Danshui Plant No.2

This is the case of huge fixed cost involved in production, so the argument goes like this, if they will stop manufacturing, there will be a huge loss for them including the total fixed cost and sunk cost, which cannot be recovered.

The production process for the facades and slabs are identical, however the plant capacity are uneven. Unicon uses subcontractors to provide labour for this production. One subcontractor provides 2 teams of 4 for slab production, while another subcontractor provides 3 teams of 4 for slab production. The plant has 25 facade moulds and 64 slab moulds. Some slabs could be used to produce 2 slabs and daily

Samsung’s efficiency was also driven by the quality of its employees. All R&D and production engineers lived together in the same company-provided housing, which lead to quick design, resolve and process any issues in design or production which in turn led to quick turnaround time, lower idle times and increased productivity. Also, the site was located in the mountains where the air was fresh and clean, which meant lower maintenance costs since most machinery was highly sensitive to dust and other particles

Peter’s Peripherals assembles multimedia upgrade kits --- sets of components for adding sound and video to desktop computers. The demand for their kits for the next four quarters is estimated in the table below. Unit manufacturing cost for each kit is $160. Holding costs on each kit is $80 per quarter. Any kit that must be delivered late is assessed a backorder cost of $120. Each worker is capable of finishing 10 kits per quarter. If the company chooses to vary work force levels, it will incur costs of $400 for each additional worker; $600 for each termination. The company currently has 28 employees.

Danshui Plant No.2 is a contract manufacturer locating in southern China and was assembles electronic products for companies wishing to save labor costs and they are using semiskilled labor for less than 1 dollar an hour. In August 2010, Danshui Plant No.2 in southern China has a 1 year contract in the period between 1 June 2010 and 31 May 2011 with Apple incorporation to assemble the Apple iPhone 4. Based on the contract, Danshui need to assemble 2.4 million iPhones within 1 year. However, Wentao Chen, manager of Danshui Plant No.2 was anxious about the plant is not able to assemble 2.4 million as their expected and is operating at a loss when the third month of the contract. Their current production was only 180,000 units

Going into 2004, Bob Moyer planned to produce 10,000 bicycles at Mile High Cycles. Construction of his bicycles includes the utilization of three departments, frames, wheel assembly, and final assembly. During this year, Mile High Cycles ended up actually producing 10,800 bicycles to meet higher than expected demand. Bob is curious as to whether or not he was successful in maintaining costs to meet these higher levels of demand.

The high technology system reduced the need for transportation of materials and decreased production time, thereby increasing the all-round efficiency and quality of production

Also, according to break-even analysis operating with the single mold and excluding warehousing costs, a minimum of 12,035 units must be sold to break even. Under a similar situation with the double mold, 15,507 units must be sold to break even, which is about half of the optimistic sales projection. Also under the optimistic sales projection, a positive return on investment is expected. Because the company is turning profit,less additional investment is required. Additionally under the pessimistic and expected situation, the company turns losses, and under the optimistic projections, Chef’s Toolkit only has a net income of 13% of its revenues. Selecting Preferred alternative According to the above information and the projected pro-forma statements, Dale Reid should not invest his money in the company. The company’s lack of current assets, high expenses and low per-unit revenue create an unfortunate and unprofitable investment in pessimistic and expected situations. Only in the optimistic production and sales does the company begin to turn profit, but this profit is low. Chef’s Toolkit needs desperate restructuring and additional revenue sources before Dale Reid should invest. Developing

Break even analysis can be used to decide whether to alter the existing product emphasis or not. For example in this case, if we refer last year’s data, we can see that the product C is not economically feasible to manufacture at $2.40 / unit. Following table gives the analysis for checking whether the company can afford to invest in additional “C” capacity.

A company's break-even point is the amount of sales or revenues that it must generate in order to equal its expenses. In other words, it is the point at which the company neither makes a profit nor suffers a loss. Calculating the break-even point (through break-even analysis) can provide a simple, yet powerful quantitative tool for managers. In its simplest form, break-even analysis provides insight into whether or not revenue from a product or service has the ability to cover the relevant costs of production of that product or service. Managers can use this information in making a wide range of business decisions, including setting prices, preparing competitive bids, and applying for loans.

And the reason of it was still the cost. Indeed, this former strategices failed to match their product characteristics with their supply priorities. That is, it cannot minimize their product cost. For example, using Japanese suppliers before was twenty to thirty percent more empensive than using Chinese suppliers, not to mention about the trasportation cost. In addition, their original Japanese design was still increasing the cost in China’s factories ----- increase equipment cost cannot make good use of the cheaper labor cost in China; increase producing cost by designing unnecessary function in China.

6. The company has three main problems: the first problem is that they may unable to complete 200,000 IPhone 4 units in any of the three months they have been working on the contract. The second problem is they cannot hire more workers. The third problem is the company have problem with the Samsung flash memory installation. We have some suggestions for the company to solve these problems. Firstly, Danshui Company should improve their salary policy. We recommend company should motivate workers to produce more efficiently, for instance, they can set a basic salary for workers and offer them bonus if workers complete target. Secondly, the company should provide professional training for labors. So they can work more efficiently. After workers becoming more professional, the company cannot only use less labor hours, but also save more materials. A third suggestion is that Danshui Company should also improve the quality of production supervision. They should hire a more professional supervisor who is familiar with the production process and is able to build a good relationship with labors, so they can work more efficiently and the company can even save more money on materials.

South Korea has been growing increasingly popular as an alternative production base for overseas manufacturers in the past years. Basic production industry’s benefit in terms of cheaper price of labor and land is now almost gone in South Korea. However niche regions are still available and good skill labor, technology and reasonable expenses are expected in terms of our company’s needs that should make skillful and cheap technology labor.

In evaluating the financial performance of Digisafe, the computation of the following figures reveals the profit or loss for the short term and long-term basis. The information for the calculation includes 100 workers, 70 per day, 20 per month, units 6000, price 32, and other variable costs at 2,000 per day. See chart below:

Two locations were found to be appropriate for the plant, first is on Kimberly Street just a few blocks away from the main plant. Second being located in Hampton, which is small town around 180miles from the main plant. The Executives of the company decided that they will eventually require minimum of 75000 Square feet of floor space and 600 labors (300 Skilled, 150 Semi-Skilled, 150 Unskilled) so as to operate efficiently. The estimated cost of the machinery and equipment needed to manufacture the parts is around $2 Million and this requirement was met by the government by equipping them with government owned equipment under a contract.