...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 The plant is located directly behind the administrative offices in a building that is outdated and no longer meets US safety and environmental standards.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...
Words: 1578 - Pages: 7
...Unit Three Written Assignment MT435 Operations Management Kaplan University 4 June 2013 Introduction This case study is about a small business that manufactures anchors for marine craft. This company has grown over the years and employees one hundred and thirty people. It is located in a small rural suburb town of Smalltown, USA. This company faces operational challenges, the plant is old and worn and the technology is outdated. At the same time the plant is not meeting US safety and environmental standards. So for this company to survive these issues need to be taken care. 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 cost of manufacturing is $8.00 per pound for mushroom/bell anchors and $11.00 per pound for snag hook anchors. b) Economies of Scale in material purchasing: According to our reading Economies of Scale is defined as, “When it costs less to produce high level of output”(Wiley, 2011, p.259). Albatross struggles here because each anchor requires its own unique equipment and they produce what is requested. They only have one manufacturing line and it takes 36 hours to switch the line to produce the other anchor. So due to this they are unable to provide an economy of scales, they can’t ...
Words: 1018 - Pages: 5
...Case study on Albatross Anchor MT435 Operations Manageme 11/27/12 Introduction Albatross Anchor is a small family owned business located in Small Ville, MA. Albatross Anchor is located on 12 acres of land. They started out with four employees in 1976 and grow over the years to over 100. The company manufactures two types of anchors in different sizes. The types are the mushroom/bell anchor and the snap hook anchor. Albatross Anchor has many manufacturing problems which are the cause of the company not doing as well as it should be. The company build old, worn and does not meet government guidelines. Albatross can be a company of the future with the application of much need upgrades and expansions. 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 and Production: Albatross Anchor‘s competitiveness in relations to cost below their competitors. They are 35% lower than their competitors. The cause of this is all the operation inefficiencies. They need to correct all of their problems in order to get in line with the competitors. The cost to manufacture is the same as the competitors $8.00 per/lb. for mushroom/bell anchors and $11.00 per /lb. for snag hook anchors. But, with the high price of shipping raw materials in finished goods not shipping out...
Words: 1679 - Pages: 7
...Unit three Written Assignment Lacy Smith MT435 Operations Management Kaplan University July 1, 2013 Introduction Albatross Anchor’s is a family owned business that started in 1976 that grew to employ one hundred and thirty employees. All departments of the company are in one building and the departments consist of an administrative office, manufacturing, shipping, receiving, raw materials storage, finished goods storage and the foundry. Through the years the standards of the department has decreased and Albatross needs to revamp their company to be up to those standards of the US and environmental. 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 is $8.00 per pound for mushroom/bell anchors and $11.00 per pound for snag hook anchors. The cost of production definition is the cost of making or acquiring goods and services that directly generates revenue for a firm. It consists of direct and indirect costs. (Cost of Production, 2013) b) Economies of Scale in material purchasing: An economy of scale is the reduction in long-run average and marginal costs arising from an increase in size of an operating unit. (Economies of Scale, 2013) It can be external or internal; external will increase the productivity of the industry and will result...
Words: 1122 - Pages: 5
...analysis, designing and innovations. Albatross Anchor needs to become more effective with the opportunities and challenges in its operating environment. Albatross’ operating system must be capable of producing quality products (anchors) that are n demand within a time frame that is acceptable to the industry. 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 or Production: The first issue that needs to be addressed is; how much of the fabricating of the anchors could be outsourced? Albatross, a vertically integrated company has an antiquated and technology-deprived plant as well as non-compliant on safety and environmental issues. The factors that can make outsourcing desirable to Albatross Anchors are quality and speed. Quality, which is “standardization of parts, supplier certification, and supplier involvement in design can improve the quality of supplied parts.” (www.allbusiness.com) Speed of the supplier can produce the components quicker, with adaptability, flexibility and reliability then this is a time benefit for outsourcing. Albatross Anchors is lacking the production capabilities to output products in relation to the industry and customers demands. Outsourcing would be a benefit to the production of the customized and specific anchors and a valuable asset to put into...
Words: 1658 - Pages: 7
...Unit Six Written Assignment KU Consulting Proposal for Albatross Anchor Your Name MT 435 Operations Management University Date Introduction: Albatross is a family owned business with employee strength of 130. It has manufacturing, shipping department, raw material, finished product storage and the foundry. The administrative offices are disorganized and run inefficiently. The plant does not meet US safety and Environmental standards. Albatross sells the product at wholesale level only. There are two major types of products manufactured by Albatross i.e. Bell Anchors and Snag Anchors. Both the products cannot be manufactured simultaneously. Albatross is experiencing loss because of inefficient operations; shipping of the product is also challenge. Products of Albatross: S. No Product Name Manufacturing Process Usage Sizes 1 Bell Anchor Foundry Fresh water marine craft Multiple sizes 2 Snag Anchor Bending and Welding Salt Water marine craft Multiple sizes Departments of Albatross: 1. Manufacturing 4. Raw Material Storage 2. Shipping 5. Finished Product Storage 3. Receiving 6. Foundry 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...
Words: 1133 - Pages: 5
...Unit three Written Assignment Debbie Crabtree MT435 Operations Management Kaplan University February 17, 2014 Introduction Albatross Anchors is a family owned business that began in 1976 with four family members and has grown over the years now employing 130 people. The company’s facility is located on 12 acres of land and is comprised of only one building. This building includes the administrative offices, shipping and receiving, foundry, manufacturing and large machine area, and raw and finished products areas. Albatross Anchors manufactures two different types of anchors; the mushroom/bell anchor and the snag hook anchor. Because of the different manufacturing processes and the limited size of the facility Albatross Anchors cannot produce either anchor in mass production. They are strictly a wholesale only business distributing their products through middlemen or to OEM customers as a component in the manufacture of boats. We will discuss Albatross Anchors competitiveness in the market and how they may improve their processes. 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 Anchors produces two types of anchors which require their own unique equipment and manufacturing process. The manufacturing area of the plant has...
Words: 1626 - Pages: 7
...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 is costs incurred by Albatross Anchor when manufacturing an anchor. The company can run into two different costs; variable and/or fixed costs. Variable costs depends on what’s needed to make the anchors. What is needed differs with how many anchors Albatross produces. Then there is fixed costs; utilities and rent, these two are always present no matter the volume of anchors being produced (Russell & Taylor, 2011, p. 230). The cost to manufacture is $11/lb. - hook anchor and $8/lb. for a mushroom anchor. Albatross sells anchors for the same price as competitors, which is how they are losing money. They should sell the anchors for a little less because then they would in return get more business and have a chance of doing better than their competitors. b) Economies of Scale in material purchasing: When a company achieves economies of scale lowers their average cost per unit through increasing production since fixed costs are shared over an increased number of goods (Hindle,2008). When a company starts growing and their production units starts increasing, the company will have better luck decreasing the costs of their product. Economic growth may be achieved when economies of...
Words: 1478 - Pages: 6
...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...
Words: 1098 - Pages: 5
...Unit three Written Assignment Vanna Mata MT435 Operations Management Kaplan University September 22, 2011 Albatross Anchor has been in business since 1976. They are manufacturer of bell/mushroom anchors. They are only deal with wholesale; there is no retail service at all. Their building consists of their administrative offices, foundry, shipping and receiving, raw materials and finished materials storage, and manufacturing. Their building is not up to standards and is very old. In this case study, I will discuss as how to improve Albatross Anchor competitiveness and see if there is a new process to help bring down the 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: Since Albatross Anchor keeps all departments in one building; this keeps the fixed cost down. The cost of manufacturing for the mushroom/bell anchors are $8.00 per pound and $11.00 per pound for the snag hook anchors. The charge the same per unit as their competitors due but since all departments are housed under one building, there are operations inefficiencies. This can bring down their profit margins. This would mean that Albatross Anchor has a cost disadvantage compared to competitors. b) Economies of Scale in material purchasing: “Economies of scale, also called increasing returns...
Words: 1174 - Pages: 5
...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 soon...
Words: 864 - Pages: 4
...Unit three Written Assignment Katie Cowell MT435 Operations Management Kaplan University July 23, 2012 Introduction Albatross Anchor is a small business that began in 1976 with only four family members working there. Since then Albatross Anchor has grown from only four people to one hundred and thirty people. Albatross anchor is on a small twelve acre lot and is located in a rural suburb town of Falmouth, MA. The plant and the administrative offices are located in the same building. The plant includes the shipping department, receiving department, manufacturing, raw materials storage, finished product storage, and the foundry. The administrative offices are defiantly needed some repairs because they are somewhat shabby, disorganized, and run inefficiently. The plant needs some repairs and some modern advances to it and production of the bell anchor and the snag hook anchor would increase in the company. In 1989, the owners decided to add on the snag hook anchor because of international competition. Technology advances and building repairs are very important at this point of Albatross Anchor. The plant no longer meets U.S. safety and environmental standards which can be unsafe for the one hundred and thirty employees that work at Albatross Anchor. 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...
Words: 2139 - Pages: 9
...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) Economies...
Words: 1323 - Pages: 6
...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...
Words: 1655 - Pages: 7
...Unit 3: Albatross Anchors Assignment Jacob Barac MT435 Operations Management Kaplan University November 26, 2012 Albatross Anchors Assignment Introduction Albatross Anchors is a family- owned business which was established in 1976, Smalltown, MA in the United States. Albatross Anchor started with four family members, and has largely grown to one hundred and thirty employees. Their operations consist of varies aspects; manufacturer of bell or mushroom anchors. The Albatross Anchors only distributes their products to wholesale, but not retail service provider. Their building consists of administrative offices, foundry, shipping and receiving, raw materials and finished materials storage, and manufacturing. The building is not in good standards and would rather need remolding. In this case study, I will discuss how to improve Albatross Anchor competitiveness by adding some new process to help bring down the costs of remolding their building to meet the United States environmental ethic laws. 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: Since Albatross Anchor keeps all departments in one building; this keeps the fixed cost down, and lowers expenses in term of variable cost. The cost of manufacturing for the mushroom/bell anchors are $8.00 per pound and $11...
Words: 2272 - Pages: 10
