Question One
Based on the information presented in the scenario/case study discuss Albatross Anchor's competitiveness in relation to:
(a) Cost (i.e. consider cost of production, economies of scale in material purchasing, cost or raw materials and finished goods sitting idle in the warehouse).
(b) Speed of manufacturing process from order to finished product.
(c) Flexibility in filling order(s)
(d) Technology
(e) Capacity and facilities. The current floor plan is inefficient. Please tell what about the current floor plan makes it inefficient and give recommendations for improvement. What type of factory would be best for mixed model manufacturing?
(f) Service to customers (what types of services would an anchor company provide to marine wholesalers?)
Be sure to address all items in the list (above) and provide support for your conclusions.
Question Two
There are many ways that mushroom/bell anchors may be manufactured. Albatross Anchor is considering two new manufacturing processes (Process A and Process B) to reduce costs. From the available information below determine which process has the lowest breakeven point (this validates the process is more cost effective) and report your analysis and supporting conclusion.
For each process the following fixed costs and variable costs are identified below:
|
Anchor and Process
|
Process A
|
Process B
|
|
Sale price per anchor
|
$ 45.00
|
$ 45.00
|
|
Total Fixed cost
|
$ 650,000.00
|
$950,000.00
|
|
Variable cost per anchor
|
$ 36.00
|
$ 29.99
|
Based on the above information identify:
(a) The total fixed costs per anchor for Process A and Process B
(b) The total number of anchors needed to break even for Process A and for Process B.
Enter your answers into the chart below.
| Anchor and Process |
Process A |
Process B |
| (a)Fixed costs per anchor |
|
|
| (b)The total number of anchors to attain break-even point for Process A and Process B |
|
|
(a) From your calculations identify whether you would recommend Process A or Process B for adoption (select only one). Please make sure to explain how you arrived at your conclusion.