m m Bangalore Training Services (BTS) was an entrepreneur- ial start-up developed by Deepa Anand and...

 

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m m Bangalore Training Services (BTS) was an entrepreneur- ial start-up developed by Deepa Anand and Monisha Patel, two recent MBA graduates from the United States who had served internships in the summer with a US call center that was considering setting up operations in India but was unsure how to find suitable employees. Their plan was to offer training to Indian men and women in call center activities such as sales, service, and troubleshoot- ing for electronic goods of all sorts and then to match those employees to the needs of foreign firms looking to set up call centers. The training consisted of a dozen sessions covering culture, speaking fluency, electronic The planning committee of Exit Manufacturing Company (made up of the vice presidents of marketing, finance, and production) was discussing the plans for a new fac- tory to be located outside of Atlanta, Georgia. The fac- tory would produce exterior doors consisting of prehung metal over Styrofoam insulation. The doors would be made in a standard format, with 15 different insert panels that could be added by retailers after manufacture. The standardization of construction was expected to create numerous production efficiencies over competitors' fac- tories that produced multidimensional doors. Atlanta was felt to be an ideal site because of its location in the heart of the Sunbelt, with its growing construction indus- try. By locating close to these growing Sunbelt states, Exit would minimize distribution costs. The capital cost for the factory was expected to be $14 million. Annual maintenance expenses were pro- jected to total 5 percent of capital. Fuel and utility costs were expected to be $500,000 per year. An analysis of the area's labor market indicated that a wage rate of $10 per hour could be expected. It was estimated that produc- ing a door in the new facility would require 1.5 labor hours. Fringe benefits paid to the operating labor were expected to equal 15 percent of direct labor costs. Supervisory, clerical, technical, and managerial salaries were forecast to total $350,000 per year. Taxes and insur- ance would cost $200,000 per year. Other miscellaneous expenses were expected to total $250,000 per year. Depreciation was based on a 30-year life with the use of the straight-line method and a $4 million salvage value. awareness, buying and service behaviors, and other such basic matters that all call centers required. Questions Discuss how the following topics from this chapter might be of relevance to Deepa and Monisha in setting up their new firm: 1. Capacity planning 2. Learning curve 3. Bottlenecks 4. Psychology of waiting 5. Scheduling 6, Service map/blueprint Sheet metal, Styrofoam, adhesive for the doors, and frames were projected to cost $12 per door. Paint, hinges, door- knobs, and accessories were estimated to total $7.80 per door. Crating and shipping supplies were expected to cost $2.50 per door. Exit's marketing manager prepared the following price-demand chart for the distribution area of the new plant. Through analysis of these data, the committee mem- bers felt that they could verify their expectation of an increase from 15 percent to 25 percent in the current market share, owing to the cost advantage of standardization. Average sales price (S/door) $90 $103 $115 $135 Area sales (in units) 40,000 38,000 31,000 22,000 Questions Develop a breakeven capacity analysis for Exit's new door and determine the following: 1. Best price, production rate, and profit 2. Breakeven production rate with the price determined in Question 1 3. Breakeven price with the production rate determined in Question I 4. Sensitivity of profits to variable cost, price, and produc tion rate m m Bangalore Training Services (BTS) was an entrepreneur- ial start-up developed by Deepa Anand and Monisha Patel, two recent MBA graduates from the United States who had served internships in the summer with a US call center that was considering setting up operations in India but was unsure how to find suitable employees. Their plan was to offer training to Indian men and women in call center activities such as sales, service, and troubleshoot- ing for electronic goods of all sorts and then to match those employees to the needs of foreign firms looking to set up call centers. The training consisted of a dozen sessions covering culture, speaking fluency, electronic The planning committee of Exit Manufacturing Company (made up of the vice presidents of marketing, finance, and production) was discussing the plans for a new fac- tory to be located outside of Atlanta, Georgia. The fac- tory would produce exterior doors consisting of prehung metal over Styrofoam insulation. The doors would be made in a standard format, with 15 different insert panels that could be added by retailers after manufacture. The standardization of construction was expected to create numerous production efficiencies over competitors' fac- tories that produced multidimensional doors. Atlanta was felt to be an ideal site because of its location in the heart of the Sunbelt, with its growing construction indus- try. By locating close to these growing Sunbelt states, Exit would minimize distribution costs. The capital cost for the factory was expected to be $14 million. Annual maintenance expenses were pro- jected to total 5 percent of capital. Fuel and utility costs were expected to be $500,000 per year. An analysis of the area's labor market indicated that a wage rate of $10 per hour could be expected. It was estimated that produc- ing a door in the new facility would require 1.5 labor hours. Fringe benefits paid to the operating labor were expected to equal 15 percent of direct labor costs. Supervisory, clerical, technical, and managerial salaries were forecast to total $350,000 per year. Taxes and insur- ance would cost $200,000 per year. Other miscellaneous expenses were expected to total $250,000 per year. Depreciation was based on a 30-year life with the use of the straight-line method and a $4 million salvage value. awareness, buying and service behaviors, and other such basic matters that all call centers required. Questions Discuss how the following topics from this chapter might be of relevance to Deepa and Monisha in setting up their new firm: 1. Capacity planning 2. Learning curve 3. Bottlenecks 4. Psychology of waiting 5. Scheduling 6, Service map/blueprint Sheet metal, Styrofoam, adhesive for the doors, and frames were projected to cost $12 per door. Paint, hinges, door- knobs, and accessories were estimated to total $7.80 per door. Crating and shipping supplies were expected to cost $2.50 per door. Exit's marketing manager prepared the following price-demand chart for the distribution area of the new plant. Through analysis of these data, the committee mem- bers felt that they could verify their expectation of an increase from 15 percent to 25 percent in the current market share, owing to the cost advantage of standardization. Average sales price (S/door) $90 $103 $115 $135 Area sales (in units) 40,000 38,000 31,000 22,000 Questions Develop a breakeven capacity analysis for Exit's new door and determine the following: 1. Best price, production rate, and profit 2. Breakeven production rate with the price determined in Question 1 3. Breakeven price with the production rate determined in Question I 4. Sensitivity of profits to variable cost, price, and produc tion rate

Answer rating: 100% (QA)

Answer 1 Capacity Planning Deepa and Monisha need to assess the optimal capacity of their training center to meet the demand for call center training ... View the full answer