Homework SourseNeed help identifying strategies to adopt a timeline showing
Need help identifying strategies to adopt, a time-line showing the process to complete a manufacturing process – start to full production phase – and a 5-year financial projections from start of establishing the business, showing the amount of total FUNDS you need to establish and operate this business successfully, showing the best ROI to your management for this venture. And which activities can run parallel and which can not!
Assumptions:
Product: A/V Receiver for home entertainment /home theater use
Selling Price: $500 each
Cost of materials & Components: $100/unit
Direct Labor: 20 Persons, their salary is $5000/month
Full Production rate: 100 Units/day
Working days/Month: 25 days
O/H costs: 15%
Profit Rate: 25%
Rate of Growth for the company: 15% per year
As the production grows, the operating costs will grow with the same rate as well
The initial funding to purchase manufacturing equipment, furniture and other office facilities & remodeling of the leased buildings is = $350,000
List of Tasks (NOT in Proper order!):
Market Research 1 months $8,000
Plan for Business 1 months $12,000
Select Location, Land/Building for manufacturing 5 weeks $7000
Select Office Space for Business 2 weeks $3,000
Strategies/Objectives 1 week $5,000
Installing manufacturing equipment/machineries 2 months $10,000
Order additional equipment/tools/machineries 2 weeks $60,000
Order Office Equipment, Furniture, etc. 1 week $10,000
Design your Product 2 months $20,000
Approvals by Management for Design & Business Plan 2 weeks $8,000
Place order for all Components & Material for Production 3 weeks $15,000
Hire Production crew 3 weeks $10,000
Train the Production Crew 1 week $5,000
Hire Office Staff and setup Management team 2 weeks $8,000
Prepare Manuals for finished products & printing 3 months $15,000
Promotions & Advertising 3 months $85,000
Prepare marketing Materials 2 months $25,000
Select Dealerships 3 months $15,000
Testing the initial batch of Products for QC,
before the mass Production starts: 2 weeks $10,000
Solution
Since the company would engage in single product manufacturing ,here A/V receiver, home theater use. It is prident to use output costing technique as the company is going for mass production.Here element of cost is collated and identified & ascertained like direct materials,direct labour,direct expeses,prime cost, factory overheads,Administrative overhead,,selling & distribution overhead etc. Thus, the cost per unit can be derived as Total cost for the period / No. of units during the period. The statement of cost segregating the different heads and then arriving at profits can be used for projections
List of activities that can be carried out in seriatim with the corresponding time line is enumerated below:
Sl no
Activities
Time line
Remarks
1
Plan for Business
1 month
2
Strategies/Objectives
1 week
Can be done parallelly with Sl no 1
3
Market Research
1 month
Can run parallelly with Sl no 1
4
Select Location, Land/Building for manufacturing
5 weeks
Can run parallelly with Sl no 3
5
Select Office Space for Business
2 weeks
Can run parallelly with Sl no 3 &/or 4
6
Design your Product
2 months
7
Approvals by Management for Design & Business Plan
2 weeks
8
Installing manufacturing equipment/machineries
2 months
9
Select Dealerships
3 months
Can be done parallelly with sl no 8
10
Order Office Equipment, Furniture, etc.
1 week
Can be done parallelly with sl no 8 &/or 9
11
Hire Production crew
3 weeks
Can be done parallelly with sl no 8 &/or 9
12
Train the Production Crew
1 week
13
Hire Office Staff and setup Management team
2 weeks
14
Prepare Manuals for finished products & printing
3 months
15
Testing the initial batch of Products for QC,
before the mass Production starts
2 weeks
16
Prepare marketing Materials
2 months
17
Promotions & Advertising
3 months
18
Place order for all Components & Material for Production
3 weeks
19
Order additional equipment/tools/machineries
2 weeks
| Sl no | Activities | Time line | Remarks |
| 1 | Plan for Business | 1 month | |
| 2 | Strategies/Objectives | 1 week | Can be done parallelly with Sl no 1 |
| 3 | Market Research | 1 month | Can run parallelly with Sl no 1 |
| 4 | Select Location, Land/Building for manufacturing | 5 weeks | Can run parallelly with Sl no 3 |
| 5 | Select Office Space for Business | 2 weeks | Can run parallelly with Sl no 3 &/or 4 |
| 6 | Design your Product | 2 months | |
| 7 | Approvals by Management for Design & Business Plan | 2 weeks | |
| 8 | Installing manufacturing equipment/machineries | 2 months | |
| 9 | Select Dealerships | 3 months | Can be done parallelly with sl no 8 |
| 10 | Order Office Equipment, Furniture, etc. | 1 week | Can be done parallelly with sl no 8 &/or 9 |
| 11 | Hire Production crew | 3 weeks | Can be done parallelly with sl no 8 &/or 9 |
| 12 | Train the Production Crew | 1 week | |
| 13 | Hire Office Staff and setup Management team | 2 weeks | |
| 14 | Prepare Manuals for finished products & printing | 3 months | |
| 15 | Testing the initial batch of Products for QC, before the mass Production starts | 2 weeks | |
| 16 | Prepare marketing Materials | 2 months | |
| 17 | Promotions & Advertising | 3 months | |
| 18 | Place order for all Components & Material for Production | 3 weeks | |
| 19 | Order additional equipment/tools/machineries | 2 weeks |
