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aic netbooks case solution

Category: Business Paper Type: Homework Reference: APA Words: 1500

AIC Netbooks: Optimizing Product Assembly

To:

From:

Date:

Subject: Case analysis

Dear Xyz,

The case:

The case is about development of QuiN Netbook, which is designed to provide cheap and small size laptop in electronic market. The case analyzed different challenges faced by the company for the development of QuiN Notebook. It was necessary to develop motherboard immediately after the introduction of Intel processor. It was also important to meet monthly demand for the net book in peak hours. It was hard to predict the sales and demand; however, marketing campaign was capable of anticipating the trend in the market about the production. Warehouses were also established for that purpose. Conveyer belts in the warehouse were affective enough o process ten net books at a time.

Multiple persons were responsible to handle conveyer belt. Tasks were divided and Kaizen principle was implemented to develop the net books affectively. Demand was suddenly increased and it was extremely taking to produce large orders instantly. Ten to twelve hours shifts were not sustainable for such a level of demand. Assembly lines were also affected and it was extremely difficult to halt the production and to fix the problems. Moreover, there were pressures on company to improve gross margins and to earn revenues. There was extensive competition in the market to handle.

Problem statement:

Although the company has successfully developed net book, there are problems to meet the demand for production. Demand is expected to increase for 130,000 units. It was huge challenge to meet. The decision was needed to make whether there is need for another assembly line or working on current pattern. The issues were related to productivity of the operations. Productivity was short and demand was high. Lack of balance could affect gross margin and revenues for the company. There is need to find ways to reduce productivity gaps.

Quantitative analysis:

Quantitative analysis revealed that demand for notebook units were significantly high and with every passing quarter of the year; number of units being sold was increasing. There was demand of one million units for the third and fourth quarter for the year 2007. Demand increased and reached up to 1.5 million units to be sold. Increase in demand put the companies in pressure to produce large number of Notebooks to meet the demand.

Time period

No of units sold

2007 (Q3-Q4)

1

2008 (Q1)

1.5

2008 (Q2)

2.9

2008 (Q3)

4.6

2008 (Q4)

7.5

Table 1: Note book demand in units Figure 2: Graphical representation of Notebook

(Millions of units) demand (Millions of units)

Unit cost break down structure also provides interesting analysis. Processor and SSD ram have significant contribution in per unit cot. Both accounted for 50.40 and 67.20 respectively. Other components cost is 76.80 which is an accumulated per unit cost. Manufacturing overhead was comparatively as compare to other cost. It was accounted for 21.60. Overall cost of goods sold was 220. 8 per unit. Selling price was 240.00. It was sufficient to meet the cost of the units.

Components

Unit cost

Processor and ISB

50.4

SSD + Ram

67.2

Other components

76.8

Labor

4.8

Manufacturing overhead

21.6

Cost of goods sold

220.8

Gross profit

19.2

Selling price, FOB yantian

240

Case analysis on AIC Netbooks: Optimizing Product Assembly By Date AIC Netbooks: Optimizing Product Assembly To: From: Date: Subject: Case analysis Dear Xyz, The case: The case is about development of QuiN Netbook, which is designed to provide cheap and small size laptop in electronic market. The case analyzed different challenges faced by the company for the development of QuiN Notebook. It was necessary to develop motherboard immediately after the introduction of Intel processor. It was also important to meet monthly demand for the net book in peak hours. It was hard to predict the sales and demand; however, marketing campaign was capable of anticipating the trend in the market about the production. Warehouses were also established for that purpose. Conveyer belts in the warehouse were affective enough o process ten net books at a time. Multiple persons were responsible to handle conveyer belt. Tasks were divided and Kaizen principle was implemented to develop the net books affectively. Demand was suddenly increased and it was extremely taking to produce large orders instantly. Ten to twelve hours shifts were not sustainable for such a level of demand. Assembly lines were also affected and it was extremely difficult to halt the production and to fix the problems. Moreover, there were pressures on company to improve gross margins and to earn revenues. There was extensive competition in the market to handle. Problem statement: Although the company has successfully developed net book, there are problems to meet the demand for production. Demand is expected to increase for 130,000 units. It was huge challenge to meet. The decision was needed to make whether there is need for another assembly line or working on current pattern. The issues were related to productivity of the operations. Productivity was short and demand was high. Lack of balance could affect gross margin and revenues for the company. There is need to find ways to reduce productivity gaps. Quantitative analysis: Quantitative analysis revealed that demand for notebook units were significantly high and with every passing quarter of the year; number of units being sold was increasing. There was demand of one million units for the third and fourth quarter for the year 2007. Demand increased and reached up to 1.5 million units to be sold. Increase in demand put the companies in pressure to produce large number of Notebooks to meet the demand. Time period No of units sold 2007 (Q3-Q4) 1 2008 (Q1) 1.5 2008 (Q2) 2.9 2008 (Q3) 4.6 2008 (Q4) 7.5 Table 1: Note book demand in unitsFigure 2: Graphical representation of Notebook (Millions of units) demand (Millions of units) Unit cost break down structure also provides interesting analysis. Processor and SSD ram have significant contribution in per unit cot. Both accounted for 50.40 and 67.20 respectively. Other components cost is 76.80 which is an accumulated per unit cost. Manufacturing overhead was comparatively as compare to other cost. It was accounted for 21.60. Overall cost of goods sold was 220. 8 per unit. Selling price was 240.00. It was sufficient to meet the cost of the units. Components Unit cost Processor and ISB 50.4 SSD + Ram 67.2 Other components 76.8 Labor 4.8 manufacturing overhead 21.6 Cost of goods sold 220.8 Gross profit 19.2 Selling price, FOB yantian 240 Figure 3: Graphical representation of classification of per unit cost of various functionalities involved in manufacturing of Note- Book in the market. Table 1: Unit cost of components Qualitative analysis: Detailed analyses of the case, problem as well as quantitative analysis provide adequate information about recommended action plan to deal with the issues faced by the company. Keeping mind the required number of units and per unit cost, new assembly line and conveying belt is required. Installation of new assembly line as well as conveyer’s belt is a good option to increase the productivity and making pace with demand in the market. Demand is increasing and it is utmost important to keep pace with demand. Lack of meeting demand will lead towards shortage and customer dissatisfaction. Although company has affectively designed the product, it is also important to maintain desired production level. Therefore new assembly line as well as conveyer belt is recommended for the company to meet the demand of the customer. Therefore, it can be concluded that present analysis provides comprehensive details about issues and problems faced by the company to develop mini laptop with low cost. Installation of new assembly as well as conveyed belts was the main issue to meet the demand. Quantitative and qualitative analysis reveal that its is feasible to install both items in the company to meet the demand.

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