Case Problem Production Strategy Essay

1. The recommended morsel of BodyPlus100 and BodyPlus200 machines to produce?Sol I recommend you sir to produce fifty 1 (51) song of BodyPlus100 and seventeen (17) numbers of BodyPlus200 machines so as to make the maximum pay in manufacturing of these BodyPlus100 and BodyPlus200 machines. The printing on profits of the destiny that the number of units of the BodyPlus 200 produced must be at least 25% of the complete production?Sol The enlighten profit that is obtained in manufacturing BodyPlus200 at least 25% of the total machines allow be marginally less when comp atomic number 18d to the profit that is obtained in manufacturing much BodyPlus100 machines i.e. more than 75% of total machines production. As calculate, the total expenditure that is make in manufacturing BodyPlus100 (includes the raw cost and labor costs) is $1309 per machineThe total number of working(a) hours in manufacturing BodyPlus100 (includes machining, welding, painting, finishing work and for assemb ling, testing and packaging) is 15hrs.Now, the mesh profit that is make in manufacturing one BodyPlus100 machine after selling it to an authorized head for (70% of the retail price i.e. $2400) is ($1680 $1309) $371.Now the profit made per hour on manufacturing one BodyPlus100 machine is $24.73Admittedly, referring to the calculations from attachment 1 from Production strategy the pelf profit made per hour on manufacturing one BodyPlus200 machine is $20.83 Where efforts should be expended in order to increase contribution to profits?Sol I sincerely advise you, sir, to reduce the total percentage of manufacturing the BodyPlus200 in the total production as the profit obtained for each BodyPlus100 is more than the BodyPlus200. Also depute lesser time for machining and welding is also resulting in the total number BodyPlus100 machines produced so as to obtain more profits and time has to be managed well so that assigning ten (10) more hours for machining and welding leave alone res ult in more number of products that preserve be manufactured. sooner of assigning 450 hours for finishing and painting, we buns assign 440 hours for finishing and painting that can produce one more BodyPlus100 (taken that the total percentage of BodyPlus200 is just around less than the percentage recommended as 25% of the total production). Case Problem2 ascendent Plus If Solutions Plus wins the beg, which production installation (Cincinnati or Oakland) should supply the cleanup position fluid to the locations where the railroad locomotives be cleaned? How much should be shipped from each facility to each location? SolNo. of gallons requiredNo of gallons supplied fromCincinnati(in gallons)Oakland(in gallons)Santa Ana22,41822,418El Paso6,8006,800Pendleton80,29030,29050,000Houston100,47750,44750,000Kansas city241,570191,57050,000Los Angeles64,76114,76150,000Glendale33,68933,689Jacksonville68,48618,48650,000Little Rock148,58698,58650,000Bridgeport111,47551,47550,000Sacramento11 2,00062,00050,000Total990,522517,615462,907Here we can see that the total numbers of gallons that are delivered from Cincinnati are more than 500,000 gallons. So we are short of 17,615 gallons of the locomotives cleaning agent that has to be delivered from Cincinnati.To satisfy the requirement of the majority of the dealers in the remaining locations, and considering the profits, all the 17,615 gallons of the cleaning agent is cut from the Pendleton deal. What is the break-even point for Solutions Plus? That is, how low can the company go on its bid without losing money?Sol The wear off-Point is given by the point at which the company owns neither profit nor loss during the sale of the company products. thence this is given as the zero profit and zero loss partition off for the Solution Plus company. This Break Point can be calculated when there is no profit in the bid. If the price of embrocate is hiked and commitment charges are also increased by the same amount, then the Br eak Point is calculated at $1,821,214.39If Solutions Plus wants to use its standardised 15% markup, how much should it bid? Sol If Solution Plus wants to use its standard 15% markup, then it should place a bid for $1,821,214.39 Freight costs are significantly affected by the price of oil. The contract on which Solutions Plus is bidding is for two years. Discuss how fluctuation in incubus costs might affect the bid Solutions Plus submits. Sol Here, the net profit made for one year is $237,749.72 and if the bid is made for one year the total amount has to be $1,821,214.39 but given that the bid has to be made for two years, then the bid price would be $3,642,428.78And the profit expected in two years (taken the oil prices are fixed) is $475,499.44If the oil price is hiked by 15% then also profit is expected for the Solution Plus Company as there are few locations which are supplied with the cleaning agents without any shipping charges. So scarcely a marginal amount of profit can be made in two years even after placing the bid. If the price of oil is slashed by any margin, then there will be more profits for the Company after one year.