Albatross Anchor Unit 3
MT435 Operations Management
Kaplan University ntroduction: My name is Aiden and KU Consulting has asked me to prepare a bid on the consulting job with Albatross Anchor. With the information provided to me I am able to go through and analyze the operation as it is running and suggest how to improve the operations to be more competitive with the other anchor manufactures and to increase profits for the company, Albatross has been in business since 1976 with four family members. It has grown to employee one hundred and thirty people. The location of the manufacture is located in a rural suburb it is on twelve acres in Small-town, USA.
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
Due to operations inefficiencies the productions cost is much more than that of their competitor’s Cost of productions is calculated by what it takes to produce the products and what the output is. The cost of labor hours, machines hours, cost of materials and the cost of energy used to produce the units. Albatross Anchors is showing a cost disadvantage compared to the competition as far as the production cost goes due to the ability to only manufacturing one style of anchor at a time. The space is limiting the manufacture to produce mass quantity of products at a time.
b) Economies of Scale in material purchasing cost.
Economics of Scale is when it costs less per unit to produce high levels of output (Taylor, Russell 2010, pp 160). If Albatross Anchors were able to produce more anchors at a time to be able to spread the fixed cost over a larger number of units and production or operating costs do not increase with linearly with output levels. The cost of material would also be discounted if they would buy in quantity. The cost of labor would
Kaplan University ntroduction: My name is Aiden and KU Consulting has asked me to prepare a bid on the consulting job with Albatross Anchor. With the information provided to me I am able to go through and analyze the operation as it is running and suggest how to improve the operations to be more competitive with the other anchor manufactures and to increase profits for the company, Albatross has been in business since 1976 with four family members. It has grown to employee one hundred and thirty people. The location of the manufacture is located in a rural suburb it is on twelve acres in Small-town, USA.
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
Due to operations inefficiencies the productions cost is much more than that of their competitor’s Cost of productions is calculated by what it takes to produce the products and what the output is. The cost of labor hours, machines hours, cost of materials and the cost of energy used to produce the units. Albatross Anchors is showing a cost disadvantage compared to the competition as far as the production cost goes due to the ability to only manufacturing one style of anchor at a time. The space is limiting the manufacture to produce mass quantity of products at a time.
b) Economies of Scale in material purchasing cost.
Economics of Scale is when it costs less per unit to produce high levels of output (Taylor, Russell 2010, pp 160). If Albatross Anchors were able to produce more anchors at a time to be able to spread the fixed cost over a larger number of units and production or operating costs do not increase with linearly with output levels. The cost of material would also be discounted if they would buy in quantity. The cost of labor would
References: Roe, S (2010) Cite Management Article Repository of Cite. Co. The importance of operations Management, Retrieved: http://www.citeman.com/10630-the-importance-of-operations-management-2.html Russell, R. & Taylor, B. (2011) Operations Management Creating Value Along the supply Chain 7th Edition, New Jersey: John Wiley and Sons, inc. Tompkins, Bruce (2002) Managing Principal, Tompkins Associates Speed Manufacturing’s New Competitive Challenge. Retrieved: http://www.maintenanceresources.com/referencelibrary/ezine/speedchallenge.htm Wysk, R., Wang H.and Chang T.(1998). Computer – aid Manufacturing, Second edition Design for Manufacturing – Guidelines. Retrieved: http://www.unm.edu/~bgreen/ME101/dfm.pdf