OptiTech has always had a steady stream of revenue and solid profit margins. However, they were recently approached by the state Department of Education to participate in a partnership where they would manufacture all school supplies for over a million schoolchildren. Clearly, this is a great opportunity for the company.

However, the following issues must be considered:

• The production team has had trouble with an increasing defect rate in erasers over the past several months and is still working on a solution.
• Production is currently at 90% capacity with the existing staff. Manufacturing equipment could be used for an additional six hours at night if more staff were hired. This would provide enough capacity to meet the additional demand.
• If production were to be expanded, an additional quality assurance team and shipping crew would also be needed. One more staff member would need to be hired for both the human resources and the customer service teams.
• There has been a movement to unionize the factory crews. If this happens, crews would receive more vacation time, additional health benefits, and a significant pay increase. This would impact both scheduling and profits. Product prices may need to be increased to compensate for the losses.