Operations Decision

Running Head: OPERATIONS DECISION

Operations Decision

Hira Babar

Strayer University

Operations Decision

Briefly describe the details of the fictitious business that you created for this assignment.

Victaulic is headquartered in Easton, Pennsylvania, and is the world leader in plain-end, and grooved pipe-joining systems. In 1925, the company was founded in New York City to “market a radical new concept in the piping industry -- a mechanical bolted coupling that would engage into grooves and use a gasket seal,” (Victaulic, 2012). During World War I, Victaulic began to shift their focus on commercial piping applications so that the company could market its new innovative method of joining pipes. Victaulic currently employs a little over 5,000 employees worldwide.

Victaulic has recently hired a consultant to offer some advice that will help make it a decision as to whether it should shut down completely or continue operations in one of their divisions, the foundry, since technological advancements and competition have caused major changes within the company. The Victaulic foundry consists of 500 workers who make metal for fittings and couplings for the piping systems. It currently uses 100 of their workers to produce 6,000 units of output per month (working 20 days/ month). The daily wage (per worker) is $70, and the price of the firm’s output is $32. The cost of other variable inputs is $2,000 per day. The firm’s fixed cost is “high enough” so that the firm’s total costs exceed its total revenue. Also, the marginal cost of the last unit produced is $30.

Assess the current environmental scan factors. Determine the factors that will have the greatest impact on plant operations and management’s decision to continue or discontinue operations.

Environmental scan factors are the analysis and study of the PEST analysis trends and events that affect a total market or business (Minnesota Management &Budget). PEST stands for political,...