Giberson Glass Studio

Topics: Hour, Cash flow, Time Pages: 5 (956 words) Published: April 4, 2009
Course Title:Financial Management

Assignment:Mid Semester Exam

Giberson’s Glass Studio


Table of Contents

Executive Summary3

Production Schedule4

Product Mix5

Product Mix and Schedule6

Cash Flow7

Budgeting and Finance7

Income Statement7

Balance Sheet7

Executive Summary

Giberson’s Glass Studio was founded to produce exquisite hand made glass by Edward Giberson in 2002 and

The main problems facing the company are the production schedule and usage of the principle skill set, namely Mr. Giberson. While the business currently operates at a profit, it is not able to provide the $25,000 minimum in wages that is needed.

By changing the production schedule, product mix and using more casual labour, the business can become much more profitable and provide a buffer to allow a day away from the studio.

This would also allow the Furnace and Ovens to be shut off for 1 day a week creating a reduction in gas expense and increasing the life expectancy of these critical facilities.

Another important concern is the condition of the Furnace and Ovens which are only expected to last another 6 months. At the end of this time we need to have budgeted enough to replace them. You will see in the cash flow table, I have shown how you can do this.

Production Schedule

The current production schedule (figure 1) creates 30 hours of blowing time per week with no allowance for the proprietor to have a break. This may not be necessary as you love your time in the studio, but it is prudent to build in a buffer should you wish to take time for yourself.

The main focus of this schedule is to use your skills where they make the most profit and to use cheaper, casual labour where possible. This could include lighting the glory hole, warming the ovens, cold production time and shipping .

|Sunday |Monday |Tuesday |Wednesday |Thursday |Friday |Saturday | |Melting |Fining |2 hr Glory |2 hr Glory |2 hr Glory |2 hr Glory |2 hr Glory | | | |6 hr blowing |6 hr blowing |6 hr blowing |6 hr blowing |6 hr blowing |

Table 1 - Current Weekly Production Schedule

Total blowing time = 30 hours

I would recommend that you get a casual who can turn the ovens on in the morning before you arrive. This will allow you to spend more time blowing and producing more product. As you will see below, it is possible to achieve the same production time in 4 days blowing allowing you to turn off the ovens for 1 day a week.

Turning the ovens off for 1 day a week will save approximately $140 per month in gas and increase their life expectancy from 2 years to 2.3 years. Over the life of the Ovens and Furnaces that is a saving of $3,600.

|Sunday |Monday |Tuesday |Wednesday |Thursday |Friday |Saturday | |OFF |Melting |Fining |8 hr blowing |8 hr blowing |8 hr blowing |8 hr blowing |

Table 2 - Proposed Weekly Production Schedule

Total blowing time = 32 hours

Based on my observations, you currently spend 20% of your time doing cold work. Putting a dollar value you on your time based on the production of vases, gives $100/hour. If you passed the cold work to a casual then without increasing production time, you would be able to spend at least another 5 hours per week producing products and with labour costs of $5/hour, this would add another $475 (5*$95) to the bottom line per week. Depending on the product mix, this would also reduce the amount of scrap at the end of the week by increasing the yield from each batch.

Based on the current production schedule, using a casual to bring the ovens up to temperature, light the glory hole and do all the cold...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Giberson Glass Studio
  • Giberson’s Glass Studio Essay
  • Essay on Giberson's Glass Studio
  • Giberson's Glass Studio Case Essay
  • studio Essay
  • Global Smart Glass Market Essay
  • glass Essay
  • Label & Studio Essay

Become a StudyMode Member

Sign Up - It's Free