Mt435: Operations Management Unit 8

Topics: Costs, Manufacturing, Anchor Pages: 3 (612 words) Published: April 30, 2013

Albatross Anchors is a small business that operates in an old facility. They are wanting to compete better with their competition. They need help to continue on with their manufacturing.

This paper will look at the cost of production and a new production method to help reduce costs.

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:
According to the case study, it Albatross $8 per pound to make the mushroom anchor and $11 per pound to make the hook anchor. It also states that they charge the same as their competitors. I think in relation to the cost of the product Anchor competes pretty well.

b) Economies of Scale in material purchasing:

c) Cost of Raw Materials Sitting Idle in the Warehouse:
Albatross is competitive in this area, they have a small space to store raw materials so they don’t keep a lot of materials sitting around.
d) Cost of Finished Goods Sitting Idle in the Warehouse:
They are comparative in this area as well. Albatross ships things out when they are done so they don’t sit around very long. 2. Speed of manufacturing process from order to finished product.
Albatross’s speed of manufacturing process is poor. It takes them 36 to switch from one process to the next which takes considerable time away from production. 3. Flexibility in filling order(s)
Albatross is not very competitive in this area. It takes 36 hours to switch from one anchor setup to the other. If they get an order for each due on the same day they might not be prepared. 4. Technology

According to the reading the technology at Albatross is way behind, which means they aren’t very competitive in this area. 5. Capacity and facilities
Albatross doesn’t have a lot of room for storage of raw materials or finish goods. There is...
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