Mt435 Unit 3 Assignment

Introduction Question One ground on the information presented in the scenario/case study discuss albatross Anchors competitiveness in relation to (please address all(a) items in the below list and provide support for your conclusions) 1. constitute a) woo of Production To agnize the toll of produceion we must first determine what two be ar valuable to teleph singler on what stern make a familiarity gain or lose profit. prototypic we look at Variable personify which dep wipeouts on what frameworks and labor atomic number 18 commanded for the companionship and in this case it is mainstaypersons which thr wiz vary with the peck of gutss that is produced (Rus trade in & Taylor, 2011).The fixed be are those that do not vary with takings and typically in rents, deprecation, insurance, set-up cost and normal profit (economicsonline. co. uk). Fixed costs are usually known as your overheads. When it comes to mollymawk Anchor and the manufacturing of its anchor we ca n satisfy that the fixed cost are down because they chose to fashion in house. Looking at the cost we can see that the cost of manufacturing culls/bell anchors are $8. 00 per pound and $11. 00 per pound for the snag hook anchors.One has to understand that millstone sells their products are the same rate as their competitors and their product are do primarily for fresh water which can be a disadvantage. some other disadvantage that I noticed is that all of their produces are made in house which dissemble their cost as well. When it comes to shipping they sole(prenominal) nominate two means which is shipping ( big freight ships) and truck shipping. Although there profit margin whitethorn at times be less(prenominal) than 35% we also have to think if they operating efficiently and everything that by chance affected if the manufacturing, shipping or receiving lines go down. ) Economies of Scale in material purchasing A company that achieves Economies of Scales lower the avera ge cost per unit through increased production since fixed costs are divided over an increased number of goods (Andexer, 2008). When more units of a good or a improvement can be produced on a larger scale, yet with (on average) less in endow costs, economies of scale (ES) are said to be achieved. Alternatively, this means that as a company grows and production units increase, a company allow have a better chance to decrease its costs (Investopedia. com).One has to ask that if, Albatross Anchors is producing anchors in small batches how are they able to correspond the economies of scale? To be hvirtuosost we can state they are not. Although the company itself has grown from 4 to 130 nation the company kayoedput/manufacturing has not ca utilise the cost of output to drop. c) Cost of Raw Materials Sitting slog in the Warehouse Raw materials can be classified as direct or indirect materials. Direct materials are raw materials that can be physically and directly associated with t he finished product (simplestudies. com).With that being utter if the raw materials are sitting idle in the warehouse so that will affect the overhead. This may also affect the shipping/receiving departments along with the storage space that is getable. d) Cost of Finished Goods Sitting Idle in the Warehouse With both finished and raw materials sitting idle one has to ask how much of increase in cost is because of the storage is the company taking. Many products at Albatross Anchor are not shipped out until they proven to efficient. 2. Speed of manufacturing process from order to finished product.Although it may depend that due to limited amount of anchors that are made are produced the manufacturing of the product would be efficient and effective. But from the video and all of the reading I would have to say that due to the lineaments of machines that is need for each anchor that amphetamine and quality maybe affect at times. There are diametrical types of machines that are needed for each anchor along with making authoritative that employees are trained well to run the machines. With that being stated in the midst of having to change each machine/product line it may slow down the process of making each product. 3.Flexibility in pickaxe order(s). When it comes to the flexibility of filling order Albatross only sells their anchors at wholesale price and it is mainly to companies and not the general consumer/public. Another factor to consider is the way the build is set up along with the limited amount of space that is available in the warehouse between each department. Many items depending on the size and quantity can take weeks in order to fill that feature order. 4. Technology. When it comes to our current world and as much technology that is used one may think that they would have found a way to put it use within heir company but that is not the case. Albatross Anchors only tend to changes as they go along causing them to revert behind when it comes to technology. The machines are older which has me wondering about the added cost that it may cause to keep them going. 5. Capacity and facilities. After reviewing the video I see that their facilities are in poor conditions making it harder for many to work that type of environment. The administrative office have no space/order to them along with their shipping or receiving department affecting how the company flows on a daily bases.Not having enough space along with clean, organized facilities can affect the produce and output of a company. 6. Service to customers. Albatross Anchors only sell to wholesalers not really having a relationship to their consumers. Because many of products are sell by distribution companies or OEM companies usually have large orders one may not know the real service that is being provided. Another factor to consider is that they sell their products at the same rate as their competitors so there is never any real discount creating a larger clien t base.I would suggest opening the doors to other consumers to help strain the food market. Question Two There are many ways that mushroom/bell anchors may be manufactured. Albatross Anchor is considering two upstart manufacturing processes ( solve A and subprogram B) to reduce costs. Analysis of the information below will help determine which process has the lowest break still point (this validates the process is more cost effective). For each process the following fixed costs and variable quantity costs are identified below Anchor and ProcessProcess AProcess BSale price per anchor$45. 00$45. 00 Total Fixed cost $ 650,000. 00$950,000. 00 Variable cost per anchor$ 36. 00$ 29. 99 Based on the information in the table above realize the table below Anchor and ProcessProcess AProcess B (a) Fixed costs per anchor 650000950000 (b) The total number of anchors to attain breakeven point for Process A and Process B 72,22263,291. 14 (c) Based on your calculations which Process (A or B) t hat you would recommend for adoption (you can select only one). enthral make sure to explain how you arrived at your conclusion.Personally since the breakeven point of the two has been cypher I would have to recommend using process B because of the cost and the amount that has are produced. Within a company we all have to think about what is going to be profitable in the end and that is another reason why I went with Process B. Conclusion Albatross Anchor is a family business that started off with only four people and it grew to 130. This company has came along way and have the potential to grow even bigger it they can deliver product quality and also using some of the newer technology that is available to them.I would also suggest that they expand their market and client base along with renovating/expanding the manufacturing company. Along with improving their manufacturing departments they also need have the administrative office in a space that is executable and more organized. Within every business there needs to be a plan, structure and a means of delivering the best quality of service that is out there and this company has a long way to go. References Cost of Production. (n. d) Retrieved exhibit 17, 2013 from http//www. economicsonline. co. uk/Business_economics/Costs. html Andexer, T. 2008). Analysis and Evaluation of Market Entry Modes Into the Asia-Pacific Region. Retrieved process 17, 2013 from books. google. com/books? isbn=3640144074 Manufacturing and Nonmanufacturing cost, (n. d) Retrieved March 16, 2013 from http//simplestudies. com/manufacturing-nonmanufacturing-costs. html/page/4 What are Economies of Scale? (Smith & Marshall, 2009) Retrieved March 17, 2013 from http//www. investopedia. com/articles/03/012703. asp Russell, R. Taylor, B. (2011). Operations Management Creating Value along the Supply Chain, seventh Edition. Hoboken, New Jersey John Wiley and Sons