Great Northern Bank Beds, Inc.
Operations Management
Great Northern Bunk Beds, Inc.
Introduction
Deciding whether to invest or not is a complicated task for today’s companies. Managers need to make thorough studies, analysing additional costs and revenues, in order to be able to make the most reasonable decision. A big investment implies a great expenditure and, generally, a late return. If a company does not consider thoroughly the requirements and the outcomes of a particular investment, the organization may suffer a big loss and even be severely prejudiced.
Matt Dorman, manager of Great Northern Bunk Beds, Inc, a high-quality custom-made beds manufacturing company, is considering a new big investment. Currently, Dorman only has a small size factory of 700 square feet located in Beltsville which unable the company to install additional equipment and to perform more than one step at a time. The production capacity is, therefore, limited, and that is the reason why Dorman believes that expanding GNBB to Jessup is an excellent opportunity. Jessup has some advantages when compared with Beltsville such as a lower rent and more usable space. These characteristics will allow the purchase of new equipment and, consequently, a decrease in operating and setup times besides the possibility of multi-tasking.
The report will show the group’s analysis of the manufacturing process, namely, total time per step, per batch and per minutes and the total units produced per week. We will compare the results of Beltsville with Jessup’s, specifically the capacity of production, the flow rate, the sales and the costs. Finally, we will use the payback method that gives us the length of time required to recover the cost of the investment to determine whether GNBB should engage in it or not. An extended payback time probably make us Matt Dorman not to invest, contrary to a short payback time which would attract him to invest.
In the end of the report, we attached 3 tables which were created to
Great Northern Bunk Beds, Inc.
Introduction
Deciding whether to invest or not is a complicated task for today’s companies. Managers need to make thorough studies, analysing additional costs and revenues, in order to be able to make the most reasonable decision. A big investment implies a great expenditure and, generally, a late return. If a company does not consider thoroughly the requirements and the outcomes of a particular investment, the organization may suffer a big loss and even be severely prejudiced.
Matt Dorman, manager of Great Northern Bunk Beds, Inc, a high-quality custom-made beds manufacturing company, is considering a new big investment. Currently, Dorman only has a small size factory of 700 square feet located in Beltsville which unable the company to install additional equipment and to perform more than one step at a time. The production capacity is, therefore, limited, and that is the reason why Dorman believes that expanding GNBB to Jessup is an excellent opportunity. Jessup has some advantages when compared with Beltsville such as a lower rent and more usable space. These characteristics will allow the purchase of new equipment and, consequently, a decrease in operating and setup times besides the possibility of multi-tasking.
The report will show the group’s analysis of the manufacturing process, namely, total time per step, per batch and per minutes and the total units produced per week. We will compare the results of Beltsville with Jessup’s, specifically the capacity of production, the flow rate, the sales and the costs. Finally, we will use the payback method that gives us the length of time required to recover the cost of the investment to determine whether GNBB should engage in it or not. An extended payback time probably make us Matt Dorman not to invest, contrary to a short payback time which would attract him to invest.
In the end of the report, we attached 3 tables which were created to