Aero Gear

The first thing Aero Gear needs to know when preparing or accepting bids is the cost. Based on this information they can determine profitability which is a key factor in deciding whether to prepare or accept a bid. In order to find a product’s profitability Aero Gear could look at old jobs to compare. When dealing with new customers they could compare the jobs to similar jobs or they could use estimates. When comparing jobs for new customers Aero Gear run into a problem because of the large amount of custom jobs that they deal with. When assessing the impact of decision on profit and profitability it is important to focus on the whole value stream as opposed to the individual product.

If a company is unhappy with the profitability of a product they might decide to outsource it from a local supplier. By performing an analysis of the product Aero Gear could determine whether there would be a financial benefit from outsourcing. Although, Aero Gear needs to keep in mind that a business decision has a number of issues, including some that are non-financial that need to be taken into account before deciding whether to make or buy the product.

We do not believe that it is fair to punish a flow line in the situation where a customer asks for a quicker deadline and other jobs are delayed, throwing the whole flow line off of their target dates. This is not due to a worker being inefficient or production not being organized in the correct manner; therefore the flow line should not have to pick up the slack. Aero Gear is going to be more likely to try and speed up production for a valued customer than a small customer who doesn’t bring in much business. When a customer needs a job sooner than originally planned other jobs get pushed to the “back burner” and delayed. In the case of a larger customer this is more acceptable because Aero Gear wants to keep them happy. If they were to do this for a small customer then they could potentially be putting off more important...