Model Solution to Peterson Pottery
Model Solution to Petersen Pottery
BEGINNING OF ASSIGNMENT A REQUIREMENTS
Petersen Pottery is a manufacturer of ceramic toilets located in the United States which has been in operation since 1960. The demand for its products is increasing and the bank has required evidence of cost control before advancing the money needed for further expansion. Mr Petersen has attempted to employ standards and budgets unsuccessfully.
Production Methodology:
For the production process, please see Appendix A. As you can see from Appendix A, the major raw materials are clay and glaze. Potters are used for the majority of direct labour and the products are fired in kilns or ovens.
Industry background:
Macroeconomic analysis:
The construction of housing have increased dramatically during the period from 1972 to the present as you can see in Appendix B . Since each housing unit has to contain at least one bathroom, the growth in housing units means a growing demand for toilet fixtures.
As you can see in Appendix C – there has been continuing growth in both the GDP and in personal expenditures showing that the economy is strengthening and more people will be able to buy housing units. This also supports the growth in demand for toilet fixtures. Although there was a small recession during the late 1980’s and early 1990’s, since then demand for housing has increased at a average of 3.3% every year ( SHOULD REFERENCE TO SOURCE). There have been few technology innovations in this business.
Microeconomic analysis:
Petersen Pottery currently has 70 competitors however this segment has grown to approximately 1,700 manufacturers in the United States and 1300 in China. There is much competition in this industry ( Quote reference and name some suppliers) and therefore downward pressure on price. Clay is a cheap commodity with many suppliers ( reference and name).
BEGINNING OF ASSIGNMENT B REQUIREMENTS
Problem:
Mr. Petersen must show he can effectively control and
BEGINNING OF ASSIGNMENT A REQUIREMENTS
Petersen Pottery is a manufacturer of ceramic toilets located in the United States which has been in operation since 1960. The demand for its products is increasing and the bank has required evidence of cost control before advancing the money needed for further expansion. Mr Petersen has attempted to employ standards and budgets unsuccessfully.
Production Methodology:
For the production process, please see Appendix A. As you can see from Appendix A, the major raw materials are clay and glaze. Potters are used for the majority of direct labour and the products are fired in kilns or ovens.
Industry background:
Macroeconomic analysis:
The construction of housing have increased dramatically during the period from 1972 to the present as you can see in Appendix B . Since each housing unit has to contain at least one bathroom, the growth in housing units means a growing demand for toilet fixtures.
As you can see in Appendix C – there has been continuing growth in both the GDP and in personal expenditures showing that the economy is strengthening and more people will be able to buy housing units. This also supports the growth in demand for toilet fixtures. Although there was a small recession during the late 1980’s and early 1990’s, since then demand for housing has increased at a average of 3.3% every year ( SHOULD REFERENCE TO SOURCE). There have been few technology innovations in this business.
Microeconomic analysis:
Petersen Pottery currently has 70 competitors however this segment has grown to approximately 1,700 manufacturers in the United States and 1300 in China. There is much competition in this industry ( Quote reference and name some suppliers) and therefore downward pressure on price. Clay is a cheap commodity with many suppliers ( reference and name).
BEGINNING OF ASSIGNMENT B REQUIREMENTS
Problem:
Mr. Petersen must show he can effectively control and