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Albatross Anchors Unit 3

In: Business and Management

Submitted By jtalee2003
Words 1578
Pages 7
Unit three Written Assignment

Tezra Lee

MT435 Operations Management

Kaplan University

June 4, 2013

Introduction

Albatross Anchor has been in business since 1976, and are the manufacturer of bell/mushroom anchors. They are strictly a wholesale organization; there is no retail service. Their building is comprised of their administrative offices, foundry, shipping and receiving, raw materials and finished product storage, and manufacturing. The plant is located directly behind the administrative offices in a building that is outdated and no longer meets US safety and environmental standards. In this case study, I will discuss possibilities to improve Albatross Anchor’s competitiveness, and determine if a new process will help to reduce costs.

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 competitiveness in relation to cost is about 35% lower than their competitors as a result of operational inefficiencies. They need to address the problems causing their inefficiencies in order to be in line with their competitors.

The cost to manufacture mushroom/bell anchors is the same as their competitors at $8.00 per pound, and $11.00 per pound for snag hook anchors. Some of the problems causing the company to lose money include shipping challenges, and raw materials costs. Due to the size, bulk, and weight the anchors are limited in the methods available for shipping – large truck, rail, or large ocean freighter. Storage space for finished products is at a premium and is shared with raw materials at the far south end of the building.

The down time between manufacturing processes is a drawback of the...

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