981_3_Case A 2012 - Beauregard Textile Company[1]外文电子书.pdf

Harvard Business School 9-191-058 October 19, 1990 Beauregard Textile Company In September 1990, Joel Calloway and Clarence Beal, Jr., sales manager and controller respectively of the Beauregard Textile Company, met to prepare recommendations for fourth-quarter fabric prices. When approved by the executive committee, fabric prices were published and mailed to customers. These prices were considered firm for the quarter. Beauregard was one of the largest firms in its segment of the textile industry with annual sales of about $82 million. Company sales persons were paid straight salaries and sold the full line of fabrics. On this occasion, Calloway and Beal were particularly concerned on how to price Triaxx-30, a blend of nylon, polypropelene, and rayon used for special outdoor applications. In January 1990, Beauregard had raised its price for Triaxx-30 from $3 to $4 a yard in order to bring its profit margin up to that for other products. This action reflected in part an adjustment to recent increases in costs. It was also motivated by a directive from the board of directors that urged management to strengthen the company’s working capital position so as to ensure the availability of adequate funds for a recently approved long-term plant modernization and expansion program. (Triaxx-30 was woven on special equipment that could not be used for other purposes.) Calhoun Pritchard Inc., the only significant alternative supplier of T-30 (the common trad