Management 313 Operations Strategy Case Study - 1783 Words

Capacity and Process Technology Strategy Advice for Bonkers Chocolate Factory: A central aspect of the dynamic problem facing a business in an evolving and competitive industry is the decision about additions to productive capacity. The purpose of this report is to provide strategic advice for the CEO of Bonkers Chocolate Factory (BCF), the U.S division of a multi-national candy company operating in the highly competitive chocolate products market. In late 2001, the main issue facing BCF management involves determining and agreeing on an appropriate strategy for the purchase of extra conching capacity, through the implementation of either new in-house developed conching technology or existing conventional conching technology. Other†¦show more content†¦Due to the perishable nature and shelf-life quality (performance objective) restrictions of the products, a smoothing strategy is ruled out when considering timing capacity change in combination with either new or conventional conching technology options. Further analysis of other capacity or process tec hnology factors will help to determine whether a capacity leading or lagging strategy is the most effective option for BCF. Even when the demand for an operations products can be reasonably well forecast, the inherent uncertainty in all estimates of future demand may inhibit the business from investing capital to meet the most likely level of demand. Contrastingly, this principle can be linked to the concept of economies of scale. For BCF the addition of one unit of capacity i.e. from the extra capacity provided by the conventional technology option, the total fixed costs per unit of potential production output will decrease. For the new technology option, the addition of one unit of capacity will increase unit costs – a diseconomy of scale. Initially, this claim is based on the capital cost of implementing the new technology option, as well as diseconomies of over using capacity having the effect of increasing unit costs above a certain level of output. As a result, more operations activitiesShow MoreRelatedManagement 313 Operations Strategy Case Study1791 Words   |  8 PagesProcess Technology Strategy Advice for Bonkers Chocolate Factory: A central aspect of the dynamic problem facing a business in an evolving and competitive industry is the decision about additions to productive capacity. The purpose of this report is to provide strategic advice for the CEO of Bonkers Chocolate Factory (BCF), the U.S division of a multi-national candy company operating in the highly competitive chocolate products market. In late 2001, the main issue facing BCF management involves determiningRead MoreResource Management At Apple Inc.1146 Words   |  5 PagesResource Management Resource management is another interesting and important topic in the business of various organizations engaged in the manufacturing and sale of goods and service. Several organizations in the technology industry have managed to make investments in this industry, and thus it is important to monitor the use of various resources to avoid wastage. 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