CUMBERLAND METAL INDUSTRIES
TO: ROBERT MINICUCCI
FROM: THOMAS SIMPSON
SUBJECT: CURLED METAL CUSHION PADS PRICING
DATE: 10/2/2007
Overview
Cumberland Metal Industries (CMI) is seeking to diversify its product line. A Houston area sales representative has made us aware of the use of curled metal in pile driving as a cushion to absorb shock. The curled metal pads have been tested by two contracting groups, Colerick and Fazio, both with promising success and noticeable advantages over the current asbestos pads.
Colerick has requested pricing so that they can purchase and use our pads on other job sites. Colerick has been told CMI will give them pricing information by the end of the week. Price is the first priority which will be analyzed by cost savings to company, manufacturing costs, and break-even volume. Marketing options will also be analyzed based on the market share, market size, and sales force size.
Analysis
Benefits of Coiled Metal Pads
Coiled metal pads drive 30 times more piles per pad than asbestos pads because they transfer more force and prevent shock while creating less heat than the conventional asbestos pads (Exhibit 1). This also helps to prevent piles from vibrating or cracking. Coiled metal pads only heated up to 250ºF, or 450º less than asbestos pads. Health dangers associated with asbestos have also made those who use the asbestos pads wary of the risks.
Value to Contractors
From the two experiments with CMI's coiled pads the contractors averaged 30% more feet driven per hour with our coiled pads over typical asbestos pads. The pads also drove 2800% more piles per set of pads than did the asbestos pads. The contractors avera ...