The special projects manager of Mega Corporation, must make a recommendation to Mega's owner, about Mega's investment in a television production facility at Clark Special Economic Zone, the Philippines. Initially the investment was to have been Mega's first venture into being an original equipment television manufacturer; sourcing parts and selling the output on its own. Recently, however, Aiwa and Mega have had negotiations about the plant becoming a sole supplier for Aiwa's new initiative into television production. Under this arrangement, Mega would assemble televisions for Aiwa from parts either sourced through Aiwa or sourced on its own - if these parts were less expensive yet met Aiwa's standards. Mega's profits would be about $2 per unit plus 50 per cent of any cost saving on the components it sourced.
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