Owning and operating a small business that needs to expand to keep up with competition can be very hard and overwhelming. Albatross Anchor needs some major renovations done to their business including adding on to the existing building or even building a second building for finished products and storing of the raw materials. Yet it faces the fact that funds may not be available to do all of this. It is now time to make some decisions on how to accommodate the needs of their customers in the most economical and efficient way for them to continue to stay open and succeed beyond the competition.
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: Cost $8.00/lb for mushroom bells Cost 11.00/lb for snag hooks b) Economies of Scale in material purchasing: c) Cost of Raw Materials Sitting Idle in the Warehouse: d) Cost of Finished Goods Sitting Idle in the Warehouse:
2. Speed of manufacturing process from order to finished product.
Due to limited space, the manufacturing process is slow. There is a 36 hour delay when switching from making one anchor to another. There is not room to make both at the same time.
3. Flexibility in filling order(s)
4. Technology Albatross Anchors was established way before the new technology was available. Several upgrades in technology that would help Albatross accommodate orders has not been allowed due to other expenses that has taken priority. But over the years Albatross has been working on making changes one step at a time to make their company be able to compete against the competitor and do the same amount of work and keep the lower production costs so that their customers will continue to use them.
5. Capacity