Albatross Anchors Unit 3

Unit three Written Assignment

Kaneatra Parham

MT435 Operations Management

Kaplan University

November 26, 2013

Introduction

My name is Kaneatra Parham and I am an expert in the field of operations and I am also a representative of KU Consulting. I was sent to you with my level of expertise in Operations Management. Our goal here is to ensure superior, quality and ultimate satisfaction. Albatross Anchor is growing at a rapid pace and like most growing business, they are confronting operational challenges. I am here in support of Albatross Anchor to focus on how things operate in the company as well as utilizing my skills and potential in making task operate efficiently, effectively, and to ensure quality is well managed and maintained while achieving results in the process.

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:

Because of operational inefficiencies, the production cost is much more than it should be leading to a decreased profit margin. Albatross Anchor is charging the same price per unit as it competitors and is a 35% decrease on the profit margin due to the lack of operations and efficiencies.

b) Economies of Scale in material purchasing:

Economies of Scale occurs when it costs less per unit to produce or operate at high levels of output. I will make sure this happens by making sure fixed costs can be spread over a larger number of units, production or operating costs do not increase linearly with output levels, and quantity discounts will be available for materials purchases and operating efficiency increases as workers gain experience.

c) Cost of Raw Materials Sitting Idle in the Warehouse:

The increased amount of goods stored in the warehouse means that Albatross Anchor also...