Your negotiation team, consisting of members of the top management group of the Twin Lakes Mining Company, has the autho
Posted: Tue Apr 26, 2022 12:32 pm
Your negotiation team, consisting of members of the top
management group of the Twin Lakes Mining Company, has the
authority to enter into any agreement that it deems to be in the
best interest of the company. Twin Lakes has several mines in
northern Minnesota and Canada; the Tamarack operation is second in
both "productivity" and contribution to corporate profit. Your
negotiating team includes the top person from the Tamarack
operation, along with others from corporate headquarters in Duluth,
Minnesota
Most of the problems that were described in the "Background
Information" have existed for a long time. Officials of the company
have met with city officials several times to discuss these
problems. Although you agree with community concerns, you frankly
think that the city has overstated the problems in order to get you
to pay for public improvements. Hence you have agreed to remedy
several of the most obvious concerns in the past, but have not had
to incur major costs up to this point. Now that the state and
federal agencies have mandated a cleanup, things have changed
considerably. Some major improvements will have to be made in order
to keep the Tamarack operations running.
You are committed to keep the Tamarack mine and plant open
if possible, but not at all costs. You do not want to spend large
sums of money to keep this operation running. Some of the newer
mining operations in other areas have revealed rich deposits, but
will require large investments to gain access. If the costs of
continuing the Tamarack operations are too high, you could close
this mine and plant and invest in other operations. You want the
city to help with the improvements, especially because they will
benefit the city as well as the company. In addition, everyone
involved knows that keeping the Tamarack area operations running is
very important for the Tamarack economy. Naturally, you would like
to settle as cheaply as possible.
Several options for each of the issues have been discussed in
the last few meetings between the city of Tamarack and the Twin
Lakes Mining Company. Both parties have agreed on which options for
each issue are the most feasible. A detailed explanation of each
issue, including the available options, is provided in this
confidential memorandum. In addition, a point system has been
devised so that all of the issues can be rated on a common metric,
to assist you in negotiating. The point system allows you to
combine several interests - minimizing expenses and maximizing
current and future revenues, while incorporating opportunity costs
and legal considerations - into a single "currency." Each option
has been assigned a point value to indicate the quality of that
option to you. Within each issue, an option with a high point value
is a better outcome for you than options with lower point values.
Across the five issues, more important issues are assigned a higher
maximum level of points than less important issues. The more total
points you gain, the better the outcome is for you. Your
task is to try to earn as many points as possible in this
negotiation.
1. Site of Next Mine. There are five locations that would be
profitable for you to mine, but they vary widely in their relative
attractiveness. They are all projected to bring back a positive
return on investment. The Allen Road Site contains the largest iron
ore deposit of the five, and has -2- by far the highest profit
potential. The ore located at this site is concentrated as well as
abundant, making it a very attractive site. Your company does not
come across mining sites with this kind of profit potential very
often. Mining the ore from this site could make the Tamarack area
the most productive and profitable region in the company. The
Buffalo Bridge Site, the Clearwater Lake Site, and the Devil's Pass
Site, in order of desirability, are three other sites that you are
interested in. These do not have ore deposits as large as the Allen
Road Site, and are in more remote locations. Based on the testing
conducted on these sights, they do not compare favorably with the
Allen Road Site, but they would be profitable. The Eagle Falls Site
has the lowest potential of the five sites under consideration, but
it would still bring a positive return on investment. Starting up a
new mine would have the added advantage of bringing production at
the Tamarack plant to near full capacity, achieving further
economies of scale. The company only has enough resources at its
disposal to invest in one of these mines. Because the city of
Tamarack either owns some of the land at potential sites, or owns
land that provides access to a potential site, an agreement must be
reached with the city concerning which site will be mined. The
point values for these mining sites are:
•Allen Road Site 100
• Buffalo Bridge Site 40
• Clearwater Lake Site 30
• Devil's Pass Site 20
• Eagle Falls Site 0
management group of the Twin Lakes Mining Company, has the
authority to enter into any agreement that it deems to be in the
best interest of the company. Twin Lakes has several mines in
northern Minnesota and Canada; the Tamarack operation is second in
both "productivity" and contribution to corporate profit. Your
negotiating team includes the top person from the Tamarack
operation, along with others from corporate headquarters in Duluth,
Minnesota
Most of the problems that were described in the "Background
Information" have existed for a long time. Officials of the company
have met with city officials several times to discuss these
problems. Although you agree with community concerns, you frankly
think that the city has overstated the problems in order to get you
to pay for public improvements. Hence you have agreed to remedy
several of the most obvious concerns in the past, but have not had
to incur major costs up to this point. Now that the state and
federal agencies have mandated a cleanup, things have changed
considerably. Some major improvements will have to be made in order
to keep the Tamarack operations running.
You are committed to keep the Tamarack mine and plant open
if possible, but not at all costs. You do not want to spend large
sums of money to keep this operation running. Some of the newer
mining operations in other areas have revealed rich deposits, but
will require large investments to gain access. If the costs of
continuing the Tamarack operations are too high, you could close
this mine and plant and invest in other operations. You want the
city to help with the improvements, especially because they will
benefit the city as well as the company. In addition, everyone
involved knows that keeping the Tamarack area operations running is
very important for the Tamarack economy. Naturally, you would like
to settle as cheaply as possible.
Several options for each of the issues have been discussed in
the last few meetings between the city of Tamarack and the Twin
Lakes Mining Company. Both parties have agreed on which options for
each issue are the most feasible. A detailed explanation of each
issue, including the available options, is provided in this
confidential memorandum. In addition, a point system has been
devised so that all of the issues can be rated on a common metric,
to assist you in negotiating. The point system allows you to
combine several interests - minimizing expenses and maximizing
current and future revenues, while incorporating opportunity costs
and legal considerations - into a single "currency." Each option
has been assigned a point value to indicate the quality of that
option to you. Within each issue, an option with a high point value
is a better outcome for you than options with lower point values.
Across the five issues, more important issues are assigned a higher
maximum level of points than less important issues. The more total
points you gain, the better the outcome is for you. Your
task is to try to earn as many points as possible in this
negotiation.
1. Site of Next Mine. There are five locations that would be
profitable for you to mine, but they vary widely in their relative
attractiveness. They are all projected to bring back a positive
return on investment. The Allen Road Site contains the largest iron
ore deposit of the five, and has -2- by far the highest profit
potential. The ore located at this site is concentrated as well as
abundant, making it a very attractive site. Your company does not
come across mining sites with this kind of profit potential very
often. Mining the ore from this site could make the Tamarack area
the most productive and profitable region in the company. The
Buffalo Bridge Site, the Clearwater Lake Site, and the Devil's Pass
Site, in order of desirability, are three other sites that you are
interested in. These do not have ore deposits as large as the Allen
Road Site, and are in more remote locations. Based on the testing
conducted on these sights, they do not compare favorably with the
Allen Road Site, but they would be profitable. The Eagle Falls Site
has the lowest potential of the five sites under consideration, but
it would still bring a positive return on investment. Starting up a
new mine would have the added advantage of bringing production at
the Tamarack plant to near full capacity, achieving further
economies of scale. The company only has enough resources at its
disposal to invest in one of these mines. Because the city of
Tamarack either owns some of the land at potential sites, or owns
land that provides access to a potential site, an agreement must be
reached with the city concerning which site will be mined. The
point values for these mining sites are:
•Allen Road Site 100
• Buffalo Bridge Site 40
• Clearwater Lake Site 30
• Devil's Pass Site 20
• Eagle Falls Site 0