Curled Metal Inc. Operations Management
Autor: Omprakash Jha • August 24, 2018 • Term Paper • 471 Words (2 Pages) • 610 Views
Assignment
Curled Metal Inc.
17PGP246
Omprakash Jha
Based on the analysis of the trail runs conducted by both Kendrick Foundation Company and Corey construction, we can arrive at the worth of the CMI product for the end user.
Kendrick Foundation Company
- Cost per conventional pad used = $150/24 = $6.25
- Number of conventional pads = 24*20 = 480
- Total project cost = 480*$6.25 = $3000
- Number of CMI pads used = 6
Therefore, corresponding worth per CMI pad = $500
Corey Construction
- Cost per conventional pad used = $120/12 = $10
- Number of conventional pads = 12*50 = 600
- Total project cost = 600*$10 = $6000
- Number of CMI pads used = 5
Therefore, corresponding worth per CMI pad = $1200
Manufacturing Costs
The overall manufacturing costs including the sales margin
| Existing Equipment | Permanent Tooling |
Material cost | $ 46.92 | $ 46.92 |
Labor cost | $ 86.40 | $ 34.92 |
Factory overhead @ 360% | $ 311.04 | $ 125.71 |
Margin @ 50% | $ 222.18 | $ 103.78 |
Selling Price | $ 666.54 | $ 311.33 |
Based on the two conclusions, moving to a permanent tooling manufacturing process will help reduce manufacturing costs and thereby increase margins.
Given its new product and consumers are not used to paying around $600 for a piece, they could initially be priced a bit more conservatively.
Potential Market Size
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