John Smith is the CEO of Alpha Manufacturing Pty Ltd. This company manufactures high value products in the form of small model aircraft jet engines that are mainly sold online. The raw materials input for the Jet engines are a series of high value easily marketable items mainly exotic metals and electronic systems that support the engine controllers. There are five models of engine produced, each requiring about 25 components, including screws and fuel connectors. About ten of these components are made in house from the exotic raw materials. The controllers are assembled in house from about 10 electronic components and are common to all the engines. The business has been enjoying a long period of several years of continuous growth both in sales and profit. However, compared to the growth of sales net operating profit growth seems lower. John contracted with a business consulting firm to identify the reasons for this inconsistency. The consultants came
