Performance Objectives
The five key performance objectives for both of April Pump Company Ltd. (“the company”, “April”) product categories are: cost, quality, responsiveness, agility and dependability. The first two performance objectives are critical because of the high number of businesses that can manufacture these products. April is facing stiff competition from both local and international pumps manufacturers. There are many pump manufacturers who offer agricultural pumps, and the fact that a major customer has already declined to award April a contract for an industrial pump shows that there are other competitors who can provide these pumps as well. Customers buying industrial pumps will opt for manufacturers offering the lowest prices as this presents better value for them given the similarity of these pumps. Industrial pump customers will pay a premium price provided that their requirements are met (Slack & Lewis, 2011).
Quality is a key performance objective for the diverse customer groups. Customers who buy industrial pumps would expect the pumps to be of similar quality to those offered by other manufacturers, and they would also expect the pumps to meet conformance specifications. Industrial pumps customers on the other hand would expect top quality products given the premium prices they pay. Responsiveness or delivery speed is another performance objective that is especially important to agricultural pumps customers. These customers would expect minimum lead time because the products are standard. In comparison, customers who buy industrial pumps would be willing to wait longer given the unique nature of the products they require from the company.
Flexibility is an important performance objective for customers buying industrial pumps from April, but it is less significant for customers buying agricultural pumps. This is because there is not much flexibility required for agricultural pumps due to the limited product range, and the company’s knowledge of customer requirements. For industrial pump customers, every design is unique so there are differences in terms of manufacturing time frames. The other performance objective is dependability which is especially important to agricultural pumps customers. This is because late delivery of agricultural pumps can negatively affect project schedules leading to delays. In comparison, a delay may not have a significant impact for an industrial pump customer provided that the company delivers a product that meets the buyers’ unique needs. Figure C below is a polar diagram showing Aprils product lines based on the aforementioned performance objectives.
Product Life Cycle
The analysis so far indicates that there are significant differences between the two product categories in terms of characteristics. Similarly, agricultural pumps and industrial pumps differ in terms of product life cycle with agricultural pumps having a longer life cycle than the industrial pumps. This difference is due to the fact that agricultural pumps are one of those products that customers will always buy, and given the length of time that April has been in business they are in the maturity phase of their life cycle. Future growth and decline will primarily be driven by the economic environment. In comparison, industrial pumps have a short product life cycle due to their uniqueness. Each customer wants an industrial pump that suits their unique needs, thus these pumps have no maturity phase.
Agricultural pumps can be classified as runners because the company has been manufacturing them since its inception, and it continues to manufacture them regularly. Additionally, agricultural pumps are manufactured using the same raw materials given their uniformity. In comparison, industrial pumps are classified as strangers because they are not manufactured regularly. These products are manufactured based on customer specifications, thus they sometimes require special raw materials. Additionally, industrial pumps are often manufactured as one off products with different manufacturing times based on what the customer wants the product to look like and how they want it to function.
Structural Elements
The first area of focus is vertical integration, and for make or buy decisions, Abetti’s matrix and Venkatesan’s flowchart will be used (Abetti, 1989; Venkatesan, 1992).
Simple Valves
In 2016 April generated more than 55% of its revenue from the sale of industrial valves, and this product line is one of the fastest growing. Revenues have more than doubled in the last five years, but this increase has come at the expense of customer delight. The company already

4. Define the decision variables and determine the objective functi...