Premium Essay

Mt435

In: Business and Management

Submitted By reinasant
Words 1098
Pages 5
The Competitiveness of Albatross Anchor
Name
MT/435 Operations Management
University
Prof:
Date
Introduction The purpose of this paper is to discuss the competitiveness of Albatross Anchor in regards with the costs, speed of the manufacturing process from order to finished product, flexibility in filling orders, technology, capacity and facilities, and service to customers. Then, the paper will determine ways to reduce costs by determining the process with the lowest breakeven point.
Albatross Anchor is a company that manufactures and sells anchors by wholesale. The company founded in 1976, and it grew exponentially to reach more than 100 employees. The company’s production facility and administrative offices are in the same location. Albatross is facing several issues that stand between the company and its success upon the competitors.
Company Analysis
1. Costs According to Frank (1998), the cost of producing a unit of a good is the cost associated with production divided by the amount (number) of units produced. The cost of manufacturing for Albatross Anchor is $8 per pound for mushroom/bell anchors and $11 per pound for snag hook anchors.
The economies of scale represent the efficiency increase in production as the amount of goods manufactured rises. According to Russell and Taylor (2011) think that economies of scale “occur when it costs less per unit to produce or operate at high levels of output” (p. 259). For that reason companies needs to achieve the lower average unit cost through a higher production because fixed costs are divided by a larger number of goods. Albatross Anchor does not realize economies of scale because of its inability to manufacturer more than usual. The company is inefficient from an operational point of view because it is not able to produce at least at its capacity of manufacturing; they only manufacture small…...

Similar Documents

Premium Essay

Whiller Time

...Unit three Written Assignment KU Consulting Proposal for Albatross Anchor MT435 Operations Management Kaplan University August 27, 2012   Albatross Anchor is a family owned business that is located on a twelve acre suburb in Smalltown USA. The Albatross Anchor is encounting some business set back that is affected their business. To win this 50,000 contract the albatross anchor has to make some changes in the company here are some changes that they need to make to have a successful business and to get extra clients. First thing is Cost since Albatross anchor is a manufacturing that sells only to wholesale level. There are two ways to purchase from albatross anchors thru distributors that is the middleman that accepts bulk delivery into smaller batches and is shipped to indivial retail location. OEM is another way to purchase anchors in a large batches to be used as a component in the manufacture of boats. The current manufacturing cost is $8.00 per pound for mushroom ok anchor. The cost of production will generate revenue for the company the raw material is by rail they are 35% less than their competitors so they need to work on their operation inefficiencies to get ahead of their completions. Speed of manufacturing process from order to finished product because of the limitation of......

Words: 609 - Pages: 3

Free Essay

Mt435 Unit 6 Assignment

...Albatross Anchor Unit 6 Unit Six Written Assignment Ury Salinas MT435 Operations Management Introduction Question One Carefully review the assignment scenario/case study. From the limited information in the scenario/case study, along with your answers to the unit three written assignment, identify at least three direct and specific long-term and three direct and specific short term operations changes that Albatross Anchor must make to gain a clear and sustainable competitive advantage (provide detailed information to validate and support each recommended change) Long-Term Operational Changes (01) An improvement in technology can increase efficiency and effectiveness throughout the plant. It is obvious that technology changes at such a rapid rate, older technology can slow down or inhibit the manufacturing process, making it longer for the products to reach the consumer. A plan over the span of 3 to 5 years to update technology is realistic because it gives enough time for the updates to be made effectively. (02) The purchase of additional equipment can take away the need to share manufacturing equipment between the two different types of anchors. The new equipment should be top of the line, because this will not only fall in line with the upgrades to technology, but will be the most cost-effective. Time is what will be saved primarily, since the separate equipment will do away with the 36 hours that are needed during equipment change-overs between......

Words: 976 - Pages: 4

Premium Essay

Albatross Anchor

...Unit three Written Assignment Carrie Flood MT435 Operations Management Kaplan University October 6, 2012 Introduction 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: Albatross charges about the same price as the competitors do. However the inefficiency of their operations can sometimes reduce their profit margin by 35% which leads me to believe that it could be better for them to outsource the product (Russell & Taylor, 2011). If they were to outsource it would reduce their overhead which includes labor and materials and they wouldn’t have to incur those costs anymore therefore making them more profitable (Russell & Taylor, 2011). b) Economies of Scale in material purchasing: Albatross is able to spread their fixed costs over the number of units they produce because they produce them in large quantities and do not sell individual orders or to retail stores (Wise Geek, 2012). c) Cost of Raw Materials Sitting Idle in the Warehouse: Albatross receives all their raw material by rail. In order to keep the cost of raw materials down, Albatross has to plan the utilization of these products so that they do not sit very long (Voortman, 2004). d) Cost of Finished Goods Sitting Idle in the Warehouse: It is important for Albatross to get out product as......

Words: 864 - Pages: 4

Premium Essay

Mt435 Unit 3

...Unit three Written Assignment Denise M Salazar MT435 Operations Management Kaplan University November 29, 2012 Introduction This case study delves into Albatross Anchor; a small family owned company that produces both fresh and saltwater anchors. This company has grown over the years from 4 employees to 130; but has not shown growth in the operational side. Some of the challenges they face are lack of space and disorganization within the administration of the front office. This coupled with old, outdated technology and safety issues have hindered them in creating a larger profit margin. These issues must be addressed if Albatross Anchors is to improve in their market segment. 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 of production of the two types of anchors they manufacture are as follows: A) Freshwater Mushroom/Bell Anchors: $8.00 per pound B) Saltwater Snag Hook Anchors: $11.00 per pound As Albatross Anchors price per unit are on scale with their competitors, concerns need to be address as to the issues of profit margin being under 35% on some of their products. Outdated technologies as well as inefficient manufacturing practices need to be revised and implemented to make the manufacturing process more efficient. b) ......

Words: 1323 - Pages: 6

Premium Essay

Albatross

...Unit three Written Assignment Christine Carter MT435 Operations Management Kaplan University September 13, 2013 Introduction 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: ” In a recent paper, Glock (2010a) studied the impact of variable production rates on the build-up of inventory in a two-stage production system and showed that deviating from the ‘design production rate’ of the system may reduce the system’s total costs. This is important, as varying the production rate gives production planners flexibility in smoothing material flows and in avoiding the accumulation of inventory at bottleneck stations.” Since Albatross Anchors has such inefficiencies when it comes to not only the production of their anchors, it also has inefficiencies when it comes to the shipping. With the design layout of the receiving department also being the shipping department for international orders, this is causing a bottleneck situation which is lowering their profit margin. With the cost of manufacturing mushroom anchors at $8.00 per pound and $11.00 per pound for the snag hook anchor Albatross Anchors needs to re-evaluate their production methods and warehouse layout in order to maximize their profits. b) Economies of Scale in material purchasing: c) Cost of......

Words: 581 - Pages: 3

Premium Essay

Mt435 Operations Management Unit 6

...Unit Three Written Assignment MT435 Operations Management Kaplan University July 25, 2011 Introduction Question One Albatross Anchor started as a small family business of four people in the 70s and expanded quickly to a facility on 12 acres an employees of over 130. By 1989, the product line was expanded to include snag hook anchors suitable for saltwater marine crafts. This expansion of products allowed Albatross to compete internationally; however, the technology-deprived and out of date facility has run inefficiently for years causing loss on their bottom line. 1. Cost a) Cost of Production: Currently Albatross Anchors is experiencing a profit margin 35% less on some of the anchors produced than their competitors, even though the prices they charge are the same. Albatross has manufacturing costs set at $8.00 per pound for the mushroom/bell anchors and $11.00 per pound for the snag hook anchors they manufacture (Albatross Anchor [case study]). These losses in the profit margin have been determined to be caused by inefficiencies in the operations. b) Economies of Scale: When Albatross decided to begin manufacturing the snag hook anchor in addition to the mushroom/bell anchor in 1989, they invested in the new machinery necessary for the snag hook anchors design and manufacturing process. However, no expansion was made to the building so all machinery for both anchor types share the same plant space. Since each manufacturing...

Words: 1098 - Pages: 5

Free Essay

Quality Management

...Unit 1 Quality Manageent MT435-02 -Operations Management Professor: Jason Jackson Magida Taracena 8/2/2014 A business may manufacture goods and to meet their clients needs. It is obvious that many customers always know that some businesses make better products than others, and therefore buys accordingly to it. So, that means that the business must reflect on how the client labels the word quality. I think that quality should be meant at the requirements of the customer. From here we can take that product and service quality is highly influenced by what the client want and especially by what is willing to pay. It all depends on what their needs are, and their quality expectations. The dimensions of quality for manufactured products a consumer seem to be looking for are performance, features, reliability conformance, durability, serviceability, aesthetics, safety, and other perceptions. Performance is basically how well a product is working. Features are the additional piece added. Reliability is basically the possibility that manufactured goods will operate correctly in a projected time. Conformance is the extent to which a product meets the reestablish averages. Durability is practically how long the product will last before it has to be replaced. When it comes to serviceability they are talking about the simplicity of getting things repaired. Aesthetic is the way the product looks to end-users. Safety guarantees clients that they wont......

Words: 618 - Pages: 3

Premium Essay

Albatross Anchor

...competition, the owners of Albatross Anchor made the decision to expand the product line to include fabricated snag hook anchors. Customers Albatross Anchor is a manufacturing factory that sells only at the wholesale level. Albatross Anchors sales their products in two ways: (01) Distributors that act as the middleman. The distributor accepts bulk delivery of anchors at their large distribution centers. At the distribution center the bulk shipment of anchors is broken up into smaller batches and shipped to individual retail locations. (02) OEM customers that purchase anchors in large batches to be used as a component in the manufacture of boats. Albatross Anchor does not sell retail. They are strictly a wholesale organization. Unit 10 [MT435:Operations Management] Page 7 of 8 Products The bell anchor is manufactured primarily through a foundry process in which ore is transformed into a liquid state and then poured into molds as part of the production process. The bell anchor is used primarily by freshwater marine craft. The snag hook anchor is fabricated through the bending and welding of iron rods and flat iron into a hook design. The hook design is best when used in saltwater. This hook design snags bedrock and seaweed which holds the marine craft at anchor. The snag hook anchor is used primarily for small to medium sized saltwater marine craft. Each anchor is produced in multiple sizes to accommodate the type of watercraft, the size of the......

Words: 864 - Pages: 4

Free Essay

Quality Management

...Journal #1: Quality Management Miché Jones Kaplan University MT435: Operations Management Professor Jason Jackson January 13, 2015 Journal #1: Quality Management Quality Tools Roberta S. Russell and Bernard W. Taylor III, authors of Operations and Supply Chain Management discussed quality tools and their importance to organizations. The authors conveyed that W. Edwards Deming, along with many other successful individuals who focused on quality, created an immense number of tools to discover the causes of quality issues. Fortunately, the tools are still being implemented by organizations today. The quality methods represent graphical techniques and consist of Pareto Charts, Process Flowcharts, Checksheets, Histograms, Scatter Diagrams, Statistical Process Control Charts, and Cause-and-Effect Diagrams. Russell and Taylor III clearly define the tools and their representation. Pareto Charts are designed for tallying the percentage of defects in which result from different causes to identify major quality issues; Process Flowcharts assist with focusing on where a quality issue may appear during a particular process; Checksheets demonstrate tallies of the number of defects for a list of problems that were discovered in the past; Histograms provide management with a frequency of data that is relevant to the quality problem; Scatter Diagrams identify "a pattern that may cause a quality problem" (Russell & Taylor III, 2014, p. 61); Statistical Process Control Charts......

Words: 543 - Pages: 3

Premium Essay

Mt435-01 Operations Management

...Quality Management and Lean Systems MT435-01 Operations Management Professor: Cuneyt Altinoz September 7, 2014 Quality Management and Lean Systems Managerial accounting can provide and prepare economic and financial information for manager and internal users (Weygandt, Kimmel, & Kieso, 2012). This paper will reflect some of the key concepts and topics and how this course has affected my personal, professional, and academic development perceptions, in which have provided a better understanding and confidence in today’s account for a small or large business organization. The course has provided many key concepts and topics to review and some of the concepts to have impact my learning and open my eyes to small and big business accounting practices such as the differences in account of the planning, directing, and controlling. The breakdown of those functions has helped with the understanding of how accounting is directed by the management teams of a small or large organization. The other key concepts and topics discussed throughout the term and I was able to recognize was the use of the cost-volume-profit analysis formulas to show the health of an organization from a small to large budgetary planning to see your spending habit. The statements of cash flow for the showing of where you or your organization is using funds for development of products such as material and manufacturing. The financial statements to review with the stakeholders and......

Words: 469 - Pages: 2

Free Essay

Albatross Anchor Unit 6

...Unit six Written Assignment Tamisha Matus MT435 Operations Management Kaplan University December 16, 2011 Introduction Question One Carefully review the assignment scenario/case study. From the limited information in the scenario/case study, along with your answers to the unit three written assignment, identify at least three direct and specific long-term and three direct and specific short term operations changes that Albatross Anchor must make to gain a clear and sustainable competitive advantage (provide detailed information to validate and support each recommended change) Long-Term Operational Changes (01) Improved technology to increase efficiency and effectiveness throughout the plant. Without a doubt, old technology makes it harder for the manufacturing process and takes longer to get the products to the end user. A five year plan to update technology would be more cost effective and can address the technology issues on a predetermined plan over the five year term. (02) Purchase new equipment to eliminate sharing manufacturing equipment between the two different types of anchors. The new equipment should be state of the art to assist with the technology upgrades and to get the most for the money. The separate equipment will eliminate the 36 hours of down time necessary to change over the equipment between production runs. (03) Separate manufacturing areas for the snag hook anchor and the bell anchors to increase production. This will tie......

Words: 942 - Pages: 4

Premium Essay

Unit 6

...six Unit Written Assignment Erica R Watson MT435 Operations Management Kaplan University June 28, 2011 Introduction Albatross Anchors manufactures two different types of anchors to satisfy their wholesale customers. The company once only manufactured the mushroom or bell anchor but when the competition heated up they began producing the snag hook anchor as well, this occurred in 1989. (Case Study) Being that Albatross Anchors is a major manufacturer and that they are continuing to grow it seems as though a bigger more organized workspace is needed to speed up both production and shipment of each anchor order. Question One Carefully review the assignment scenario/case study. From the limited information in the scenario/case study, along with your answers to the unit three written assignment, identify at least three direct and specific long-term and three direct and specific short term operations changes that Albatross Anchor must make to gain a clear and sustainable competitive advantage (provide detailed information to validate and support each recommended change) Long-Term Operational Changes (01) A long term operation change that Albatross Anchor needs to make is building another Administrative office that is detached from the warehouse in order to make it both safe and more efficient for all employees. (02)Installing up to date technology into the warehouse and administrative offices will help to gain business and give the company a more smooth transition when taking......

Words: 685 - Pages: 3

Premium Essay

Oper Management Seminar

...Jenna Campbell Unit 2 Seminar MT435- Operations Management February 16, 2012 * Discuss what makes a good design and how to measure design quality. * Describe the basic aspects of statistical process control * Explain what design quality refers to and discuss some of the tools and techniques for improving the design process Any design has a large impact on the quality of a service or product. Any product that is poorly designed may not meet customer needs or may be so difficult to make that the quality of the product is not very good. Designs that are costly can result in over priced products that lost market share. If a design process takes too long, a competitor can end up capturing the market by being the first to introduce the new products, services, or features. However, entering into the market prematurely can result in poor performance. Design may be an art, but any design process must be managed effectively (Russell and Taylor, 2011, P. 158). There are few processes that create an effective design. The first is to make sure the design matches product or service characteristics with customer requirements. Next, to make sure that the design ensures that customer requirements are met in the simplest and least costly manner. Thirdly, make sure that the design reduces the time required to design a new product or service. Finally, the design should minimize the revisions necessary to make a design workable (Russell and Taylor, 2011, P. 158). When......

Words: 353 - Pages: 2

Premium Essay

Albatross Anchor's

...MT435 Operations Management 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: Albatross Anchor’s fixed costs are down due to the fact that they house all departments in one location. The cost of manufacturing is $8.00 per pound for mushrooms and bell anchors and $11.00 per pound for snag hook anchors. Although, the advantage of housing all departments in one location is that their fixed cost is down the disadvantage is greater because they are operating inefficiently. In the long run this brings down their profit margin giving them a disadvantage when compared to competitors. b) Economies of Scale in material purchasing: Economies of Scale focuses on the company/plant getting larger and volume increasing, making the average cost per unit of output to drop. Albatross Anchor’s is not able to realize the economies of scale because they produce small batch sizes c) Cost of Raw Materials Sitting Idle in the Warehouse: Because raw materials just sit there until they are ready to be shipped out the cost is high. The company’s material purchasing department is able to get economies of scale but I assume this is what leads to the large idle inventory sitting in the warehouse. d) Cost of Finished Goods Sitting Idle in the Warehouse: Finished products......

Words: 789 - Pages: 4

Premium Essay

Mt435 Ocupational Management

...Unit three Written Assignment Lisa Schwartz MT435 Operations Management Kaplan University June 26, 2012 Introduction A small family owned business that they started in 1976 with four family members is Albatross Anchors. Now Albatross Anchors now employees one hundred and thirty. The building sits on 12 acres in a small town. We know that the adminidtravie offices are disorganized, dirty and are un inefficiently. The plant is old worn, dirty and not up to date with the new technology and it does not meet all US safety and environmental standards. In 1989 Albatross Anchors started fabricated snag hook anchors to be able to compete internationally. 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: Albatross has manufacturing costs set at $8.00 per pound for bell/mushroom anchors and $11.00 per pound for snag hook anchors. Even though they charge the same as their competitors, Albatross Anchors is experiencing a profit of 35% less. The losses seem to be caused by inefficiencies, and have affected the profit margin. B) Economies of Scale in material purchasing: In 1989 when Albatross Anchors starting manufacturing the snag hook, they needed new equipment. When the did that they did not expand the building, now both anchors have to share the......

Words: 990 - Pages: 4

Plus Size Tops | Lồng vận chuyển hàng không 31x51x34cm-MOD-T103 | Baixar toque para celular