Albatross Anchor Unit 3 - 1
Unit Three Written Assignment
Unknown!
MT435 Operations Management
Kaplan University
June 13, 2013
This case study references a business called Albatross Anchors. Albatross is a small, family business that manufactures two different types of anchors. Albatross Anchors case study is about a few challenges that are being called out into the open in hopes to fix. While some problems may be minor at best, other 's could lead to major profit loss. Most of these problems are due to the "shabby and disorganied administrative office" and because it 's an "antiquated, worn, and technology deprived plant", as stated. If these problems are dealt with immediately, there 's no telling how much the company will stand to lose.
(1) Production - To completely understand the cost of production, you need to understand that the costs vary by what type of anchor you 're making, how much raw material it would take to make an anchor, how many anchors you are making and the amount of labor that is put into it; also known as the variable cost. The variable cost "depends on what materials and labor are needed for the company” (Russel & Taylor, 2011). You also need to understand which costs can make the company gain a profit or, unfortunately, lose profit. Albatross Anchors has their own shipping, receiving, administrative, manufacturing, raw materials and product departments all on site, which helps keep the fixed cost, the costs that do not cary with output, down. In this case, Albatross Anchors manufactures two different types of anchors; the mushroom/bell anchor and the snag hook anchor. In terms of cost of production, the raw materials needed to build the mushroom/bell anchor costs $8 per pound, while the cost of the raw material for the snag hook anchor is $11 per pound. Though they charge the same per unit as their competitors, and even with the cut expenses from manufacturing everything themselves, they still may face a loss in
Unknown!
MT435 Operations Management
Kaplan University
June 13, 2013
This case study references a business called Albatross Anchors. Albatross is a small, family business that manufactures two different types of anchors. Albatross Anchors case study is about a few challenges that are being called out into the open in hopes to fix. While some problems may be minor at best, other 's could lead to major profit loss. Most of these problems are due to the "shabby and disorganied administrative office" and because it 's an "antiquated, worn, and technology deprived plant", as stated. If these problems are dealt with immediately, there 's no telling how much the company will stand to lose.
(1) Production - To completely understand the cost of production, you need to understand that the costs vary by what type of anchor you 're making, how much raw material it would take to make an anchor, how many anchors you are making and the amount of labor that is put into it; also known as the variable cost. The variable cost "depends on what materials and labor are needed for the company” (Russel & Taylor, 2011). You also need to understand which costs can make the company gain a profit or, unfortunately, lose profit. Albatross Anchors has their own shipping, receiving, administrative, manufacturing, raw materials and product departments all on site, which helps keep the fixed cost, the costs that do not cary with output, down. In this case, Albatross Anchors manufactures two different types of anchors; the mushroom/bell anchor and the snag hook anchor. In terms of cost of production, the raw materials needed to build the mushroom/bell anchor costs $8 per pound, while the cost of the raw material for the snag hook anchor is $11 per pound. Though they charge the same per unit as their competitors, and even with the cut expenses from manufacturing everything themselves, they still may face a loss in
References: www.economicsonline.co.uk. Cost of Production www.investopedia.com. Economies of Scale (2011) Manufacturing Process Improvement. http://article-library.industrial1000.com/manufacturing_process/20110922-083542-Manufacturing-Process-Improvement-Eliminating-waste-in-waiting Focused Factory. http://www.strategosinc.com/focused_factory.htm