The Four Flexibility Improvement Options

The three scenarios illustrated above clearly shows that the investment in the new machine creates greater value to the company, unless there should be some unexpected turnout in sales. By acquiring the Vulcan Mold-Maker machine Fonderia di Torino S.p.A will be able to replace labor intensive required semi-automated machines with automated machines, thus reducing medical claims. The company will also benefit from higher levels of product quality and lower scrap rates. Labor costs will be reduced by almost 298,334.4

When making a purchase to improve on many areas of operations there are always factors to take into consideration. There will be a great amount of capital expenditure for this equipment; however the potential for higher return on investment is remarkable. The initial cost of purchasing the MAGNETOM is approximately $ 1 million. There will be an additional cost of $500,000 to operate and maintain the machine. These costs will be reimbursed within the first eight months of extensive utilization if the all marketing for the machine is on point. Since we are currently paying a technician to operate our out of date machinery, there is no reason why this prediction cannot become reality. There will also be an offset of income inherited by the lack of errors made by the technicians after they have trained for the new machine . ("Magnetom espree -," 2013)

There are many trade-offs for each of the decisions that a company makes within all three types of these cost types when quality consideration is used. If the company decides to put more time into training employees properly on operating machines and

The second strategy, referred to as a "Cold Idle Status", would keep the plant on “alert” to ramp-up to full rate production in one month from turn-on only if the market makes a full recovery. This may appear to be an attractive option. However, the market only reaches a full recovery under the most optimistic scenario in 2004. Therefore, the probability of regaining profitability, paired with the annual incremental recurring cost of $6M for payroll and skeletal staff makes this a risky approach. The fixed costs associated with a Cold Idle approach outweigh the probability-discounted revenue. This approach, without an investment to improve our yield, is not recommended.

Acquisition of the automated milling machine will increase the apparent costs of all jobs—not just those that use the new facility. This is because the company uses a plantwide overhead rate. If there were a different overhead rate for each department, this would not happen.

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

In the case of Mendel Paper Company which produces four basic paper products lines at one of its plants: computer paper, napkins, place mats, and poster board. Although the plant superintendent, Marlene Herbert is pleases with increased sales he is also concerned about the costs. The superintendent is concerned with the high fixed cost of production, the increases in fixed overhead and even variable overhead. He feels that the production of place mat should be discontinued. His reason for the discontinuation is that the special printing is driving up the variable overhead to the point where the company may not find it profitable to continue with the line. After reviewing the future predictions of the

Incorporating flexibility is required in all work plans as many occurrences could happen that derails you from your work/project [7]. An example of this, was whilst working in the procurement department, I had a project which consisted me researching into a new travel management system and to write a strategy for which company could offer Tarmac a competitive package. It heavily involved me communicating with other travel management companies, other departments to get data and then writing a detailed report of my finding of the most beneficial package to key stakeholders.

Brief summary of information: Provides suggestions and options for employer on developing and managing equitable flexible work practices.

The above cost system was efficient during the 1980s because it split up overhead over three cost pools, adding an additional pool, which has machine hours as its cost driver. This proved efficient because “[w]ith increased usage of automated machines, direct labor run time no longer reflected the amount of processing being performed on parts, particularly when one operator was responsible for several machines.” Packet, pg. 7.

Andres was forced to import product from French division as he ran out of capacity several times due to new machines performing inadequately. This added an overhead expense of approximately 2147 (Additional maintenance costs + Transfer costs)

3. What weekly production plan for standard and light weight compressors would result in the highest financial return for Catawba?

Furthermore, the ACC strategy of offering increased variety requires shorter production runs which inherently increases the cost associated with each product and packaging, as idle time due to process changeover would increase between each product production (4.8% of time com-pared with 2% for DJC). The strategy of increased variety and production runs by the ACC would also affect labor in a number of ways. Direct labor costs would go up due to a larger amount of idle time associated with process changeover and the chance of increased problems associated with the

My dad has a textile business, involved in embroidery and painting of the fabric. I have been visiting my dad’s office complex and observing the whole process of clothes manufacture. The most important asset for the business is a large machine required for whole painting process. The existing machine with the business is in use from past 4 years and has to be discarded due to some operational issues. As a student of finance, I will analyze the option of replacing this machine with a new one. In analyzing various options from where to purchase the machine, I searched for various dealers, and compared the products with the prices they offered. I narrowed down the choice to one machine provided by Stihl Machinery Co., Ltd. But then dad’s financial manager, Mr. David Jones, asked me to reconsider the option. He suggested that the existing machine can still run for another 5 years and the new machine is also expected to work for just five years. Also, the price of the new machine is quite high so it is better to continue using the same old machine. On this argument, I decided to do a detailed analysis of the option to replace the old machine. Only after the financial analysis, I will decide and suggest whether to buy the new machine or not.

Even when the demand for an operations products can be reasonably well forecast, the inherent uncertainty in all estimates of future demand may inhibit the business from investing capital to meet the most likely level of demand. Contrastingly, this principle can be linked to the concept of economies of scale. For BCF the addition of one unit of capacity i.e. from the extra capacity provided by the conventional technology option, the total fixed costs per unit of potential production output will decrease. For the new technology option, the addition of one unit of capacity will increase unit costs – a diseconomy of scale. Initially, this claim is based on the capital cost of implementing the new technology option, as well as diseconomies of over using capacity having the effect of increasing unit costs above a certain level of output. As a result, more operations activities