Submitted by: Submitted by Stephanie84027
Views: 137
Words: 658
Pages: 3
Category: Other Topics
Date Submitted: 05/14/2014 11:30 AM
Stephanie Overfield
MT435 Unit Eight
Kaplan University
5/14/2014
Introduction
Albatross Anchor has been manufacturing anchors since 1976. They manufacture and sell mushroom/bell anchors and snag hook anchors on a wholesale level only. Their building/facilities are all together in one location and consist of: The administration offices, manufacturing, the shipping department, the receiving department, raw materials storage, finished products storage, and the foundry. The plant does not meet all US safety and environmental standards and is worn and technology-deprived. As a potential consultant for Albatross Anchor, I will be discussing how to improve Albatross Anchor’s competitiveness and help determine if a new process would be better and more efficient for the company.
Question one
Challenge one: Cost Management
Albatross Anchor can better keep their manufacturing costs down by having the plant all in one location, but it has also created some inefficiencies. The cost for manufacturing the mushroom/bell anchor is $8.00 per pound and $11.00 per pound for snag hook anchors, which is the same costs as their competitors, but the inefficiencies sometimes create a profit margin that is up to 35% less. Therefore, Albatross Anchor is at a disadvantage compared to competitors when it comes to costs.
Albatross Anchor produces in small quantities which makes it hard to determine their economies of scale. If the company were to try and determine their economies of scale based on their materials purchased it would just result in larger amounts of finished product in storage and increase their holding costs.
Albatross Anchor has a huge competitive disadvantage because they only produce small batches of anchors at a time which creates large amounts of raw materials just sitting in the raw materials storage until it is needed. This increases their holding costs and creates inefficiencies.
Albatross Anchor has a huge competitive disadvantage because as...