Free Essay

Racing Team

In: Business and Management

Submitted By bigjj
Words 382
Pages 2
The reasons that I think the team should race are: first of all, from a broad perspective, if you race, you have a 50/50 percentage of chances to finish the game and mostly like to be within the top 5 position. However, if you don’t race, the chance of winning is zero. The team obviously gets to keep whatever the amounts that were left from the sponsorship. Like what their chief mechanic said “nobody ever won a race sitting in the pit”. Secondly, in terms of financial considerations, the team’s biggest concern for the racing was if their engine fail again during the race, they will lose all the sponsorship for next year and the team will end up the season with over $50,000 in debts and the likelihood of losing the oil contract, which worth $500,000. But on the other hand, if the team race and finish the game nicely like what they have been doing most of the time in this season, their financial rewards are much bigger. They will get $40,000 for the next game that the team needed desperately. They also will get the full sponsorship from the tire company for $1 mm plus incentives for the whole next season. The team will keep the oil company’s big contract and may possibly get more from them for the good performance. Therefore, get into the race make the financial sense for the team with the numbers listed. Thirdly, apart from the potential financial rewards, the mechanical data seems to support the decision to race in this case. In exhibit 1, 4 out 7 engine failures actually happened when the temperature was around and above 65o. Therefore, the claim that low temperature caused the engine failure was not well supported by the evidence shown previously. Lastly, from the chief mechanic’s words, the different seating the team had used in the last two races seemed to prevent the engines from getting blown up. This implied to me that as long as the racing car has the time to get its engine warm up in order to minimize the different expansion rates, the engine was strong and fast.
In all, the race should get into the race for the game today as the rationales that explained above.

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