Day: April 26, 2018

You just started a summer internship with the successful management consulting firm of Kirk, Spock, and McCoy. Your first day on the job was a busy one, as the following problems were presented to you.

Required: Supply the requested comments in each of the following independent situations.

1. FastQ Company, a specialist in printing, has established 500 convenience copying centers throughout the country. In order to upgrade its services, the company is considering three new models of laser copying machines for use I producing high-quality copies. These high quality copies would be added to the growing list of products offered in the FastQ shops. The selling price to the customer for each laser copy would be the same, no matter which machine is installed in the shop. The three models of laser copying machines under consideration are 1024s, a small-volume model; 1024m, a medium-volume model; and 1024G, a large-volume model. The annual rental costs and the operating costs vary with the size of each machine. The machine capacities and costs are as follows:

Copier Model 1024S 1024M 1024G
Annual capacity (copies) 100,000 350,000 800,000
Costs:
Annual machine rental 8,000 11,000 20,000
Direct Material and direct labor .02 .02 .02
Variable overhead costs .12 .07 .03

a. Calculate the volume level in copies where FastQ Company would be indifferent to acquiring either the small-volume model laser copier, 1024, or the medium-volume model laser copier, 1024M.

b. The management of FastQ Company is able to estimate the number of copies to be sold at each establishment. Present a decision rule that would enable FastQ Company to select the most profitable machine without having to make a separate cost calculation for each establishment. (Hint: To specify a decision rule, determine the volume at which FastQ would be indifferent between the medium and large copiers.)

2. Alderon Enterprises is evaluating a special order it has received for a ceramic fixture to be used in aircraft engines. Aeron has recently been operating at less than full capacity, so the firm’s management will accept the order if the price offered exceeds the costs that will be incurred in producing it. You have been asked for advice on how to determine the cost of two raw materials that would be required to produce the order.

a. The special order will require 800 gallons of endor, a highly perishable material that is purchased as needed. Alderon currently has 1,200 gallons of endor on hand, since the material is used in virtually all of the company’s products. The last time endor was purchased, Alderon paid $5.00 per gallon. However, the average price paid for the endor in stock was only $4.75. The market price for endor is quite volatile, with the current price at $5.50. If the special order is accepted, Alderon will have to place a new order next week to replace the 800 gallons of endor used. By then the price is expected to reach $5.75 per gallon.

Using the cost terminology, comment on each of the cost figures mentioned in preceding discussion. What is the real cost of endor if the special order is produced?

b. The special order also would require 1,500 kilograms of tatooine, a material not normally required in any of Alderon’s regular products. The company does happen to have 2,000 kilograms of tatooine on hand, since it formerly manufactured a ceramic product that used the material. Alderon recently received an offer of $14,000 from solo Industries for its entire supply of tatooine. However, Solo Industries is not interested in buying any quantity less than Alderon’s entire 2,000-kilogram stock. Alderon’s management is unenthusiastic about Solo’s offer, since Alderon paid $20,000 for the tatooine. Moreover, if the tatooine were purchased at today’s market price, it would cost $11.00 per kilogram. Due to the volatility of the tatooine, Alderon will need to get rid of its entire supply one way of another. If the material is not used in production or sold, Alderon will have to pay $1,000 for each 500 kilograms that is transported away and disposed of in a hazardous waste disposal site.

Using the cost terminology, comment on each of the cost figures mentioned in the
Preceding discussion. What is the real cost of tatooine to be used in the special order?

3. A local PBS station has decided to produce a TV series on state-of-the art manufacturing. The director of the TV series, Justin Tyme, is currently attempting to analyze some of the projected costs for the series. Tyme intends to take a TV production crew on location to shoot various manufacturing scenes as they occur. If the four-week series is shown in the 8:00-9:00 PM prime-time slot, the station will have to cancel a wildlife show that is currently scheduled. Management projects a 10 percent viewing audience for the wildlife how, and each 1 percent is expected to bring in donations of $10,000. In contrast, the manufacturing show is expected to be watched by 15 percent of the viewing audience. However, each 1 percent of the viewership will likely generate only $5,000 in donations. If the wildlife show is canceled, it can be sold to network television for $25,000.

Using the cost terminology, comment on each of the financial amounts mentioned in the preceding discussion. What are the relative merits of the two shows regarding the projected revenue to the station?

Heuristics are generally identified as “rules of thumb” that we use when making decisions. We evaluate information we already know, events we’ve already experienced, and actions we’ve already taken, to help us make quick and efficient decisions. In the heuristic process we make assumptions based on what we know, what we’ve done and what we’ve experienced (thus “rules of thumb”).

From your readings in the text this past week we’ve learned there are three types of heuristics; the representativeness heuristic, the availability heuristic and the anchoring & adjustment heuristic. Which of the three heuristic types is the most commonly used?

Post an answer to the following questions:

Based on what you’ve read and researched; in your opinion, which one of the three heuristic types do you believe is the most commonly used?

What information, facts, or data, did you use in coming to your conclusion (why did you select the heuristic you chose?)

Provide at least one, preferably two examples to support your conclusion?

ITeam, Inc. is a high-tech company based in Walnut Creek, California that produces, markets, and sells computer systems, peripherals, and other consumer electronic products to corporate clients and electronics retailers. iTeam has grown significantly in its first five years focusing on selling its products locally. Recently they have expanded nationally putting them in direct competition with larger, global firms. These larger companies can offer equal or lower prices with greater product diversity and more value added services.
In addition, iTeam’s cost structure has increased which has lowered their profit margins. Predicting future success is difficult since sales in this industry are difficult to predict as the high tech market has been erratic. The recent decision to source product from China has resulted in reduced product quality and political pressure domestically. In addition proposed EPA legislation if passed will be costly to producers of electronic goods. Lastly, iTeam has not established a formal sales program and relationship selling has been non-existent.
Variables in the external environment that effect sales consist of economic, legal and political, technological, social and cultural, and natural. There are many external environmental factors that are likely to affect iTeams future. The most likely to negatively affect this companies future is Global competition. Their recent national expansion from a local niche company to a national sales organization has put them in direct competition with larger companies who have the ability to price their products at the same level or lower than iTeams. In addition, these companies can offer greater product diversity and more value added services.
The recent move to source product from China has resulted in reduced product quality and caused political and social pressure for eliminating U.S. jobs. Also of serious concern is the potential level of lead in products manufactured in China. This could open the company up to legal risk from potential lawsuits and reputation risk if they were to have unfavorable media coverage.
The rapidly changing Technological environment is creating the need for extensive Research and Development to create constant innovations to keep up with the competition. The need to continually spend significantly on R & D to remain competitive in the market place is a significant factor.
If CEO Andrew Taylor chooses to move forward with an expansion into Europe and China, it will require a significant investment in an expanded supply chain and new distribution channels. It would also create the need for an improved manufacturing system to increase production capacity. Relationships would need to be developed with new customers and suppliers and iTeam’s current sales force is not experienced in this area. These challenges will clearly affect iTeam economically.

Variables in the internal environment include goals and objectives as well as internal culture, personnel, financial resources, production and supply chain capabilities, service capabilities and technological capabilities including but not limited to Research and Development. iTeam does not appear to have a well defined mission and even CEO Andrew Taylor is not convinced that the industry growth projections are accurate. Since this company was formed as an entrepreneurial start up by Mr. Taylor and several of his classmates from business school, the creative spirit has been allowed to flourish, resulting in a group of individual contributors unskilled in relationship building and most likely focused on how large they can get their commission compensation. There is currently no incentive for the sales team to spend time building new relationships with potential new suppliers or long term prospects.

You are a board member of a large company that manufactures and distributes aftermarket automobile parts. The board consists of six members. You are number two in seniority and the CEO is NOT on the board. The CEO has been a strong leader and an effective manager for over five years but lately the organization’s performance has fallen off and you will now have two consecutive years in the red. The CEO is highly regarded by the subordinates, but it is clear to you as a member of the board that many changes and adjustments have to be made. The serving CEO appears to be entrenched in approaching current challenges and opportunities with tried and true approaches.

The current CEO is internally focused, tradition based and conservative. He has shown some overly cautious actions with respect to entering new markets and expanding the company’s product line. The organization has little in the way of external investment activities and the CEO came close to dismissing the Deputy to the vice president for finance for an investment decision he felt was both risky and radical. He has consistently promoted managers from within and has a poor relationship with the VP for HR. There have been some long term problems with the quality level of one major product line (wheels) and the CEO has moved very slowly to correct it. Finally, he recently rejected the introduction of an enterprise architecture platform that was recommended by a major consulting firm.

What should you do and what should the board do? How should you do it?

1. A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two processes. One would entail a variable cost of $17 per unit and an annual fixed cost of $200,000; the other would entail a variable cost of $14 per unit and an annual fixed cost of $240,000. Three vendors are willing to provide the part. Vendor A has a price of $20 unit for any volume up to 30,000 units. Vendor B has a price of $22 per unit for demand of 1,000 units or less, and $18 per unit for larger quantities. Vendor C offers a price of $21 per unit for the first 1,000 units, and $19 per unit for additional units.

a. If the manager anticipates an annual volume of 10,000 units, which alternative would be the best for a cost standpoint?
b. For 20,000 units, which alternative would be best?
c. Determine the range for which each alternative is best. Are there any alternatives that are never best? Which?

. When advertising expenditure is increased, which of the aggregate and average (cost and revenue) curves shift their positions? Explain the direction of the shift. As an industry moves from being a monopoly to a monopolistically competitive one (due to the entry of new competitors as the monopoly’s patents expire, for example), what happens to the elasticity of the demand curve facing the firm? Why?

2. What is the service or product supplied by your firm? If there are more than one, pick one. What is the market structure for the market in which your firm supplies this product? Why? What does economic theory tell you about the short-run and long-run economic profits for a firm operating in this market structure?Do you observe that for your firm? Why or why not?

3. In the presence of excess capacity, firms sometimes launch new brands in an effort to increase their profits. Why would a monopolist not launch a new brand? Why do you think that launching a new brand is often done in monopolistic competition? Has your firm launched a new brand (provided a slightly differentiated service) in an effort to increase profits? Should it do/have done so? Why or why not?

4. Why is it that firms can earn profits in the long run in monopoly and oligopoly but not in monopolistic competition and perfect competition? What can firms do in monopolistic competition or perfect competition to make the short run last as long as possible since they can only make profits in the short run? Have you observed any firms employ such tactics? Can you give some examples?

Rx’s R Us is a mail order dealer of homeopathic medications. It has 6 phone lines for receiving orders. Order takers answer the phones, check that inventory is available, and then prepare “picking tickets” for the warehouse stock pickers. One order may consist of several lines, with a different medication or multiples of medications ordered on each line. Each order taker can prepare picking tickets at a rate of one line every three minutes. The telephones are normally answered from 6 am to 4 pm Pacific Time. Stock pickers can fill and package the meds at a rate of one line every five minutes. RX employs 8 stock pickers who normally work weekdays from 8 am to 5 pm (except for one lunch hour).
a. What is the effective capacity of order taking (in lines per week) vs. stock pickers?
b. The eight warehouse employees work 10 hours per day between 7 am and 6 pm, 6 days a week for 3 weeks after the fall catalog is mailed in October. What is the peak capacity of the system, in lines per week? [State whatever assumptions you make in order to generate your response.]
c. During the second week of October, Parts R Us filled 5,000 order lines. What is the utilization as a percent of effective capacity vs. peak capacity?

1. Motivators
Motivators can either be positive (as in using a rewards system) or it can be negative (as in the fear of disciplinary action or being fired).

Think back on your experience and write about an example of each you were subjected to. (We’re not talking about things you might have observed; what we want to hear about are occasions when others have tried to
motivate you using positive and negative means). Which had the greater impact on you? Which produced the better results?
Do you consider motivation in the workplace an important factor in accomplishing a task or project? Explain.

2. Power and Influence

You must have read about five types of power. Again based on your experience, which has had the greatest motivational influence on you? Why? Think of a situation which you did use power or one where you could have used power, briefly describe the situation and say which one you used? or in the case of could have which one do you think would have been most helpful in this situation? Was the result what you wanted? If not then which one might have been better?

A second thought, is using power and influence a way in your mind to get ahead? Why should you engage in this behavior or why not? Is this ethical in your mind? Why or Why not? Now that you know more about it has the reading influenced you one way or the other?

3. Groups and Teams

It is more challenging to motivate a group of people than it is to motivate a single individual. Why do you think that is so? If you were placed in charge of a group or are currently in charge of one, which type of power would you think works best in motivating a group? Why?

4. Learning

Learning is about change, and applying newly learned concepts to existing problems or to overcoming barriers. Write about an event in your experience where organizational learning produced change. How do you think this relates to the different theories of learning?

5. Organizational Decision Making
What are some of the most effective approaches to organizational decision making that you have seen, used, or experienced? What distinguished these approaches from each other, yet still made them effective?

Select a country that starts with the same letter as the first letter of your last name. As manager of your organization’s global operations, you are responsible to research the challenges and opportunities of staffing and managing a diverse workforce in your new location (i.e., a country of your choice other than the U.S.). Please note that diversity includes more than race and gender; it also includes other differences such as age, lifestyle, skills, ethnicity, work ethics, and so forth (Thomas, 2002).

Select a country for your company’s business. Your assignment is to conduct research about the country you selected for your company’s business and prepare a slide presentation for the CEO addressing the following:

Provide a brief overview of the country you selected for the company’s new business venture, such as the following: location; population; workforce; official language; discrimination laws; type of government (e.g., democratic, totalitarian, communist, etc.); and any other information you feel is important to understand to run a successful business.
What are some of the communications and cultural differences between the two countries, and how would those impact your business? Please explain and provide examples.
Are there differences in discrimination laws between the two countries? How would you address these differences? For example, if race, age, and/or gender were not protected by law in the country you selected, would you be able to follow the same hiring practices as in the United States? Why or why not?
Conclude your research report for your CEO by explaining some and the advantages and disadvantages of a diverse workforce.

Thomas, R. R. (1992). Beyond race and gender: Unleashing the power of your total work force by managing diversity. New York: AMACOM Division, American Management Association

What are in a leader of Religion sets them apart to be a leader? What is it that makes others want to follow them? What is in their personality that attracts followers that will be faithful? What is it that sets folks apart like Jim Jones and David Koresh and other leaders? Any ideas?

Religious pluralism is a tough concept for most people. We need to be as open minded as Jesus was in Mark 9. The disciples got all bent out of shape because they found others who were not of their own group healing people and using Jesus name to do so. Jesus told them if they were not against us they were for us. In other words, let them alone, they were still getting the work done! Is it possible to have different ways of doing things and still getting the same results? Just food for thought, what do you all think?
Blessings.