Free Man Bio Test Strategic Operations

b. If the company had set a goal of increasing sales by 28% during the next five years, what should be the sales goal for 2008? 4,113,223.68

company’s finished goods inventory has shot up to a 60 days supply – twice the normal level. In addition,

two years, with the first year of production reaching 5,000 tons per day (200 production-days per year), and

(c) What will Yabba’s market share have to be next year for its profit to be the same as this year?

1. In the last five years the growth in sales for the company has been around 10% per annum, except for the 1997, the growth was 18.78%. In the case, nothing is mentioned that company has made any drastic changes in its strategy to grow faster. In such a scenario, projected a consistent growth of 20% per annum for the next 5 years is too optimistic.

In order to meet both of Northcutt’s objectives of reducing inventory and increasing service levels, Northcutt should implement a continuous review system to manage inventory. Based on the calculations provided in question 2 of the appendix, managers at Northcutt will need to set the reorder point for part FB378 at 118 units and 296 units for part GS131 for the

b) What is the firm’s forecasted average daily sales for the first three months of operations? For the entire half-year?

The line’s maximum capacity amounts to 791.67 units per day assuming that it is operated for 7.5 hours. Assuming that X-Opoly operates 200 days per year, the capacity is 58,333 units per year. Compared with the expected demand the capacity is three times higher than the demand (50,000 units). Therefore there is an overcapacity of more than 100,000. One consequence could be a falling price and the production of waste. A fall in the price would lead to a decline of the return on investment as well as the cash flow. That is why it is necessary to use fewer stations in order to save resources.

* Production capacity is 10,000 units a year however they hope to construct a $45 million facility with a capacity of

a. Assuming the most current operational cost levels, what sales must it generate to recoup the above investment?

Michael Porter’s article, “What is strategy?” sets to explain that both operation efficiency (OE) and strategy are required for reaching superior performance, but further clarifies and emphasizes the misnomer that OE is not strategy.

The company is using a batch shop process flow structure. CBF, Inc. bases its board fabrication process on the average job size or on its typical order. This means that the company proceeds with the manufacturing process in batches so as to meet the specific requirements per order. The typical contract that the company currently gets is 60 boards per order. However, due to persisting factory defects, they manufacture a total of 75 boards per batch in order to compensate for 20% of the boards that they typically reject during the process.

Thompson, Arthur A., Strickland A. J., Gamble, John E. (2010). Crafting and Executing Strategy. McGraw-Hill Irwin. (Ed.) Boston

Question B: How many units per year must be sold with each process to have annual profits of $50,000 if the selling price is $6.95 per unit?

1. Sales forecast – (at $ 30 retail price with the assumption of $15 whole sale price)