Cj Industries and Heavey Pumps – Discussion Questions Essay

To calculate optimal pricing I used MC outlined in the case as based on volume of drives produced weekly. Fixed costs of plant and equipment were not included in this analysis although are later evaluated for breakeven time frame.

I do not think that Fountaine should have called Meredith for a clearance to add thee clauses. I think they should reevaluate their marketing approach. They should figure out ways to meet the objectives at Pacific Oil. Try to look at obstacle that they would likely encounter. Decide what their minimum acceptable goal to extend the contract. They need to be prepared to set target dates for negotiating and reassessing Relients needs so that meet date can come to a positive conclusion.

In using the ABC system, Valves and Pumps are matching the company’s target of 35% of gross margin apart from Flow Controllers. With the use of TAC, the gross margin on pump sales is 19.5% that well below the company's target gross margin of 35%. This indicates that the current overhead cost allocation practice did not reflect the real costs incurred on the products. The lower actual gross profit obtained was mainly due to wrong cost allocation on the pump product.

Q1: Do you believe Mary has adequate inputs to decision-making or is it that he really needs an real and good research ?

Wilkerson’s competitors have cut prices on their pumps, in order to maintain market share, Wilkerson also cut the price of their pumps. This dropped Wilkerson’s GM by about 15%. At the same time, Wilkerson was able to increase the price of their flow controllers by 10% without a drop in demand.

Siam Cement’s offer to purchase an initial order of 200 units at $9,000 per unit, would lead to a net profit of $200,000. While this immediate cash influx may seem advantageous in the short term, it will not offset yearly operational expenses of $250,000 (See Exhibit 1). Additionally, accepting Siam Cement’s offer would position Rubbertech as an Original Equipment Manufacturer (OEM). This decision could impede potential growth that would far exceed the offer that is currently on the table. If Rubbertech does not accept Siam Cement’s offer, they can seize a part of

Marketing is challenging for Wilkerson because they are no longer holding a competitive advantage in the valve product line, nor are they price leaders in the pump line.

As Motorking Corporation considers introducing its now “gas extender” product into the market, the management must consider various factors to determine if this is a good financial move. The production manager needs to determine if the product will generate a profit for the corporation, how much product is expected to sell to determine how much to produce and how much to outsource.

"The HyGain-Telex plan in Lincoln, Nebraska, manufactures antennas. It currently has an U.S. Army contract for Model X32 antennas. The contract requires a production rate of two hundred Model X32s per day. The contract quantity may be changed quarterly."

In order to meet customer demands for higher product quality, to comply with federally-mandated environmental regulations, and to reduce production costs, HCC must spend $2,000,000 within the next three years to upgrade equipment. The upgrade is expected to result in production efficiencies that will lower material and labor costs by reducing defective products, process waste, in-process inventory, and production man-hours through simplified work processes. It has been over a decade since significant modifications were made to the production facilities. Those changes were mostly technical in nature and did not substantially alter work processes or reduce overall employment. The average productivity gain in the industry for the past five years has been 3% per year. Financing for the loan to purchase the equipment

This case analysis explores the possibility of Breezy, a leading supplier of carburators and air filters in North America, the possibility of developing offshore busines in countries where car manufacturing is growing. The report is structured as follows: First, there are five important questions that Breezy must consider and ask itself before developing a relationship with a new customer. After Breezy decides to go offshore, it will have to go through the negotiating process, which involves five steps. Breezy then, must have capabilities of how an offshore business is organized, consider the many different costs and risks involved in the implementation and decide how it will finance the project. The report also talks

A.O.Smith water products located in McBee South Carolina is requesting a budgetary quote for one tank forming horizontal head press machine. Attached are drawings and breakdown structure of the tanks that will be assembled on the new head press. Should you have any questions please feel free to contact me at any time.

7. Discuss how the compliance and governance changes are likely to impact the future profits and shareholder value at Baker Hughes.

* The Pumps total product variable costs are $406,250, the Pumps total fixed costs are $316,501.94 and the Activity Based Costing Pumps cost per unit it $58.

The savings for the customer, however, comes from the savings in labor costs. Estimating a total of $714 labor costs/hour (Exhibit A), the approximate labor savings totals $5.08/foot driven (using Sanwal’s conservative estimates of 292,000,000 feet driven per year, page 5). Comparatively, CMI pads result in only $3.57/foot driven. On a job of 15,000 feet, the difference in value is $22,650 in saved labor costs alone. Consequently, a customer should be willing to pay $5.28/foot driven for the CMI Cushion Pads (see Figure 4). With this value-added, CMI can charge up to $2,837 for one pad, which would make the price exactly as much as the cheapest competitor (including labor costs). With that price, CMI would only have to sell 21,854 pads (which would service approximately 12% of the market, a feasible goal for CMI’s entrance) to make $62,000,000.00 (VP Joseph Fernandez’s approximate sales goal). The recommended CMI price, however, is $1986.34 (which is the value-capturing price of $2,837 with a 30% reduction). With an estimated 292,000,000-390,000,000 driven feet per year, the pile-driving