Introduction We at KU Consulting are here to help Albatross Anchors make the necessary improvements and adjustments to continue to grow and maintain a prosperous business. We understand that there are challenges that you must overcome in order to take the steps to become a business that is on top in every aspect including production, safety and customer satisfaction. We will identify and provide the essential guidance to get you where you need to be. We thank you for this opportunity and are looking forward to building a productive and valuable relationship with Albatross Anchors.
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: According to Dr. Frank Gary , the cost of production per unit is the cost that is associated with the production divided by the number of units produced. The scenario as it relates to Albatross Anchor’s is a cost reducing situation. Due to the company having all the departments in one place they are able to keep their fixed cost down. Currently the cost for them to manufacture the Bell Mushroom anchors is $8.00 per pound. They also manufacture Snag Hook Anchors at a cost of $11.00 per pound. Even though they charge the same as their competitors, the fact that there operations have a 36 hour turn-around, puts them at a disadvantage when it comes to their cost. The fact that there is such inefficiency with the process; it affects their ability to maximize their profits. In order to improve upon the cost of production, the turnaround must be shortened. This can happen by expanding the warehouse and dividing it into two sections so that both anchors can be produced at the same time; therefore decreasing the turnaround time. b)