Unit 3: Albatross Anchor Essay

1464 WordsOct 11, 20126 Pages
Question One Based on the information presented in the scenario/case study discuss Albatross Anchor’s competitiveness in relation to (please address all items in the below list and provide support for your conclusions): 1. Cost a) Cost of Production: Cost of production is costs incurred by Albatross Anchor when manufacturing an anchor. There are two types of costs – fixed and variable. Variable costs depend on what materials and labor are needed to make the anchor and vary with the volume of anchors produced. Fixed costs, such as rent or utilities, are always constant no matter how many anchors are produced (Russell & Taylor, 2011, p. 230). Manufacturing costs are $8.00 per pound for the Albatross mushroom/bell anchor and $11.00…show more content…
“How much to increase capacity depends on (1) the volume and certainty of anticipated demand; (2) strategic objectives in terms of growth, customer service, and competition; and (3) the costs of expansion and operation” (Russell & Taylor, 2011, p. 259). The current layout is not functional for Albatross. The finished products are on the opposite side of the warehouse as to the shipping department. Assembly systems must be designed to be responsive to customer needs while at the same time achieving mass production quality and productivity (Zhu, Hu & Koren, 2008). Another problem with the layout is the shipping and receiving. Ideally it would be nice to have both on the same side of the building instead of taking up a third of the building. Mixed model manufacturing is to make different anchors every day, according to the work orders and to avoid inventory accumulation. Mixed model manufacturing is also the ability to manufacture in small batches with a quick changeover from one anchor to the other (Russell & Taylor, 2011, p. 282). Albatross can accomplish the small batches but they need to have a faster turnaround time of 36 hours between anchor products. 6. Service to customers Albatross does not seem to have a problem with customer service. They are a wholesaler which means they only work with distributors and do not sell directly to the public. As a wholesale manufacturer it is important for Albatross to keep and maintain good

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