successfully entered the field. Other companies had appeared with lower-quality and lower-priced machines. There was little doubt that future competition would be more intense The steel ring manufactured by PWI had a normal life of about two months, depending upon the extent to which the machine was used. A worn-out ring could be replaced in a few seconds, and although different models of the machines required from two to six rings, the rings were usually replaced individually as they wore out The sales manager, Gerhard Henk, had learned of the new plastic ring shortly after its appearance and had immediately asked when PWI would be able to supply them, particularly for sale to customers in France where Henri Poulenc was the strongest competition faced by PWI. Bodo Eisenbach, the development engi neer, estimated that the plastic rings could be produced by mid-September. The necessary tools and equipment could be obtained for about $7,500. Eisenbach had initially raised the issue of the steel-ring inventories that would not be used up by September. Henk believed that if the new ring could be produced at a substantially lower cost than the steel ones, the inventory problem was irrelevant; he suggested that the inventory be sold, or if that was impossible, thrown away. The size of the inventory, however, caused Thorborg to question this suggestion. He recalled that the size of the inventory resulted from having to order the highly specialized steel in large amounts so that a mill would be willing to handle the order. Henk reported that Henri Poulenc was said to be selling the plastic ring at about the same price as the PWI steel ring; since the production cost of the plastic ring would be much less than the steel, he emphasized that PWI was ignoring a good profit margin if it did not introduce a plastic ring. As the meeting concluded, it was decided that the company should prepare to manufacture the new ring as soon as possible but that until the inventories of the old model and the steel were