1 point for con 4 At what level of sales (in units) would Joseph A. Bobcat be in
ID: 1140102 • Letter: 1
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1 point for con 4 At what level of sales (in units) would Joseph A. Bobcat be indifferent between the two compensation plans? the FORMULA used to answer this question in the vellow cell below. Formula should reference only cells cont 1 point for corre 10,000 units 10,000 10,000 5 Part 2:Qualitative Analysis You are a manufacturer of automotive parts. Your customers include 5 major automobile manufacturers. These manufacturers account for 90% of your revenue and 95% of your operating income. They buy parts from you to supply their manufacturing plants located in the US. The locations of the plants are in the mid-west, the southeast, Texas, and the west coast All of the manufacturing plants adhere to a Just-In-Time (JIT) philosophy. Accordingly, you must deliver parts to each manufacturing plant at the right time, in the right quantities, and of the specified quality. Steering wheels represent 30% of sales to your customers. 58 59 Recently, you have been considering outsourcing production of the steering wheels that you supply to your customers. If you do outsource, your operating income will increase by 10%. This 10% increase in operating income is very important to your business. The company that bas offered the outsourcing deal is located in Accra, Ghana. Financially, the outsourcing deal 60 is a good one, but you are concerned about qualitative factors. 61 62 1 Identify 3 qualitative factors that could cause you to reject the outsourcing deal 63 2 Briefly explain why each of the 3 factors could cause you to reject the outsourcing deal 64 3 Could negative factors be mitigated'to make the deal acceptable? Briefly explain how 2 points 4 points 4 points Sheet1 Ready Type here to search di eExplanation / Answer
1. The three factors that could cause us to reject the outsourcing deal (i) uncertainty about the quality that the Ghana supplier will provide (ii) timely delivery from Ghana, Africa to the US. (iii) Capacity constraints for the Ghana supplier.
2.(i) Poor quality parts could cause loss of business from the automobile manufacturers and tarnish the company's reputation (ii) Since the requirement for the parts are just in time - if the supplier located in Ghana is unable to supply the products on time to the US, it would cause loss of business (iii) Supply shortfall can lead to automobile manufacturers to source the parts from a competitor.
3. The negative factors can be mitigated if proper checks and balances are put in place. For instance: the company should perform random quality checks on the parts supplied by the supplier in Ghana to ensure quality standards are adhered too. Second, company should monitor the timely delivery of orders and ensure that logistics are managed well. Third, proper demand supply mapping should be done by the company to ensure that demand of auto parts does not outpace supply.
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