Industrial Grinders

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.

Using the assumptions given in the case, all elements of income statement and balance sheet can be projected for next three years 2010, 2011 and 2012. Sales cycle of the products of the company is such that sales of a particular product increases initially for few years and then starts to decline as the new technology

Try to reduce overall production runs by aggregating different orders, thereby increasing batch size. Marketing strategy of delay in turnaround time is required to achieve this

2. Make some minor changes in the production line to minimize flexibility-accuracy and accordingly reduce the cost.

The company is looking to increase profitability and find a long-term solution to the inventory problem.

b. The direct-response advertising results in probable future benefits. Paragraph 340-20-25-9 discusses the conditions that must exist in order to conclude that direct-response advertising results in probable future benefits.

3. The great deal of bargaining power of supplier and customers cut down the margin of metal can manufactures.

We adjusted focus to our niche market, sold off capacity in the low end and traditional markets, and proceeded to decrease our production going into the next round. While selling capacity was the correct financial decision to combat our emergency loan, we were then left with stock outs in all of our product lines. As a result, we continued to struggle with overproduction and avoiding stock outs, but made improvements resulting in less drastic inventory swings in the later

In regards to the steel rings that are already finished:  They should continue to sell these to customers who prefer (in all markets) them over the plastic rings AND they should also continue to use these rings in the industrial machines and equipment they are manufacturing and then when they need replacing, use the plastic rings instead.  The steel rings should be used and/or sold until all inventories are depleted.  They should “phase” them out.

This report provides an analysis and evaluation of constraints in the production process for the Model C210 and the Model D400 of the Five Star Tools product line. The significant growth the company has experienced in recent years has led to a strain on the firm’s production capacity. This report seeks to determine how to loosen constraints on production and identify the most profitable product line given current production limitations. Incremental analysis is used to determine both the benefit of one additional hour of production time in the coating and sharpening process and the incremental yearly profit associated with adding a new inspection station.

Some customers could also just prefer to have the steel rings over the plastic rings despite all of the advantages of the plastic ones. He would also have the opportunity to sell the steel rings at a premium price. However, if he decided to wait until after the steel rings are being produced our group concluded that he could lose potential and current customers.

Chabot needs to increase the flexibility in its supply chain. Chabot is an innovative product manufacturer trying to utilize an efficient supply chain. In order to be able to meet demand, the company needs to deploy excess buffer capacity. Lead time is not up to par so Chabot needs to increase its inventory if it plans to meet unpredictable demand. This will also help increase Chabot’s level of

Produce more products so there is less restocking issues but not more than the market calls for (supply and demand),

Firstly, it is strategically beneficial for the company to continue to produce products A, C, and D. However, you should discontinue production of product B, as it is unprofitable and is losing the company money. Product B has been losing the company $2,307 per reel. If the company deems it is essential to keep producing product B in order to retain their customer base, we recommend changing the production schedule. For example, during times of lower demand, you can produce products such as B that do not make as much money, but you will still retain your customers’ business and satisfy their needs. During times of higher demand, by discontinuing the production of product B, the company will be able to produce the more profitable products such as A, C, and D.

The main reason that should convince Mr. Kiefner to look at reducing the cycle time is due to a customer requirement. Elly Ryesham, from the Sales Department, realized a straw poll of the sales force to understand what the most important things are for their customers. I have analyzed those results (see Exhibit 1) and converted the A,B,C… grades to numbers (A+= 4.33, A=4, A-=3.66 and so on