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Albatross Case Study

In: Business and Management

Submitted By alicia13
Words 1019
Pages 5
Unit three Written Assignment

Alicia Turner

MT435-02 Operations Management

Kaplan University

Professor: J, Jackson

April 09, 2012

Introduction

Albatross Anchor is a company that is located in a small town. The company has been in business for over 30 years and has grown tremendously since the first day of their opening. Throughout the years the company has produced the same type of anchor and made changes to produce a better anchor with a higher quality. The company has been conducting business in a building that has been deemed to be not up to code and not so clean. This is beginning to generate some issues.

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: The Albatross Company has managed to keep all departments of the company within the same building, including manufacturing their products and this has helped keep costs down tremendously. Albatross’ manufacturing costs for the anchors are $8 per pound for the mushroom/bell and $11 per pound for the snag anchors. These prices that Albatross has set are the same prices as their competitors and yet they cut costs at a better level than their competition. b) Economies of Scale in material purchasing: Albatross produces their anchors by using the batch production method and finished products have sat inside the warehouse as finished goods. As we know this can be a cost disadvantage for a company. c) Cost of Raw Materials Sitting Idle in the Warehouse: Albatross is beating their competition when it comes to this type of cost. Since they have all of their departments inside this one building, they are cutting the cost of storing raw material that is not being used at the time of...

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