StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

LOG501 MOD 5 case Assn Productivy/Infrastructure - Essay Example

Cite this document
Summary
To: Danny Wilco - Managing Director From: Ross Terna – Purchasing Manager Date: February 26, 2013 Subject: Productivity Improvement Alternatives Report 1.0 Introduction EBBD currently has a productivity problem on the dock in relation to a backlog of trucks waiting to deliver and load items…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.5% of users find it useful
LOG501 MOD 5 case Assn Productivy/Infrastructure
Read Text Preview

Extract of sample "LOG501 MOD 5 case Assn Productivy/Infrastructure"

Download file to see previous pages

The options that are available for consideration are: partial automation of the unloading process; and expansion of the dock and delivery area. Although one option will have a higher fixed cost, the variable costs may be prohibitive. Therefore, it is important to look at the costs and benefits of increasing productivity. 1.1 Assumptions In order to provide an assessment a number of assumptions are required. They include: (i) A 300 day year (ii) Deliveries arrive within the same time frame and so there are no breaks in the unloading process. (iii) No Dock hand is required for the automation option 2.

0 Evaluation of alternatives Break-even analysis will be used in evaluating the two alternatives. This technique is used for non-routine decisions. The break-even point occurs at the point where total revenue is equal to total costs (Heisinger and Hoyle 2012; Eldenburg and Wolcott 2005). This is the point where profit is zero. Break even analysis is used to determine how the business is performing as well as to plan for profits (Alhabeeb 2012). In fact, Horngren et al (2000) indicate that managers are normally concerned about the break-even point because it provides information about the level of sales that must be generated to avoid a loss.

Risk induced questions such as: what will happen if a project does not run at capacity levels assumed, and will the project recover cost at the very least are motivations for calculating the break-even point (Singh and Deshpande 1982). The equation method will be used to determine which method will be beneficial to the company over the long term. The equation is: Revenues – Variable costs – Fixed costs = Operating income i.e. R - VC - FC = Operating income. The company breaks even when operating income is zero.

At this point R = VC + FC. Variable costs are costs that vary with the level of production while fixed costs are costs that remain the same over a relevant range of production/operation (Gutierrez and Dalsted 2012; Kinney and Raiborn 2011; Proctor 2012; Weetman 2010). The higher the fixed costs the higher the level of production required to cover these costs. However, fixed costs are costs that will remain whether or not the company remains in operation. EBBD is in the business of unloading tucks.

The faster the company can do that the better it will be as it will reduce the need for overtime work because deliveries and loading cannot take place within the regular work day in an efficient and effective manner. Two scenarios have been used to determine the best option. Scenario 1 considers a situation where there is no increase in deliveries and sales from vendors are flat. Scenario 2 on the other hand considers a growth rate of 3% per annum in deliveries. They will be considered under their respective headings. 2.1 Scenario 1 – No increase in Deliveries and Flat Sales This scenario considers a situation in which there is no increase in deliveries and the sales from vendors are flat.

The table in Appendix 1 indicates that after expending sums for either option the annual savings in relation to the total annual costs is $26,890 for the automaton option and $12,500 for the expansion option. This means that greater savings can be reaped from the automation option if the current situation remains. 2.2 Scenario 2 – Annual Growth Rate of 3% This scenario considers a situation where there is an annual growth in business of 3% per annum. The table in App

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“LOG501 MOD 5 case Assn Productivy/Infrastructure Essay”, n.d.)
LOG501 MOD 5 case Assn Productivy/Infrastructure Essay. Retrieved from https://studentshare.org/business/1468341-log501-mod-5-case-assn-productivy-infrastructure
(LOG501 MOD 5 Case Assn Productivy/Infrastructure Essay)
LOG501 MOD 5 Case Assn Productivy/Infrastructure Essay. https://studentshare.org/business/1468341-log501-mod-5-case-assn-productivy-infrastructure.
“LOG501 MOD 5 Case Assn Productivy/Infrastructure Essay”, n.d. https://studentshare.org/business/1468341-log501-mod-5-case-assn-productivy-infrastructure.
  • Cited: 0 times

CHECK THESE SAMPLES OF LOG501 MOD 5 case Assn Productivy/Infrastructure

Case Study 6-2 Johnson & Johnson's Enterprise Infrastructure

This paper discusses this approach by Johnson & Johnson of providing an information technology infrastructure to Case Study 6-2: Johnson & Johnson's Enterprise infrastructure Johnson & Johnson Company is an international American company that deals in offering consumer packaged goods, pharmaceuticals, and medical devices to its customers.... This paper discusses this approach by Johnson & Johnson of providing an information technology infrastructure to support the one-face-to-the-consumer strategy....
2 Pages (500 words) Case Study

Hurricane Katrina: Infrastructure Impacts

This paper "Hurricane Katrina: infrastructure Impacts" presents the various actions that are necessary for the U.... hellip; The overwhelming consequences that resulted from the levee failures at New Orleans generally focused the civil engineering sector and the country's attention on the cause of what refers to the worst nation's infrastructure accident in the history of the United States....
8 Pages (2000 words) Case Study

Information Technology Infrastructure for Bilfinger Deutsche Babcock Middle East FZE

The study "Information Technology infrastructure for Bilfinger Deutsche Babcock Middle East FZE" observes the case of implementation of the VPN network.... nbsp; It is recommended BDB often review its service level agreement with the vendor to ensure that it benefits fully from the system....
13 Pages (3250 words) Case Study

Information Security and the National Infrastructure

To start with, the United States energy infrastructure strengths the international financial system of the twenty-first century.... hellip; The researcher states that more than 80% of the nation's energy infrastructure is possessed by the nation's private sector.... Case Study 2: Information Security and the National InfrastructureThe United States energy infrastructure strengths the international financial system of the twenty first century....
2 Pages (500 words) Case Study

MEMETECH Technical Infrastructure Security Plan

The paper "MEMETECH Technical infrastructure Security Plan" discusses that the plan will be designed to respond to a dynamic environment, as well as providing the adaptable framework in addressing the emerging and evolving risk to crucial infrastructure.... hellip; The infrastructure security plan established the approach for setting plans, identify the infrastructure and combine threat information, vulnerability, and consequence to produce a rational assessment, systematic, or company risk and develop security mechanisms and resilience strategies, and measure their effectiveness....
7 Pages (1750 words) Case Study

Etisalat IT Infrastructure

The paper "Etisalat IT infrastructure " states that Etisalat has the aptitude to benefit from Voice over Internet Protocol since is its low down cost.... Etisalat has the capacity to have an abridged infrastructure.... Within the conformist telephony globe, numerous phone lines, forum calling features, as well as long-distance fees create many additional charges....
6 Pages (1500 words) Case Study

The Ethiopian Priority Rural Infrastructure

This case study "The Ethiopian Priority Rural infrastructure" presents a brief presentation on the urgency of giving priority to the development of rural infrastructure as it must take precedence over other sectors not merely for the simple reason of overwhelming population.... Improvements in communications, entertainment, or other areas can come but utmost urgency must be accorded to rural infrastructure.... If the road-networking as the major physical infrastructure were to be undertaken naturally the results would be encouraging....
9 Pages (2250 words) Case Study

Network Infrastructure Improvement

This analysis "Network infrastructure Improvement" tries to provide a permanent and sustainable solution to technological improvements of the DoD by first analyzing the existing IT and telecom applications and services, the network architecture, the existing business needs.... 4), the current network infrastructure of the DoD is isolated from the public ATM network infrastructure.... The internal network is also subject to possible network intrusions, there is a possibility of external intrusion through physical network interruption, hacking of the network infrastructure (Wong, 2009)....
10 Pages (2500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us