Case Study Report The Wilkerson Company is a manufacture of pumps, flow controllers and high quality valves. Products supplied to manufacturers of water purification equipment. Wilkerson started with a unique valves design and then produces pumps and flow controllers by using the existing labour and machinery. Wilkerson Company has declined the pre-tax profit from 10% to 3% due to several prices cutting in pumps by matching competitor price. The decision of cutting price was considered by the main members of the company.
By doing so, a corporation may reduce commodity price affecting its share price. J&L Railroad had most of its revenue fixed for a long term, because it was industry practice for railroads to enter into long-term fixed-price contracts with their freight customers. On the other hand, fuel cost was a large cost item for J&L, and fuel prices have high volatility. Price competition in the railroad industry was fierce that railroads could not increase freight prices based on fuel price increase. Thus, J&L’s operating margin was exposed to the volatility of fuel prices.
3. Wilkerson currently uses a traditional volume-based, full absorbing cost system. Each unit of product cost consists of direct material, direct labor, and manufacturing overhead costs which are allocated based on direct labor cost at a 300% rate. The factory cost flow diagram is shown below. Total Manufacturing Overhead: 806,000 | Total labor cost: 271,250 | Manufacturing cost rate per labor cost: 300% | | Labor cost per unit | | Manufacturing cost per unit | Valves | $10.00 | $10.00*300% | $30.00 | Pumps | $12.50 | $12.50*300% | $37.50 | Flow Controllers | $10.00 | $10.00*300% | $30.00 | | Valves | Pumps | Flow Controllers | Direct Labor | $10.00 | $12.50 | $10.00 | Direct Material | 16.00 | 20.00 | 22.00 | Manufacturing Overhead | 30.00 | 37.50 | 30.00 | Total cost | $56.00 | $70.00 | $62.00 | However, Wilkerson has very high total manufacturing cost, and its three products have diverse consumption manners of indirect cost.
Dan Prete and Todd Strupek Dakota Case 1. Why was Dakota’s existing pricing system inadequate for its current operating environment? The pricing system was inadequate because it only saw profits on large orders. There was a real drop in profits if there was a bunch of smaller orders by clients. There was also bad costing in terms of individual customers and also for the new services provided.
Therefore, the company faces to problems with turning assets into cash. Moreover a low ratio of receivables turnover implies the company should re-assess its credit policies in order to ensure the timely collection of imparted credit that is not earning interest for the firm. As for a low quick ration relatively to a current ratio tells us, that the inventory is high, meaning there are troubles with selling. They, in turn lead to a low profit margin. 2) Calculate the operating cycle.
The difficulty involved in cleaning stainless steel molds for plastic parts along with un-molding forms the bottleneck for the plastic manufacturing process. Release-ease helps molded plastic parts to separate out easily from the molds and ensures that the mold remains clean. OBJECTIVES The main problem faced relates to differences in operational efficiencies between the various locations producing Release-ease. For example at the Gary (Indiana) plant 1,300 people produce about 300 million tonnes a year, while the Frankfurt facility accounts for almost 90% of this value with only 600 employees. The purpose of this article is to determine whether or not Applichem should keep their production of Release-Ease within their current plants or move production to another location.
Managers need to be careful of overpricing or under-pricing goods due to allocation of costs to each product. As was shown with the Wilkerson case on further analysis of costs using the activity based costing method the company had been under-pricing some goods while over pricing others. This was affecting their profits and their ability to make sound business decisions on the pricing of products to meet market demands. 6. Activity based costing is more complex to use however used correctly should improve the accuracy of allocating indirect costs to cost objects.
In this article, we tried identifying the various problems associated with this by looking at various production times. We also have provided some of the recommendations for the company to overcome these operational problems. Tabulation of the result and calculations Formulation | Standard Production times (min) | Total run time=Std. run time* CEILING(No. of boards/8) | Total Time=Total run time + Setup time | | Stage | Operation | Setup time | Run time | 1 board | 8 boards | 200 boards | 1 board | 8 boards | 200 boards | September's Production | | | | | | | | | | | Orders | Boards | Preparation | Artwork Generation | 29 | 0 | | | | 29 | 29 | 29 | 50 | 799 | | Inspect and Shear | 20 | 0.5 | 0.5 | 0.5 | 12.5 | 20.5 | 20.5 | 32.5 | 60 | 5761 | | Punch tooling holes | 10 | 0.5 | 0.5 | 0.5 | 12.5 | 10.5 | 10.5 | 22.5 | 60 | 5761 | Drill | Manual drill | 15 | 0.08 | 40 | 320 | 0 | 55 | 335 | 0 | 51 | 936 | | CNC drill @ | 240 | 0.004 | 0 | 0 | 400 | 0 | 0 | 640 | 9 | 4825 | | Metallization | 10 | 0.75 | 0.75 | 0.75 | 18.75 | 10.75 | 10.75 | 28.75 | 60 | 5761 | DFPR | Panel Prep | 5 | 0.2 | 0.2 | 0.2 | 5 | 5.2 | 5.2 | 10 | 60 | 5761 | | Laminate & Expose | 20 | 2 | 2 | 2 | 50 | 22 | 22 | 70 | 60 | 5761 | |
2010) is provided below. 1167872 4 Despite the leading position and the good business results, SWOT shows several sources of potential risks for UST. The company is losing market share against new price-value competitors because of slow innovation and late product introduction and extensions. Historically, UST relied on his leading market position boosting earnings with annual prices increases. But in the meanwhile smaller competitors started to quickly erode market share with prices cut.
* What should RBC do about customers who are unprofitable? * Specifically, what can RBC do about negative profitability customers that use retail branches and ABM machines for their bill payments? * What high level tactical marketing activities, such as grow, maintain, retain etc., are appropriate to balance CLTV and current profitability for the various customer segments? The following 2 x 2 may be useful to think through your tactical recommendations: ------------------------------------------------- Your team should be prepared to present your recommendations to the executive board. Each group will be given