision-making based on interdependent inputs of simplified neutrosophic linguistic information. Neural Computing and Applications28(1), 585-597.

Tian, Z. P., Wang, J., Zhang, H. Y., & Wang, J. Q. (2018). Multi-criteria decision-making based on generalized prioritized aggregation operators under simplified neutrosophic uncertain linguistic environment. International Journal of Machine Learning and Cybernetics9(3), 523-539.

Tobiszewski, M., Namieśnik, J., & Pena-Pereira, F. (2017). Environmental risk-based ranking of solvents using the combination of a multimedia model and multi-criteria decision analysis. Green Chemistry19(4), 1034-1042.

Zadeh, L. A. (2014). Outline of a new approach to the analysis of complex systems and decision processes. IEEE Transactions on systems, Man, and Cybernetics, (1), 28-44.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Management Assignment Help

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