Operations Decision - Essay Example

2. Environmental factors The domestic market for robotics spreads across five major and distinct industries. The automotive industry is the largest consumer of robotics products mainly used in painting and welding operations. The other industries include foundry and heavy manufacturing, aerospace and defense, electronic assembly and consumer products among others. While the automotive industry has shown the most impressive growth in robotics applications to date, it is the electronics assembly market that will be the growth sector of the future (Vassilis, 2008).

This is the market which Gen has focused on. Gen has determined that purchasing decisions are currently based in descending order on the following factors: Product reliability Ease of operation Performance specifications Price I am convinced that the noted purchase factors will ultimately determine which suppliers enjoy the most success within the market. 3. We currently use 100 workers to produce 6,000 units of output per month (working 20 days / month). The daily wage (per worker) is $70, and the price of the firm's output is $32.

While Gen management feels that pricing will be the least important variable in a purchase decision, the company will price its products at the middle of the market — approximately $40,000 per unit. Potential mid-range price hesitancy on the part of customers will be met head on with specification sheets comparing Gen product performance with competitors and on-site product demonstrations. Gen’s innovative designs result in greater flexibility with potentially lower manufacturing costs than competitors’ products.

This will allow the company to regain standard margins above the industry average in spite of our cost exceeding the total revenue (Maria, 2000). I will avail multiple unit order discounts of up to 13% to quantity buyers (units purchased within a sixty-day period will qualify for quantity discounts reduced by 25%). It will be company policy to require a 15% cash deposit on all orders, with the balance due within 45 days of installation. With this in mind, even though the cost of other variable inputs is $2,000 per day, as the new managing consultant, this proposal if and when fully implemented, will be able to deal with the firm's fixed cost is which currently is “high enough” so that the firm's total costs does not exceed its total revenue.

The failure which brought the marginal cost of the last unit to be $30 will be a thing of the past (Nick, 2005). 4. Sales Plan Gen will use only in-house sales personnel with impeccable credentials and extensive product training. The needs of the customer will be the main emphasis on a continuous basis. During the first twelve months, I will focus on establishing contacts with target customers. All sales in the first year will be made by home office based personnel. Sales personnel will be compensated with a relatively standard base salary and a “bonus” payable quarterly based on collected payments on sales made in the preceding three months.

Bonus schedules will begin at 2% of ex-factory sales price (excluding freight) and will step to a maximum of 7% with no upward dollar limit. Sales personnel