Carded Graphics, Llc Sheeter Replacement Decision (Solution)

The decision to forgo the production of the cheaper product should also be evaluated in a capital investment cash flow analysis. The management of Prairie Winds will need to consider whether the internal and external side effects of their decisions in the capital budgeting analysis for the product lines. If the side effects increase cash flows of existing assets they are considered compliments, and they are considered substitutes if the side effects negatively effect cash flows.

Tucker Hansson, the owner of Hansson Private Label, is struggling in whether to execute the $50 million investment proposed by his manufacturing team. Under this situation, the subject of this report is to evaluate the potential investment of expanding production capacity at Hansson Private Label (HBL) and make a recommendation to Tucker Hansson. In this report, I will specifically focus on analyses of the project’s free cash flows (FCFs), weighted average cost of capital (WACC) and net present value (NPV). With a sensitivity analysis, it can help us to observe how change in some key project variables

Owens & Minor is a distributor of surgical and medical supplies to hospitals and other health care facilities. Due to changing demand from customers, the company is facing increased operating costs, which has resulted in lower profit margins and even losses. In 1993, O&M recorded an $18 million profit, which was reduced to a loss of $11 million in 1995. The entire industry is experiencing similar difficulties. In an effort to resume profitability, O&M is evaluating alternatives to “cost-plus pricing”. Cost-plus pricing does not reflect the true cost of the services provided by O&M. Customers are demanding more of O&M while

The budget analysis shows that the labor hours of the firm are higher than the budgeted amount. As such, the firm needs to evaluate the cost benefit analysis of making or buying their products. To make this decision, various factors need to be considered. Before making the decision, Peyton needs to evaluate the marginal costs and revenue of making versus buying the products. The firm should take the option which provides the highest marginal profit which is the

Henderson Printing is a small-to medium sized firm that manufactures account books, ledgers, and various types of record books that are used in business (Long, 2010, p. 512). This company’s compensation system will be analyzed based on the five contextual variables as discussed in the textbook. The environment in which Henderson Printing operates can be classified as stable, as well as simple. This can be justified, as the company produces stable annual sales, thus it can be concluded that product lifestyles are not short, and product and service demand is constant (Long, 2010, p. 40). Additionally, the product/service provided is fairly simple, and the technology is not complex (Long, 2010, p. 512). The

In the case of Mendel Paper Company which produces four basic paper products lines at one of its plants: computer paper, napkins, place mats, and poster board. Although the plant superintendent, Marlene Herbert is pleases with increased sales he is also concerned about the costs. The superintendent is concerned with the high fixed cost of production, the increases in fixed overhead and even variable overhead. He feels that the production of place mat should be discontinued. His reason for the discontinuation is that the special printing is driving up the variable overhead to the point where the company may not find it profitable to continue with the line. After reviewing the future predictions of the

Star Appliance is looking to expand their product line and is considering three different projects: dishwashers, garbage disposals, and trash compactors. We want to determine which project would be worth doing by determining if they will add value to Star. Thus, the project(s) that will add the most value to Star Appliance will be worth pursuing. The current hurdle rate of 10% should be re-evaluated by finding the weighted average cost of capital (WACC). Then by forecasting the cash flows of each project and discounting them by the WACC to find the net present value, or by solving for the internal rate of return, we should be able to see which projects Star should undertake.

Being the world’s largest paper maker indicates having a larger inventory, more current assets (esp. since it owns timberland and several facilities), and higher cost of goods sold than other paper makers. The inventory for Company J (10.9) is larger than the inventory for Company I (8.8); the current assets for Company J (32.6) are higher than that for Company I (27.2); and the cost of goods sold for Company J (82.9) is higher than that for Company I (75.3). We also expect that, as the world’s largest paper maker, their products will move on the marketplace better than a smaller producer of

A down payment of $70,000 would be required, and a first year interest payment of $45,370 (Exhibit 9). It is expected that the two machines would run at 40% capacity bringing in incremental revenue of $613,225, and incremental operating income of $234,855. The cost breakdown structure and the incremental gains for the laser cutter and water cutter can be seen in Exhibit 10. The ROI at 40% capacity is 33.80% (Exhibit 5), which is well above the banks lending rate. The payback period at 40% capacity is the lowest of all options at 3 years (Exhibit 6). With a score of 30, this option scored the highest against the decision criteria (Exhibit 7). This is largely due strongest cash flow, highest ROI, and emphasis on maintaining a high quality product and excellent costumer service.

Carded Graphics, a business that is driven by being lean, agile and efficient in all aspects of their daily operations so that it can survive, thrive, and prosper in the $160 billion paper products industry. Carded Graphics is part of the $10 billion sub-industry in the paper product industry. Murry Pitts is the owner and president of Carded Graphics; he was driven to make his company be the best it could be. Carded Graphics operations are handled by 90 individuals who work out a 125,000-square-foot facility that is located off U.S. Route 81. Murry’s business operations are focused around the concept of made-to-order – in order to keep costs low, the organization would make large production runs and keep their finished good inventory high and distribute the customers order based off their previous request of smaller orders. The entire folding carton industry was being flipped upside down by the implications of technological advances. Especially the niche market that Carded Graphics business was directed towards. Organizations that can provide customers with a seamless information infrastructure that allowed clients to specify their needs and see the final result and are able to adjust their needs based off the final product were succeeding.

Xerox Corporation introduced the “leadership through quality” which encouraged the corporation to find ways to reduce their manufacturing costs. The corporation carried the exercise against their Japanese competitors Konica, Minolta, Cannon and Kyocera and they found out that ‘it took twice as long as the Japanese competitors to bring a product to market with five times the number of engineers, four times design changes and three times design costs” Xerox online (2017).

Ricoh’s brand was an international leader in the digital imaging and document management industry. Ricoh Canada Inc. is a wholly owned subsidiary of Ricoh Americas Corporation with a head office in Toronto and headquartered office in Japan. The primary source of Ricoh’s revenue – delivery and maintenance of printing and copying devices to different customer segments. As of 2012 CEO of Ricoh admitted that the technological advancement disrupted RCI legacy business and thus create a lot of issues to the company. The primary issue that Ricoh has been facing is inability to prepare and develop company to future forecasts that has been made towards the changes in the industry that leaded the company to unsuccessful reaction of quick establishment of the environment where company could grow along with customer’s trends in their demands. This report shows full identification and analysis of primary issue, provides

Prepared by: Team 3, Section 1 Eshhad Islam 3515729 Yuanzheng Xu (Fiona) 3483393 Veena Gadhave 3518464

Carded Graphics (CG) is a medium-sized competitor in the $160 billion U.S. folding carton industry and specializes in smaller, highly customized orders. CG, along with other players, grew to dominate the small-order niche very early in its lifespan due to its ability to provide a seamless information infrastructure linking client specifications to final products and its speed to market and quality. Despite its early success, CG saw growth stymied from 2007 to 2008, with the tightening of margins that resulted in a reported loss for the year. By 2009 sales had exceeded 2008 sales levels and operating margins had returned to the 2007 level, however, net income had not improved at a pace proportionate to sales. Now, in 2009, to alleviate this stagnation and to exploit efficiencies, CG is determining whether to augment its current sheeting process with a new sheeter that has higher capacity.

Carded Graphics (CG) is a modest-sized competitor in the $160 billion U.S. folding carton industry and specializes in smaller, highly customized orders. CG, along with other players, grew to dominate the small-order niche very early in its lifespan due to its ability to provide a seamless information infrastructure linking client specifications to final products and differentiate through its quality and speed to market. Despite its early success, CG saw growth stymied from 2007 to 2008, with the tightening of margins that resulted in a reported loss for the year. By 2009 sales had exceeded 2008 sales levels and operating margins had returned to the 2007 level, however, net income had not improved at a pace proportionate to sales. To alleviate this stagnation and to exploit efficiencies, CG is determining whether to augment its current sheeting process with a new sheeter that has higher capacity.