They could be making more money per unit if they would tighten up their processes. They make two types of anchors. The bell type and the snag hook type. They have to stop production when they get an order for the opposite type of anchor and this down time for set up is very inefficient and costs a great deal. It takes about 36 hours to make the switch.
For a 250 million sq ft plant the rate per square feet comes to 0.25 whereas for an 80 million sq ft facility this rate is 0.43. The variable cost of this smaller plant is also about 150% of the bigger plant. So a new player trying to enter the industry with a smaller plant faces huge cost disadvantages. The other individual processes also seem to be scale intensive as evident from the importance of MES at each level of value chain. The government duties also make it difficult for small players to enter Canadian market.
Question 1 Based on the information presented in the scenario/case study discuss Albatross Anchor’s competitiveness in relation to (please address all items in the below list and provide support for your conclusions): 1. Cost a) Cost of Production: Albatross Anchor’s current manufacturing costs are $8.00 per pound for mushroom/bell anchors and $11.00 per pound for snag hook anchors. They charge the same per unit price as their competitors do but since all departments are housed under one building, there are operation inefficiencies which can decrease profit margins; Albatross Anchor has a cost disadvantage compared to competitors. b) Economies of Scale: factors that cause the average cost of producing something to fall as the volume of its output increases (Economies of Scale and Scope). There are two types of economies of scale: internal, which are cost savings that accrue to a company regardless of the industry, market, or environment in which it operates;
2. What are the basic issues? (Please list at least 4 and explain each with one sentence) (6 pts) The key issue seems to be cost, first and foremost. Carson Manor’s costs were approximately 14% higher than state averages on a per-bed basis, something which clearly needs to be addressed. Another key issue is the bureaucracy within the structure of the command chain; there is a convoluted hierarchy and this could have a negative impact on the efficiency of operations for Carson Manor as decisions take a long time and there may be a lack of responsibility as there are many groups and boards which make decisions, rather than an individual manager which may be the case at a private institution.
(10 pts.) For many corporations such as utility companies, a major portion of the cost of production is fixed in the short run. Should these very large fixed costs be ignored when the executives are making output and pricing decisions? Why? 5.
The bottleneck is being used by a bottleneck operation to control the flow through the system and into the market. For example, if there are three machines on an assembly line and the first and second machines can produce 10 units in a minute, but the second machine can produce only 5 units in a minute, a bottleneck will be occurred in this case. This is because the third machine cannot produce enough units to keep pace with the other machines. 3. What are the production scheduling principles discussed in The Goal?
The incorrect answer presented in the spreadsheet is the total of hours spent because of the error. 1c The information for all three plants regarding time spent on Sourcing Review is accurate, relevant and sufficient. Total time can be calculated by running the numbers given. The meaningful answer the manager requested is on the spreadsheet you would just have to add up all the hours for Souring Review with a calculator or possibly formatting the spreadsheet to extract that specific information. 1d The workbook addresses accuracy, relevance & sufficiency data regarding hours worked by employees on projects however when addressing costs the work book doesn’t meet relevancy because the amount paid to employees is not include and it doesn’t meet sufficiency requirements.
When deciding to outsource, there are risks such as quality issues, security issues and personnel issues. There are also various benefits to outsourcing such as the ability for the staff to focus on core related business functions. The vendors normally have access to better technology that would otherwise only be available with a large investment by the organization. Costs associated with an outsourcing agreement are primary, secondary and incremental. The implications of outsourcing for the business can be to strengthen the business structure or can lead to a weakness.
As we look forward, the role of HR will be increasingly tasked to prove their worth by improving a company’s financial performance by focusing on activities such as strategic planning, change management, corporate culture transition and development of human capital. (Richey
As the role of manufacturing increased in the overall competitive strategy of many companies, maintenance would be increasingly pressurized to find ways of improving its cost effectiveness and quality of service. Multi‐skilling was an important way of reducing costs and improving performance. A description of the nature and extent of multi‐skilling among production and maintenance jobs in UK manufacturing industry were given and some of the operational costs and benefits of multi‐skilling were