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Wilson Electronics
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- Wilson Electronics produced a specialized machine for Magnus Manufacturing, expecting to break even but maintain a key customer relationship.
- The company faced quality control issues and price disputes, leading to a decision on pricing K-50 at $15.50 per unit despite potential profit from Rigbee Controls' offer of $11.50 per unit.
- Wilson had a strong but limited relationship with Magnus, who would not increase their purchase volume regardless of price reductions.
- The initial decision to produce K-50 for Magnus was strategic, prioritizing customer loyalty over immediate profit.
- Maxwell decided to accept the Rigbee offer at $15.50 per unit, balancing potential losses with increased production and market expansion.
- Cost data analysis showed that selling at capacity would result in a loss but could be offset by higher volume sales, impacting pricing decisions.
- Potential risks include strained relations with Magnus if Wilson sells K-50 to Rigbee at a lower price, affecting long-term customer loyalty and trust.
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