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Carter Racing Case

In: Business and Management

Submitted By ekha5101
Words 1099
Pages 5
Carter Racing Case
Situation
Bj Carter and Chris Carter are siblings and business partners. They have to decide to run their race car in a high stakes race against tougher competition than they have seen all year. The problem being, their car has failed 7 times out of 24 this season and if it fails in this race, not only will they be out a $50,000 engine, but they will also be out a full season contract from Goodstone worth two million per year. If they decide not to race, they will be out $15,000 in entry fees and for sure lose Goodstone and end up $80,000 in debt on the season. Lastly, if they race and they do blow and engine, they will lose a sponsorship worth $80,000 from oil company because they don’t want their name on a car that is blown and smoking on the side of the track.
Problem
The main problem that needs to be addressed is should they race the car given the risk it blows and they lose both sponsors and parts to replace a new engine. One thought was that the temperature on race day was at fault for gaskets going bad and ultimately causing engine failure. However, there does not seem to be a strong correlation between air temperature and engine failure.
Analysis
When deciding to run the car in the race, the Carter brothers need to analyze several aspects of the situation to make the decision that will be most beneficial for their business. It should also be noted that even with the given information provided to them, racing is a risk and there is no guarantee that even if the car does not blow a gasket, they could still lose. Especially given most of the races they have competed in have been smaller with less competition. All the problems that have hindered their team in the past come down to gasket problems, the reason they are breaking is unknown, however, there are two main suspected reasons for the failure; the first being the air temperature

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