Should Antilles Refining Stop Making Drums Internally?

What decision is Wim Niewindt, managing director of Antilles Refining, considering?

Should Antilles Refining continue to manufacture drums internally or accept an outside supplier's offer?

Decision to Stop Making Drums Internally

Wim Niewindt discusses whether Antilles Refining should stop making drums internally to save costs by accepting an outside supplier's lower price offer.

In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining. N., of Aruba. "At a price of 78 florins per drum, we would be paying 10 florins less than it costs us to manufacture the drums in our own plant.

The scenario presented by Wim Niewindt involves a decision on whether the company should continue manufacturing drums internally or outsource them from a supplier offering a lower price. The context of the question deals with cost-saving and potentially operational changes within the business.

Businesses often contend with the decision of outsourcing versus in-house production. Outsourcing can lead to cost savings and improved focus on core business activities. However, it may also result in a loss of control over the production process and a negative impact on local employment.

Such a trade-off requires careful assessment to ensure alignment with the company's overall objectives. The situation calls for an analysis of not just direct cost comparisons but also an understanding of trade relations, operational risks, and strategic positioning.