Question 1 :

What objectives should be adopted in manufacturing with respect to :

a) Cost

1) Low-cost operation – reducing cost to generate desired profit

“The business unit is growth-oriented with substantial resources directed to new-product/new-market strategies, making it a medium- to high-risk operation. Although investment in product development and capital equipment will be required, the business should retain its low-capital, high-labor-intensive character”.

Cost reduction strategy

• Cost reduction by design

• Lean production cost reduction

• Overhead cost reduction

• Standardization cost reduction

• Supply chain management cost reduction

b) Delivery

1) Delivery speed – reduce the delivery time

A new automatic system of delivery control and inventory control is suggested to replace the current manual system

“The system appears to work quite well for the present situation, but constant expediting and stock chasing are necessary to keep production moving”.

“Inventory stock status is computerized by the data processing department. Receipts and disbursements are sent to data processing and then entered into the computer”.

“The first priority, after the new computer is installed, will be the conversion of existing accounting and financial systems”.

2) On-time delivery – marketing strategy to attract new customer

“The ADP will restrict its market development resources to certain markets segments or niches of growth and to mature industries where there is a realistic opportunity and expectation of occupying a dominant or strong competitive position. This heavy emphasis on marketing strategies will require enlargement of market research, market development, and sales