After discussing the pricing problem, Magers want to keep the 100 series price for $2.45, which is right. Even though the sales volume would increase to 1,000,000 from 750,000 by reducing the selling price from $2.45 to $2.25 per 100 pieces, the company would not make profit. Since the cost per 100 pieces for 100 series is $2.29, which bigger than $2.25. If the company sold at $2.25, the company lost money. Also, in the short run,
To counteract the dollar strengthening against the yen and the Japanese manufactures 40 percent cost advantage they were able to lower the prices, essentially trading profit for market share to insure long term sustainability. Caterpillar also generated income by capitalizing on the strengths of its distribution and logistics services to corporations such as Land Rover and Chrysler. They started to source out some of their manufacturing instead of manufacturing everything they sold. As an example, CMI Corp was hired to manufacture paving equipment. A joint venture was started with Mitsubishi Heavy Industries Ltd. to make excavation equipment and nearly everything sold in the Pacific Rim with Caterpillar’s name on it.
SMC would have 11.7 percent market capitalization among its competitors in the Private-brand distribution in orders. SMC has consistently generated net profit sales of 10 percent annually and has a strong reputation of being successful. This company needs to understand the guidelines of the contract and see if the proposal is feasible for their company to keep their reputation high. Management needs to discuss contract factors such as: * purchase price 5 percent lower the SMC’s manufacture list price for its standard model; * prices would be fixed with free shipping (no seasonal or promotional discounts); * greater exposure to liability claims; and * 45-day collection payment
This provides the company with the information that in order to reach the 2,400 million dollars in sales the set advertising budget must be set at 162 million dollars. With this in mind based on the figures in order to reach the expected sales the company would have to produce an average of 47 million units per quarter. To determine the fluctuations in the market a 2-period weighed moving average model is used with a weight of 0.9 representing the most recent view and 0.1 in the previous view. The data range for this calculation consists of a six-year period in order to reduce the occurrence of obsolete trends and violations that no longer apply to the market. Predictions: Quarter Sales in millions Units in millions Current Forecast of Units in millions 1 512
NIBCO was faced with many pros and cons when approaching the big bang implementation. “Among the benefits would be multimillion dollar operational improvements and reductions in inventory costs; the ROI was based on a six percent forecast growth rate in NIBCO’s revenues”(Brown, et al., 2012, p. 471). The decision to put its best people on the project to ensure it was well managed against implementation risks. Also the involvement of representatives from different functional areas to evaluate the different alternatives allowed the end users to evaluate the prospective system from their own perspective. Some of the cons were the estimated cost of the project was 17 million dollars which was a huge.
Dollar General in owned by Koldberg Kravis Roberts & Co. L.P (KKR) who own more than 79% of all shares in Dollar General. Some argue that part of the reason Dollar General has been so successful as of late is attributed to the economic crisis the United States experience during the second half of the 2000s. Economist believe that consumers will not shop at the Dollar General as much as the economy improves. In an effort to retain their existing customers and recruit new ones as the economy strengthens, Dollar General has begun to stock name brand items. Some analysts also believe that even when the economy improves, your average consumer will still look for ways to save money and continue to frequent the dollar discount stores.
Wal-Mart operates more than 7,000 stores. (Wal-Mart Corporate Website) The corporate strategy of Wal-Mart is to sell everything people need at low price. As founder Sam Watson said, goal of Wal-Mart is to save people money so that they can live better. This is the focus that underlies everything Wal-Mart does. (Wal-Mart Corporate Website) Huge turnover, large customer base and returning customers show that Wal-Mart has been able to achieve this goal in its 50 years of existence.
Problem 9-5 of Kaplan-Transfer Pricing Dispute A transportation equipment manufacturer is heavily decentralized. Each division head has full authority on all decisions regarding sales to internal and external customers. Division P has always acquired a certain equipment component from Division S. However, when informed that Division S was increasing its unit price to $220, Division P's management decided to purchase the component from outside suppliers at a price of $200. Division S had recently acquired some specialized equipment that was used primarily to make this component. The manager cited the resulting high depreciation charges as the justification for the price boost.
Project Management Area Strengths Major strengths for this project from a project management stand point can be seen when considering quality. Given the technical challenges related to this project, it can be suggested that quality management was successful Anbari (2002). Procurement Management Strengths Major strengths relating to procurement management for this project that contributed to the overall performance of
The OEMs insisted on quality products. The OEMs gave preferential treatment to Fonderia di Torino. The confidential market-demand information that Fonderia di Torino received helped increase the precision of production scheduling and the company received relatively long-term supply contracts from the OEMs. The company grew slowly but steadily since late 1940s, and its current sales are expected to be €280 million. In November of 2000, Fonderia di Torino was faced with the decision of purchasing an automated molding machine called the Vulcan Mold-Maker to replace the six machines currently in place.