Running Head: PARKER EARTH MOVING COMPANY RECOMMENDATION

Parker Earth Moving Company Recommendation
Amanda Duarte
ISCOM 305
August 18, 2011
R. Sell

Parker Earth Moving Company (PEMC) is in the business of providing high-quality small earthmoving equipment for home and small business consumers. In an effort to grow its business, PEMC has developed a new navigational device called the Ultramover. The Ultramover was designed for personal and small business use and is intended to sell for $129.95 per unit. The Marketing and Sales Department has forecasted the first quarter sales to be 30,000 units. However, it was recently discovered that forecasted estimate was incorrect. Through thorough analysis it has been determined that the actual demand target for the Ultramover is expected to be 30,000 units per month, and 90,000 units per quarter. As a result of this new information, PEMC has hired this consulting firm to provide solutions that will enable PEMC to meet its production needs. The purpose of this paper is to provide those recommendations for improved productivity (University of Phoenix, 2011).
Determining the Needs of the Customer In order for us to determine the needs of PEMC we must first have a clear vision of the company’s analysis data for the Ultramover. Through this review of the data, we have determined that PEMS currently only has the capability to produce ten thousand units of the Ultramover each month by operating two production shifts five days a week. Given the challenge of increasing the output of until from 10,000 to 30,000, we have determined three specific areas in which PEMS must correct in order to meet its production demands (University of Phoenix, 2011).
Needs of the Customer One of the key duties of this consulting firm is to determine the needs of the customer in order to make recommendations. We have determined that there are three specific needs for PEMC that must first be addressed. The first to be addressed is the limited space that PEMC has available for production, and storage of its inventory. The second need is the amount of staff that is needed to meet production needs. The final need is the required period of time for training new employees needed for production of the Ultra mover equipment (University of Phoenix, 2011).
Recommendations
In addition to adding a third shift and working all production shift six day per week, and the rental of an offsite facility to increase production, it is also recommended that PEMC consider subcontracting a portion of their production to one of two small manufacturing companies. Subcontractor A will require 45 day lead time and increase the total costs of productions to $82 per unit. Subcontractor B will require a 35 day lead time and will increase the total costs of production to $88 per unit. It is the recommendation of this company that the CEO of PEMC, agree to hire Subcontractor A to help meet their demand target for the Ultra mover. This recommendation is being made for two specific reasons, first, the necessary lead time that is required by Subcontractor A is the same to PEMC requires, and the increase to the production cost are less than what is being offered by Subcontractor B (University of Phoenix, 2011).

References:
University of Phoenix. (2011). Parker Earth Moving Company Consulting: Customer needs and operational performance. Retrieved from University of Phoenix, iscom/305 website.