Economics and Lead Time

The company started off producing 20,000 units of mountain bikes. We did not change the production quantity. Last year our forecast sales were 24,000 when we only sold 19,866; therefore we thought it would be best to leave production at 20,000 bikes. Having excess inventory, we concluded that 20,000 units should be enough considering our quality has not changed and our advertising will not increase the sales dramatically. Although we had the choice to produce as much as 30,000 units, we felt as though we did not have sufficient money to increase production. We were interested in allocating the money towards marketing as opposed to production. We realized that without awareness, no matter how many units we make, sales would be inefficient.

investing in plant upgrade option B at one or more of the company's plants (but most especially its smallest plants where the savings on production run setup costs are big enough to allow quick recovery of the associated capital costs).

1. State the business case for option #3, the PCB In-sourcing proposal. What is the benefit? What is the risk? How do you compare this proposal to option #1 and #2?

a) In the first set of calculations, the staff used a discount rate of 20%, a five-year time horizon, and ignored taxes and terminal value. What is the relative attractiveness of these three alternatives?

3. What criteria did you use to evaluate the potential solutions? How did these criteria tie into business strategy and project objectives? How does

Answer: It seems like Bridgeton and its consultants assumed that the savings from outsourcing those two products would be 435% of the direct labor dollar cost for those products - calculated amount $53,496.

Ralph suggests building only one section at a time – cellular manufacturing. In this case the operation becomes so small that the planning and control system designed by Joe becomes redundant.

Answer 3. Plexet will adopt the just in time approach to production to improve the business

Chad Thomas needs to make sure daily manufacturing schedules are aligned with the current orders. The fact that the same set of employees and the same set of tools are being used to manufacture both the custom and the standard pieces of furniture is definitely problematic. In order to meet the demands of each product, it is critical that scheduling be created in the most efficient of manners given the current constraints. Allocating all the resources properly is a key along with scheduling and layout. In regards to long term decisions, Mr. Thomas is going to have to decide

Part D: What are the advantages and disadvantages of the newly suggested distribution strategy relative to the existing distribution strategy?

From an operational perspective, the annual sales growth of 2% is behind the industry average of 6% per

No wonder CyraCom is placed within the Top 15 companies reporting an average rate of growth of 72.75 percent growth in 2008. ("Second annual ranking," 2011)

2) Given that BT Yellow Pages accounted for 85% of the U.K. classified directories advertising revenues, we assume it would keep the market growth rate of 5.5%, above 2001 yoy data 4.9% in 2001 but below the 1996-1999 industry data

assemble. Most of the people need new designs everyday and opt for the best. And people

As stated in the case study of “ On-Time Package Delivery”, the first year of business was successful, bringing in revenue and steady customer need in the market for the service. Customers were many big firms and businesses in large cities. Also, they emphasis the importance of their employees, especially their sales force. The sales force is not only responsible for generating business and relationships with customers; they are the face of the company. These are the representatives that customers deal with directly and voice their opinions to. The next category of the sales force of On-Time is the Key Account Managers. They are responsible for the big accounts in the company, such as corporate accounts. The company became in