Assignment: Operations Decision Essay

Allentown Manufacturing Company is a family owned business that manufactures cardboard boxes. Currently, the participation has a manpower rove of 100 acidifyers that work 20 out of a month. The company has been qualified to last through both(prenominal) of the toughest economic times, but recently the AMCs fixed cost is high enough, and their tot be argon exceeding their total revenue. Assess the current environmental s bay window factors that be relevant to the finish making process. De experimental conditionine the factors that will have the sterling(prenominal) impact on political platformt operations and managements decision to pass or discontinue operations.Provide a rationale for your determination. virtually environmental scan factors that are affecting the decision making process are social, economic and technological circumstances. When it comes to the social factors, the lack of properly proficient and skilled laborers are affecting the do of production be ing ensnare out on a daily basis. The company needs to explain a better recruitment process and training program to h hoar the exceed and most win qualified employees. In addition, the language barrier creates a problem for our managers. The major(ip)ity of our workforce is Hispanic and speaks minimal English this creates problems when assay to delegate job duties among the employees. The economic factors are that the country as a whole is trying to go green therefore recycling old cardboard boxes is more environmentally friendly than using new ones.This causes a decrease in the amount of orders coming 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 produce the product are not being beat properly in order to produce the maximum output rate, indeed this will cause a decrease in profits. Management should focus on the economic and social factors when coming to the decision whether or not to continue operations. If the company focused on what will either hold the company back or push it forward, and then issues will take to introduce themselves.Evaluate the financial performance of the company using the information provided in the scenario. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term and how each factor influences managerial decisions. Be sure to show the calculations that helped you affect your conclusions. The total revenue is the output cipher 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 multiplied by the daily wage multiplied by the number of long time worked in each month 100*$70*20= $140,000 The total variable cost is daily variable input multiplied by the number of days worked in a month TVC=$2000*20 TVC= $40,000 root on how the company can improve its profitability to deliver more note value to its stakeholders. Then, develop a brief plan to implement the recommendations. Allentown Manufacturing Company can improve its profitability in a variety of ways, 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 scale back on workings hours, reducing cost, and increasing productivity and efficiency. I think AMC should work with their book binding management to create a partnership with another company to begin manufacturing a new product to potentially adjoin 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 solid way to increase profitability. If the plant is able to acquire larger orders of boxes, this will in bend cause the m manufacture a larger amount of boxes.Management would overly have to decide the best way to train the workforce to work in a more efficient 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 meet their cost demands such as salaries, materials, maintenance, etc. if they are constantly spending 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 the manager or managers are not able to devel op 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.