Adamac Inc.
ADAMAC Inc.
An Analysis of Production and Cost Theory
Group III
Osvald Ronald David Tjahjo
Agenda
• • • • Company’s Overview Current Issues Case Analysis Recommendation
2
Overview of Adamac Inc.
• Provide services of jet cutting (laser, water jet, wire) built by Ryan Olliver and Ben Watts, previously worked for Perts • Adamac was built with an objective to provide more efficient and higher customer service • Adamac had started with used water jet, used laser cut machine, and wire cutter machine
3
Partnership and Organization
• Ryan Olliver and Ben Watts were the key players on the company with Mike Degena act as landlord and became the third person on the partnership • Currently Adamac employed 8 people
– Olliver and Watts, Jennifer (Olliver’s wife), with one programmer and four machine operators
4
Success Factors
• Adamac was well known of their exceptional customer service and high‐quality work • The company compete on service and charged “premium price with premium product” • Major clients is manufacturing industry but also can be agriculture, finance, and sales
5
Current Issues
• The company had 70 clients and reached its maximum capacity
– They were experienced with machine malfunctions of 8 days – No profit on laser cutter sales and had to be outsourced from to other company that very expensive
6
Expansion Alternatives
Alternatives Buy neither (no expansion) Buy a laser jet cutter only Buy a laser jet cutter and a water jet cutter Option 3 plus buy out Degena (shares and land) Conditions No loans and workers are required Loans and additional workers required Loans and additional workers required Loans and additional workers required
7
Investment and Loan Information
• Investing and loan information provided to Adamac by the bank
Purchase jet cutter Laser cutter (used) Water cutter (used) Loan Loan period Loan period DP Monthly principal payment Monthly interest Additional land
An Analysis of Production and Cost Theory
Group III
Osvald Ronald David Tjahjo
Agenda
• • • • Company’s Overview Current Issues Case Analysis Recommendation
2
Overview of Adamac Inc.
• Provide services of jet cutting (laser, water jet, wire) built by Ryan Olliver and Ben Watts, previously worked for Perts • Adamac was built with an objective to provide more efficient and higher customer service • Adamac had started with used water jet, used laser cut machine, and wire cutter machine
3
Partnership and Organization
• Ryan Olliver and Ben Watts were the key players on the company with Mike Degena act as landlord and became the third person on the partnership • Currently Adamac employed 8 people
– Olliver and Watts, Jennifer (Olliver’s wife), with one programmer and four machine operators
4
Success Factors
• Adamac was well known of their exceptional customer service and high‐quality work • The company compete on service and charged “premium price with premium product” • Major clients is manufacturing industry but also can be agriculture, finance, and sales
5
Current Issues
• The company had 70 clients and reached its maximum capacity
– They were experienced with machine malfunctions of 8 days – No profit on laser cutter sales and had to be outsourced from to other company that very expensive
6
Expansion Alternatives
Alternatives Buy neither (no expansion) Buy a laser jet cutter only Buy a laser jet cutter and a water jet cutter Option 3 plus buy out Degena (shares and land) Conditions No loans and workers are required Loans and additional workers required Loans and additional workers required Loans and additional workers required
7
Investment and Loan Information
• Investing and loan information provided to Adamac by the bank
Purchase jet cutter Laser cutter (used) Water cutter (used) Loan Loan period Loan period DP Monthly principal payment Monthly interest Additional land