Albatross Anchor's

Topics: Costs, Manufacturing, Variable cost Pages: 2 (280 words) Published: June 26, 2011
Unit three Written Assignment

Ashley Kauffman

MT435 Operations Management

Kaplan University

June 23, 2011


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:
b) Economies of Scale in material purchasing:
c) Cost of Raw Materials Sitting Idle in the Warehouse:
d) Cost of Finished Goods Sitting Idle in the Warehouse:
2. Speed of manufacturing process from order to finished product. 3. Flexibility in filling order(s)
4. Technology
5. Capacity and facilities
6. Service to customers
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. Analysis of the information below will help determine which process has the lowest breakeven point (this validates the process is more cost effective). 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 information in the table above complete the table below:

|Anchor and Process |Process A |Process B | |(a) Fixed costs per anchor...

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