Operation Decisions

In: Business and Management

Submitted By pyrat123
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Pages 6
ASSIGNMENT 1: OPERATIONS DECISION 2
The company that I am consulting is Simple Simon’s Pecan Pie Factory. Simple Simon’s has been producing pecan pies for thirty years and is an established and well-recognized competitor in the gourmet pie market. The company has two manufacturing plants in Tifton, GA and Charleston, SC, and ships its pies all over the world. Recently, I was contacted by the president of the company, Simon Fair, to make recommendations on how to turn around the company’s floundering operations. Over the last three years, Simple Simon has seen its market share fall and its revenue decline 15% each year. There have been several competitors that have entered the market within the last five years that have taken market share away from Simple Simon’s. With the current economic environment, the company faces some challenging decisions. Currently, the company employs 100 workers and produces 6000 pies per month. Each of the two factories is running at only 40% capacity, and the company has had to lay off 25 workers in the last 6 months. The firm’s fixed costs are high enough that they have caused total cost to currently exceed total revenue. The company must make a decision on whether to continue or cease operations.
The first step in analyzing Simple Simon’s financial situation is to do an environmental scan of their operations. An environmental scan refers to patterns, trends, and relationships within an organization’s internal and external environment. The scan will help identify threats and opportunities existing in the organization’s environment. It helps managers and decision-makers decide the future path of the organization (Environmental Scanning, p, 2).
Internal analysis of the environment is the first step of environmental scanning. The internal organizational environment consists of things such as management, organizational…...

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