What specific recommendations would you make to Martin Kelsey in February 2010? Be specific and provide support for your recommendations (using the supporting spreadsheet available on the website). These recommendations should be suitable for presentation for upper management at Foldrite.
Options under consideration include: Overtime, subcontracting, hiring, training, and change in design (and financial implications, risks, and other nonfinancial implications of each choice).
the fixed cost is too high. The better option would be to have a lesser loss. This is also shown in the spread sheet of 2006 for Product 101. It can be seen that total Contribution is more in case when the selling price is kept the same at $24.50, when they sell 750,000 products. The total contribution is $ 17,602,500.00, when the selling price is $24.50 and the total contribution is $12,212,000.00 when the selling Fold Rite furniture Co. is a Chair manufacturing company which manufactures three products which are Cloud Chair, Alstrong and Green Comfort. The company had a growth from 1987 to 2006; however a decline was seen from year 2006 onwards. The decline was mainly due to the loss of productivity and yields. The main reason was also considered to be the steep demand of the cloud chair during specific months of the year.
Although the company had enough workers to produce all the three chairs during whole year, it does not have enough workforce to meet the demand during the seasonal peak for cloud chair.
Further, the report delineates solution and few recommendation which FoldRite furniture should consider The approach used for this case is to review the company situation, provide working (calculations) and reasoning, and recommend a course of action for meeting a surge in forecast demand for the middle months of 2010. Bearing in mind the company history and constraints, the four major goals have been considered and used to guide the recommendations developed for this...
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