...Case Summary Foreign competition and the oil crisis experienced in the 1970s has caused cutbacks in the automotive parts and manufacturing industry and pressure to meet stricter emissions standards. Maintaining costs and profit margins has become more difficult amid a climate of outsourcing and discontinuations. #2 Overhead Rate The difference in overhead allocation has occurred due to the outsourcing of muffler/exhausts and oil pans. Since there are fewer products to absorb fixed costs the overhead allocation rate increases rather dramatically. 1988 1989 1990 [Total OH/DL] x 100 109,890/25,294 78157/13537 79393/14102 Rate 434% 577% 563% #3 Gross Margin % Product 1 1988 1989 Price $ 62.00 $ 62.00 Material Cost $ 16.00 $ 16.00 Labor Cost $ 6.00 $ 6.00 Overhead Cost $ 26.04 $ 34.62 Profit $ 13.96 $ 5.38 Gross Margin 23% 9% Product 2 Price $ 54.00 $ 54.00 Material Cost $ 27.00 $ 27.00 Labor Cost $ 3.00 $ 3.00 Overhead Cost $ 13.02 $ 17.31 Profit $ 10.98 $ 6.69 Gross Margin 20% 12% #4 Appropriate Nature of Costs Machine hours may be a better allocation base as the plants are highly mechanized. #5 Manifolds Projection % of Total with Manifolds w/o Manifolds 1987 1988 1989 1990 1991 1991 Sales Fuel Tanks $ 70,278 21% $ 75,196 $ 79,816 $ 83,535 $ 87,223 $ 87,223 Manifolds $ 79,459...
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...Bridgeton Industries: Automotive Component & Fabrication Plant (ACF) Description The ACF was a major supplier of components for the domestic automotive industry as all of its production was sold to the Big-Three domestic automotive manufacturers. The ACF gone through different industrial uses until the founder of Bridgeton purchased it and it became the original plant site for Bridgeton Industries in the early 1900s. The ACF faced the competition from local suppliers and other Bridgeton plants. As market demand and supply are changing all the time; throughout the 1980s, the ACF experienced severe cut down due to the loss of domestic market share and competitive pressure. Problems and Issues The problem of the ACF is that even the sales were increased, the profit still falling down after several strategic steps are taken. In 1985, one of the engine plants shut down and other operations of the ACF are hanging by thread. In the 1987 model year, the overhead rate was 435% of direct labour dollar cost. There are several cost issues that hide in above status quo. The issues that cause this problem are presented as following. The plants were planned and built to manufacture of fuel-efficient diesel engines that were consistent with a continued growth demand in the market. However, in 1985, the oil crunch and not sustained demand for diesel-powered car threatened the development of the plants. This was an incorrect anticipant decision. Furthermore, special studies stated...
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...As we can see, on the calculations; the company has chosen labour hours for the allocation base. But when we do the calculations with the machine hours with the allocation base, we face with a huge difference and moreover see a lower total cost, which make high the profit. Making profit higher will be a good thing, so the company should choose the machine hours for their allocation base and calculations. In addition; because of the technology improvement and automation; machinery will be more usable and effective. Moreover, because the machines will be heterogenous, we will then need different number of labor for each. Some of them is highly-automated whereas some of them is low-automated. So, again we understand that machine hours will be a better allocation base then labour hours. Labour hours Machine hours Standard products (high volume) 2500 3500 Specialised products (low volume) 1500 3000 Total 4000 6500 Difference Budgeted labour rate 42,5 279500/6500=43 -0,5 Budgeted overhead burden 149,825 599300/6500=92,2 57,625 Total Cost 192,325 135,2 57,125 2) As known, the most commonly used allocation base in traditional costing is direct labor hours. We can also see this in the case. But at this point, we may face with some problems such that in this process overhead is increasing while direct labor is decreasing. There is an 1800$ increase whereas 46% increase in the overheads dramatically. Moreover, we see a variance and complexity in the production process...
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...TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory Join Search Browse Saved Papers Home Page » Business and Management Steel Industries of Bangladesh In: Business and Management Steel Industries of Bangladesh STEEL INDUSTRIES OF BANGLADESH REPORT ON FOCUS The report “Bangladesh on its way of becoming self sufficient in rod production, export is also a possibility” by Shuvankar karmakar, that was analyzed here, was published in the Daily Prothom Alo, on 17th November, 2012. BACKGROUND Bangladesh Steel industry is emerging as one of the major industrial sectors of the country. It consists of small up to the largest scale of steel melting and re-rolling factories across the country that mostly produce deformed bar rod of different grade (40, 60, 500), angel, channel and coil for the construction industry. Though the history of Steel Industry is not older one but it can make a glorious future. Before 1971 Bangladesh did not have any steel mill and even after the liberation there were only a few steel factories in the country. In 1990s the actual development began in this sector through a revolution. During that period the building constructing agencies or developer companies came forward to build modern infrastructure. Then with the increasing demand, new investors started investing in steel or rod production. In 2012 we have almost 400 mills across the country including Dhaka, Chittagong...
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...Factor conditions are human resources, physical resources, knowledge resources, capital resources and infrastructure. Specialized resources are often specific for an industry and important for its competitiveness. Specific resources can be created to compensate for factor disadvantages. Demand conditions in the home market can help companies create a competitive advantage, when sophisticated home market buyers pressure firms to innovate faster and to create more advanced products than those of competitors. Related and supporting industries can produce inputs which are important for innovation and internationalization. These industries provide cost-effective inputs, but they also participate in the upgrading process, thus stimulating other companies in the chain to innovate.[2] Firm strategy, structure and rivalry constitute the fourth determinant of competitiveness. The way in which companies are created, set goals and are managed is important for success. But the presence of intense rivalry in the home base is also important; it creates pressure to innovate in order to upgrade competitiveness. Government can influence each of the above four determinants of competitiveness. Clearly government can influence the supply conditions of key production factors, demand conditions in the home market, and competition between firms. Government interventions can occur at local, regional, national or supranational level. Chance events are occurrences that are outside of control of a firm....
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...Metcalf & Associates Significantly Impacts Worthington Industries Bottom Line by Facilitating Successful ERP Transition by Maureen Metcalf Company Profile ‘One of the Most Admired Companies’ in its industry per Fortune magazine, Worthington Industries, founded in 1955, grew from humble beginnings to a multi-billion dollar metal processing company. Today, the firm employs 8,000 people in 67 facilities throughout 11 countries. The company’s success is credited to its customer-centered philosophy, based on the Golden Rule. This philosophy, in addition to an unwavering commitment to the customer, and one of the strongest employee/employer partnerships in American industry serve as the company’s foundation. Challenge and Vision With the continuing growth and diversification of Worthington Industries, inventories naturally grew as well. As with many manufacturing firms, inventory has a significant impact on revenue and cash flow. Maintaining inventories larger than necessary negatively impacts the bottom line. Thus, the firm wanted to gain better insight into their inventories and processes and increase their supply chain informationto a higher level of detail. The company had a vision of further improving the level of customer service, while using less working capital and inventory. In order to achieve this goal, every process that impacted supply chain management and inventory needed to be closely evaluated. Surfacing every issue that could be preventing the firm from providing...
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...agenda that includes promoting the company brand. ("What Is Strategic Communications?”, 2011) Case Study: “The Power of Rewards at Industry International” The case study “The Power of Rewards at Industry International” located in chapter three of Strategic Organizational Communication in a Global Economy describes a manufacturing company. The company has a rewards system used to compensate employees but that system is in jeopardy of being eliminated due to economic challenges. The case study describes the situation, the challenges the employees and the company face, and the methods the employees are considering to resolve the issue to their satisfaction. The Organizational Structure The organizational structure of the flow of information with a company can be either centralized or decentralized. Centralized information flow means all decision making and power is reserved to central points within the company. ("Centralization And Decentralization", 2013) In a centralized company information is often altered by the time it reaches the lower ranking employees. Decentralizing the information flow is the exact opposite of centralized. In a company that is decentralized information flow is distributed equally through the company resulting in faster decision making and less alterations. The organizational structure of Industry International. Industry International is a decentralized company. Although decisions are made by a board of directors and information is not shared with...
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...Executive Summary Mr. Li has an opportunity with Unicon to direct it in a new, and focused direction. With its competitive advantage it has established with the Hong Kong Housing Authority (HKHA). I recommend pursuing the blanket approval process with HKHA. These efficiencies could prove beneficial for both parties as this will greatly reduce lead time and costs. Façade and slabs are the growing trends in the industry and will allow Unicon to take advantage of the cost savings that come with it. * No longer a need for engineered documents, saving on time and engineering costs. * Job security * Operational efficiencies * Holding inventory * Reduced lead times * Product standardization The tradeoffs that are implied with this move is worth the risk of this approval process. There is potential for savings upwards to HK150,000 per block. An approximate saving of over 1 million based upon the 179 blocks per year projection from the HKHA. Once this approval is agreed upon and the contracts awarded. I recommend a detail review of Unicon current product lines and completely outsourcing the stair production line. After a 6th month time, I recommend we review our production efficiencies and look into expanding our production facility as our three remaining products are now made-to-stock. Issue Identification Concrete Construction Market: • Precast Concrete Products sold to General Contractors in Hong Kong • 2 Options for building, Traditional Method...
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...Airbus vs. Boeing Airbus and Boeing both compete in the highly competitive industry of manufacturing commercial aircraft. Over the years they have each controlled the market at differing times due to competitive advantages – an ability to create value through a company’s strategies and operations that its competitors cannot (ref – Strategic Management textbook , pg 22) Boeing, formed in 1916 by William Boeing and George Westervelt, dominated the industry until the 1970’s, when Airbus was organized through a collaboration between Britain, France and West Germany. Airbus began manufacturing the A-300 series which enabled them to capture 10% of the market share by 1975 (ref article), no small feat considering they were competing against the giant Boeing. Airbus’s ability to compete with Boeing and gain market share will be analyzed using the following business models: PESTEL Analysis, SWOT Analysis, Porter’s Five Forces, VRINE Analysis and Porter’s Model of Competitive Advantage. PESTEL ANALYSIS Political – Airbus was a product of a merger between three European countries; Britain, France and West Germany. In the 1970’s the political climates of all three were relatively stable. The three countries worked together in order to compete with the US. They did have to adhere to international trading policies and agreements (NAFTA, GATT). Economic – As they were competing largely in the US market, Airbus needed to constantly...
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...CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND TO THE STUDY The ultimate aim of most developing countries in general is to industrialize. The reason for this are obvious. First, there is relationship between the degree of industrialization and the level of development. Secondly, the developed countries of the world are basically industrial countries. The higher the level of industrialization the higher the level of national income, standard of living and economic development. Prior to the discovery of crude oil in commercial quantum in Nigeria, agricultural primary produce has been the major sources through which Nigeria generate foreign exchange. Therefore, Nigeria constituted one major agrarian country in Africa. However, at the attainment of independence in 1960, the various governments took interest in industrialization. This can be noticed through series of development plan adopted by the succeeding government in Nigeria over the years. Though without keen interest, except till the nineteen – seventies. The need arose to adopt an import substitution industrialization policy to reduce the heavy dependence on the external sector for the supply of manufactured products, capital goods and equipment. Nigeria government in a bid to industrialize created some industrial incentive policy to encourage foreign investors to invest in Nigeria industrial sector. That is, foreign entrepreneurs were technically and strategically invite to champion Nigeria industrialization because of the...
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...Overview of real estate industry The real estate industry is one of the fastest growing industries in our economy, with a Compound Annual Growth Rate of approximately 30%..A US$ 16 billion industry at present, it is expected to touch US$ 60 billion in the next five years. The sustainability of growth in the real estate industry has its roots in strong demand fundamentals: a. Rapid expansion of the IT/ ITES and business outsourcing industry b. Rising demand in the residential sector, encouraged by rapidly increasing income levels; c. Acceptance of shopping malls as “one stop destinations” for consumers; and d. Growing popularity of Special Economics Zones as preferred destinations for both manufacturing and service industries. Ansal api Ansal Properties and Infrastructure Limited (APIL), promoted by the Delhi based Ansal Group, is one of the prominent real estate developers in Northern India. The Group, headed by brothers Sushil and Deepak Ansal, is engaged in developing integrated townships, IT cities and commercial and residential complexes. Ansal Group has been a major player in the real state sector in the country since 1967. It is now regarded as one of the top most real state group in the country. Sobha Developers Ltd. (SDL) formerly Sobha Developers Private Limited It is an Indian multinational real estate developer headquartered in Bangalore, India and engaged in the business of construction, development, sale, management and operation of all or any...
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...Introduction The development of small and medium enterprises (SMEs) in developing countries is generally believed to be a desirable end in view of their perceived contribution to decentralized job creation and generation of output. SMEs constitute the dominant source of industrial employment in Bangladesh (80%), and about 90% of the industrial units fall into this category. The actual performance of SMEs, however, varies depending on the relative economic efficiency, the macro-economic policy environment and the specific promotion policies pursued for their benefit. For the JOBS Program, Zaid Bakht (1998) and Salahuddin Ahmad, et al. (1998) developed research papers that describe the policy environment within which SMEs in Bangladesh operate. The reports also discuss the accompanying legal, regulatory and administrative constraints to employment creation by SMEs. This paper attempts to highlight the findings of those two studies. To complement the issues discussed in those two papers, a summary of industrial problems, as perceived by entrepreneurs during the past one decade (HIID, 1988; MCCI 1992; World Bank 1994; JOBS 1998), is also presented in this report. In Bangladesh, SMEs playing a significant role for the development of our economy by creating employment opportunity and producing important alternative machines and machinery parts for saving huge foreign currency for our country. So as a part of our development strategy, we should intensify our efforts to...
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...Riordan Manufacturing Team A University of Phoenix Strategic Management MGT\498 William Etherton July 17, 2013 Riordan Manufacturing Riordan Manufacturing is a worldwide plastics manufacturer employing 550 persons with projected yearly earnings of $46 million. The company is entirely owned by Riordan Manufacturing Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Riordan is well established locally and nation-wide, although they are based out of San Jose Riordan has a manufacturing plants in China, Georgia and Michigan. Every company no matter how well it is doing professionally as well as financially always has room to grow and better themselves. Riordan has thought of different ways to remain competitive in an ever-dynamic environment, Riordan Manufacturing must stay current with the latest technology, recent developments in the industry, and attend to the needs of its customers. After telecommunications and data networking systems require an upgrade to a better support of the company’s recent and future growth needs, long-term relationships will be required by maintaining rigorous quality controls, innovative solutions, reasonable pricing, and a responsive business attitude. (B, 2009) Riordan Manufacturing will strive to be a solution provider for their customers and not be a part of theirs customer’s challenges. Future is must be focused in maintaining and achieving reasonable profitability to assure that the human capital and financial...
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...Riordan obtained venture capital to expand the company. The corporate headquarters is located in San Jose, California with additional manufacturing plants in Georgia, Michigan, and China. Products include plastic beverage containers, custom plastic parts, and plastic fan parts. The company is a leader in the industry of plastic injection molding. (Virtual Organization Portal, 2012) Riordan Manufacturing wants to expand operations and they have three options when considering expansion. The three options are going public via IPO, acquiring another organization in the same industry, or merging with another organization. The company must consider the strengths, weaknesses, opportunities, and threats of each option before making a final decision on how to expand. Additionally, considerations on the financial effects of globalization, exchange rate risks, and mitigating the exchange rate risks should be analyzed if the company decides to go international. Strengths Riordan manufacturing is looking for ways to expand their business. They narrowed it down to three options which are going public through an IPO, acquisition of another organization in the same industry, or merging with another organization. Riordan executives are taking in consideration the strengths of each option. If Riordan chose to go public through an IPO they will be able to generate revenue that can be used to fund growth plans. In addition, this will create liquidity for owners and potential investors...
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...further processing. Due to their small size in comparison to many of their competitors in the industry, FHPC would be classified as a niche company as stated in the case. Part of FHPCs strategy, which will be looked at further below, is to create a niche based on service and rapid customer response that the larger manufacturing companies are too large to be able to do successfully. Competitive Environment The environment in which Forest Hill Paper Company operates in is a cyclical environment with upswings every three to four years. Due to the cyclical nature of the industry, customers try to anticipate times when they would not be able to get paper by ordering large quantities of paper at certain times and none at others. Because of this, FHPC has times when they are flushed with orders and cannot meet them with their production capabilities, and times when they are not running at optimal levels due to lack of demand. Along with this issue, the market share for domestic paperboard has been steadily declining. The most significant reason there is a decline in market share is the moving trend toward plastic and more environmentally friendly forms of paperboard. In general throughout the industry, companies have made little effort to expand capacities of the production facilities. At times the demand greatly exceeds the capacity of any one production plant. In boom times the industry as a whole experiences great increases in selling price for the paperboard products for most...
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