Question

In: Operations Management

On Friday afternoon you received a call from a gentleman who identified himself as the chief...

On Friday afternoon you received a call from a gentleman who identified himself as the chief executive officer of a firm in a small city about 100 miles from your headquarters. He wanted to charter an aircraft to make a trip to a small U.S. border town. He assured you that you would not be required to fly over the border into a foreign country or deal with customs agents. The trip would depart tomorrow (Saturday) evening, make a two-hour stop at the town’s airport, and return sometime after midnight Sunday morning.

The caller cautioned you about the confidentiality of the trip and requested that your two “most closed-mouthed” pilots fly the charter. In reply to some serious and repeated questions concerning the mission and legality of the trip and/or cargo, the caller assured you that the trip was for legal business purposes, and no contraband would be involved. He alluded to “a highly sensitive business matter” that would have an enormous effect on his firm if “the parties can agree.”

The aircraft you would have available to send is in good condition and its maintenance schedule is up-to-date; thus the trip would not endanger the readiness of the aircraft for its normal schedule the following Sunday. The prospective customer has offered you a fee that would net your firm $5,000 profit above the direct costs. The fee is somewhat large, considering the length of the trip, but the caller offered it, and you did not object.

You couldn’t find information about the firm online. Because it is late in the day on a Friday, you aren’t able to research the firm any further.

Your director of marketing is urging you to take the charter because of the potential profit and future business this firm might provide. “I’ve heard of the company. They’re in air conditioning or something like that. I’ve also heard they’re either trying to acquire another company, or they’re about to be acquired. This might be the final closing of the deal.”

1. Take the charter trip.

2. Do not take the charter trip.

Solutions

Expert Solution

As far as the information is provided by the CEO of the firm, the charter trip should not be taken. The reasons for the same are:

  • The CEO has not provided the legality of the trip and did not mention the iota of information regarding the trip. Just mentioning the place that is also a US border town, we cannot rely on him that no custom inspection will be held and no border crossing will take place. Unless complete information is given regarding the trip, we cannot take such a high-level risk.
  • Not finding information about the firm on the internet makes things more skeptical. It is not possible that a firm exists and nothing is available on the internet about it. Every company has its website and registration details which are available on the internet. Contact details and address of the firm are also available on different search engines like google and bing. So we cannot believe the person as things are contrary to what he said.
  • Giving such a high price for the trip also create doubt regarding the legality of the trip as one can hire any private charter at a reasonable price.
  • We cannot just go ahead and take such a risk just because the director of marketing had heard such and such things about the firm and he himself is not sure about the company. Just to gain some more profit we cannot move further with such a risk.
  • The customer has not answered any question posed by the service provider and just assured that everything will fine and the trip is completely legal. The company must have some rules and directions on account of which the trip is provided. Unless those formalities are not met, the trip should not be taken.

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