Andrew-Carter Casestudy

Production: We will significantly increase automation levels on our products. However, because automation sets limits upon our ability to reposition products with R&D, we will postpone automation for the High End and Size products until they arrive in the Traditional Segment. We will prefer second shift/overtime to capacity expansions.

3. Estimate the project’s NPV. Would you recommend that Tucker Hansson proceed with the investment?

They should be involved whit the distribution and sales activities while they had a contract with MB and not let MB do all the work. Then it wasn't all ruined because they know what to do with the distribution and sales activities.

I would tell the investor to use his best judgement. Since I could not be assured of the accuracy of the costs involved in this project, I would be hesitant to offer an opinion on this.

The bargaining power of customers determines how much customers can impose pressure on margins and volumes.

They know that growth is lacking and that in order to survive, DMC must alter course now. Senior leadership needs to determine which market segment to pursue, and how this strategy may or may not affect other areas of the company including, but not limited to: Human Resources, Manufacturing and Distribution. Senior leadership must also be aware that any change in strategy will influence I.T. also. While IT is a broad-minded team willing to offer up technical solutions to advance product development and sales, their budget, as well as other departments has been inhibited over the course of current recession and the inconsistency of returns to the company.

brand image of the company same time it will initiate a price war. It will not benefit the

Customers appreciate for products that would satisfy their expectations (Cooper and Kleinschmidt 2007, p.58). Our goal is to bring high-end products to clients that meet their ideal criteria for positioning, age and reliability. Therefore, we will consistently update our products, develop new products in segments of High End, Performance and Size and reject Low End and Traditional at the same time.

$50,000 for an annual contract, it should invest $450,000 to individuals who extract value from

This is again, due to the amount of and variety of consumers it is accustomed to and providing services for. This essentially indicates that if they were to lose one customer this would not be a considerable or major loss to the organization because each of their targets are specific and individual rather than collective which holds more risks

‘An investment is made to earn a return’ (Trotman, Gibbins and Carson 2012, p. 652). In order to make a sensible investment with adequate consideration of the company’s profitability, it would be vital for company to figure out both the budget for investment and the estimate revenue to see whether the move is commercially doable. There are also estimate costs which need to be focused on. If the potential expenses of an investing action tend to be much higher than budget, it might impel the company to bear liability pressure, or to give up the investment.

If we are only looking at the financial implications of investing in the company using the expected IRR and NPV we may be fooled into thinking this new television program would be a great investment. Even if our WACC were 20%, we can expect the NPV of the project to be $1,716,414. When we look at discounted payback, however, we see that at a WACC of 20% the project payback period would be a little over 4 years and even the simple payback period is 3 years (see exhibit 2). This

Over the last 25 years, it has become harder to satisfy customer demand from inventory and thus making the cost of keeping inventory more expensive. This becomes a problem as new products cannot be produced until the old products have been sold, usually at huge discounts (Anderson, 2014). Therefore, many companies are forced to customize products, to some degree, for increasingly selective customers or to compete in niche markets (Anderson, 2014). However, introducing these customized products into a mass production manufacturing approach is complex and creates high costs of variety.

In today 's fast paced environment, manufacturing flexibility is extensively recognized as a critical component to accomplish a competitive advantage in the marketplace. Characterized by increasing product variety and short product life cycles and, it become apparent as a key competing weapon. It reflects the ability of organizations to acknowledge the changes in their customers ' needs, as well as to unanticipated changes develop from competitive pressures. [1]

willing to pay their prices. Five years ago, twelve customers accounted for around 80 per cent of Aztec’s