The solution proposed in this scenario, when the general manager is not willing to abandon the product line, due to large sunk costs, or to iterate the design phase , would be to renegotiate contracts and allow corporate ethics. reputation of suffering the consequences. Before beginning the renegotiation process with suppliers, reassess the profit margin used to determine target costs, thereby reducing the company's profit before renegotiations (it may be possible to make up the necessary cost savings five to ten to cent and eliminate the need for additional renegotiations.) When to renegotiate sit down with suppliers, capitalize on the relationships built with these suppliers through face-to-face discussion, explain the situation in the hope of finding a solution that will for this product to flourish in today's market by providing both parties with mutually beneficial growth in production and profit. Understand the consequences of renouncing previously agreed contracts; Renegotiating price repeatedly will damage your relationship with suppliers and may cause suppliers to reduce quality to reduce costs in order to meet price requests, and may also cause suppliers to lose confidence in how you do business. business, which could inflate pricing contracts in the future in anticipation of price reductions