Assignment: Operations Decision Essay

Allentown Manufacturing play along is a family owned business that manufactures cardboard boxes. Currently, the society has a men rate of one hundred proletarians that work 20 out(a) of a month. The association has been able to last through some of the toughest sparing times, but recently the AMCs fixed cost is high passable, and their total costs be exceeding their total revenue. Assess the electric current environmental scan factors that argon relevant to the end making subroutine. correct the factors that testament have the greatest impact on platformt trading operations and counsels decision to continue or discontinue operations. entrust a rationale for your determination. Some environmental scan factors that argon impact the decision making process are amicable, economic and technological circumstances. When it comes to the social factors, the overleap of properly trained and skilled laborers are affecting the summation of production being put out on a wor kaday basis. The federation needs to heighten a better recruitment process and training program to employ the best and most profitable employees. In addition, the language barrier creates a problem for our omnibuss. The majority of our workforce is Hispanic and speaks minimal English this creates problems when trying to delegate job duties among the employees. The economic factors are that the country as a whole is trying to go fleeceable therefore recycling old cardboard boxes is more environmentally hospitable than using naked as a jaybird ones.This causes a slump in the amount of orders sexual climax in, therefore affecting the amount being shipped out. The technological factors are the lack of computer skills by some of the labor force. If the machines that lay down the product are not being run properly in order to produce the maximum output rate, therefore this entrust cause a decrease in profits. Management should focus the economic and social factors when coming t o the decision whether or not to continue operations. If the society focused on what will either hold the company back or push it forward, and then issues will begin to reveal themselves.Evaluate the financial performance of the company using the information provided in the scenario. Consider all the key drivers of performance, much(prenominal)(prenominal) as company profit or loss for both the concise term and long term and how each factor influences managerial decisions. Be sure to show the calculations that helped you reach your conclusions. The total revenue is the output multiply by the number of units produced per month TR=$32*6,000 TR= $192,000The monthly wages for the worker are the number of workers work out by the daily wage multiplied by the number of days worked in each month 100*$70*20= $140,000 The total inconstant cost is daily variable input multiplied by the number of days worked in a month TVC=$2000*20 TVC= $40,000 Recommend how the company can make better it s positivity to deliver more value to its stakeholders. Then, develop a brief plan to implement the recommendations. Allentown Manufacturing Company can improve its profitability in a variety of musical modes, such as expanding into new markets sectors, or developing new products or services.Some major changes that can take place to improve profitability can be to reduce manpower or exfoliation back on working hours, reducing costs, and increasing productivity and efficiency. I think AMC should work with their top management to create a confederacy with another company to begin manufacturing a new product to potentially emergence profits. Another plan can be to reduce the manpower either by hours or by personnel. This will allow the company to save money on wages, employment taxes, and employment insurance such as workmans compensation and unemployment insurance. Increasing productivity is a unfluctuating way to increase profitability. If the plant is able to acquire large or ders of boxes, this will in turn cause them manufacture a bigger amount of boxes.Management would also have to decide the best way to train the workforce to work in a more effective manner, decide whether or not it is feasible to purchase additional machines to increase the production and develop a proper training program to develop the workers skillset. Assess the circumstances in which the company should discontinue operations and how management should react when confronted with these circumstances. Provide a rationale with your response.The circumstances in which Allentown Manufacturing Company should discontinue their operations, is when their total costs surpass their total revenue. The company will not be able to maintain production or strike their cost demands such as salaries, materials, maintenance, etc. if they are constantly disbursal more money than they are making. Management should react in a manner that is in the best interest of the company and not themselves. If t he manager or managers are not able to develop a solid plan to match or pass the total costs that company is hitting each month, than the most feasible thing to do would be to shut the plant down. By continuing to manufacture the cardboard boxes, they are constantly increasing their costs from the electricity being used, and the workers needing to get their salaries.