Adapconn Case Study Essay

767 Words4 Pages
1) OH Rate computation for Sunnyvale Line 6

OH Rate: Total Budget OH/Expected MHs Utilization
2007: 3,157,000/7,010 = $450/MH
2008: 3,338,000/7,180 = $465/MH

2) OH Rates for Sunnyvale Line 6 (2006/2009/2010)

2006: 3,108,000/6,780 = $458/MH
2009: 3,208,000/6,040 = $531/MH
2010: 3,077,000/5,220 = $589/MH

These rates are increasing from 2006-2010 due to the economic recession that began in late 2007 and severely impacted the OEM-EMS business in 2008. Because the global tech industry was in recession by middle of 2008, the volume of orders plummeted which EMS firms rely on to gain competitive advantage(filling up expensive equip with orders from several firms to run the equip 24 hours a day, 7 days a week). This also
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Both bids are unlikely to succeed. Not only are they higher than Adapconn’s 2008 bid, which was not accepted, Motorola’s cost cutting moves will also make it harder for them to afford the services.

4) Due to the rebounding industry growth rate of 15% in 2011 comparable to the explosive CAGR of 16.1% from 2003-2008 combined with the partial opening of the new plant in Slovenia, OH Rates are most likely to increase with higher volume orders and larger scale operations. This in turn will decrease our bids and make it more attractive for prospective clients.

Cost Analysis (2008)
Direct materials per unit: $1.320
Direct labor per unit: 0.310
OH per unit:
OH Rate Sunnyvale Line 6 $465.000
MHs/board 0.200000 93.000
Cost per unit:

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