HCC Management Team Bargaining Information
Your team represents HCC management in bargaining sessions with the UCPW Local 14. The team is expected to negotiate an agreement that will allow the company to achieve its strategic goals over the next three years. Your team will use the following items to formulate its initial demands and for negotiating a new collective bargaining agreement:
Item 1. Strategic Goals and Forecast of Factors Affecting the Firm’s Competitive Position
Strategic Goals Year 1 Year 2 Year 3 Incentive
Materials cost reduction 2% 3% 4% 4%
Labor cost reduction 4% 4% 5% 5%
Current Ratio 2.25 2.5 2.75 2%
Quick Ratio 1.0 1.2 1.5 3%
Inventory turnover 5.0 5.5 5.75 3%
Collection period 40 35 30 3%
Forecast
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Item 3. Strikes, Lockouts, Unfair Labor Practices
Management may elect to lockout labor at any time if it believes that no reasonable progress has been made in negotiations. Work stoppages will severely damage HCC customer relationships and its valued reputation as a firm dedicated to the prompt delivery of quality products. For each strike, lock-out, or sustained unfair labor practice charge related to management bargaining practices, the gross sales percentage change for all future years will be reduced by 1% and material costs will rise by an additional 1% per year.
Item 4. Facilities Upgrade and Production Manning
In order to meet customer demands for higher product quality, to comply with federally-mandated environmental regulations, and to reduce production costs, HCC must spend $2,000,000 within the next three years to upgrade equipment. The upgrade is expected to result in production efficiencies that will lower material and labor costs by reducing defective products, process waste, in-process inventory, and production man-hours through simplified work processes. It has been over a decade since significant modifications were made to the production facilities. Those changes were mostly technical in nature and did not substantially alter work processes or reduce overall employment. The average productivity gain in the industry for the past five years has been 3% per year. Financing for the loan to purchase the equipment
found out that despite this cost reduction in material cost, the costs of producing the low -end units for
The wages of general production employees who are idled due to machine breakdown are classified as indirect costs. Direct costs are usually variable and change as production volumes change. Thus, direct materials and direct labor are typically variable costs. For special orders, some direct costs can be fixed, however. The costs (depreciation, electricity, and routine maintenance) associated with a machine dedicated to one product are direct costs of that product. Indirect costs cannot be easily and conveniently assigned to a special order. Rather, these costs are common costs, in that they are incurred to produce a variety of special orders. Maintenance costs of general purpose equipment, the supervisor’s salary, and utilities are direct costs needed to produce special orders in general, but are indirect costs for a particular special order. Moreover, general production costs, including property taxes, insurance, lawn care, cafeteria costs, and miscellaneous supplies consumed in production are indirect costs properly allocated to special orders manufactured.
Albatross Anchors is a small family owned business that began in 1976. The company has grown exponentially over the years with more than one hundred and thirty employees. As the company grew, their operational issues in the production and administrative area grew as well. The organization has been faced with a lack of updated technology, out dated equipment, an inefficient layout which violates the U.S. safety and environmental standards, and a disorganized administration office. Therefore, production is not running smoothly,
1.1 By December, 2017 HCWC will have a plan to start construction for shelter expansion.
The sales department feels very good about the prospects for 2006. The reputation of the
To better prepare the chief human resources officer for entering the arena of negotiation coaching recommendations for executive leadership. Prior to the negotiation the (CHRO) would require that all transactions are represented through a negotiation. This strategy for trade is rehashed and every now and again goes unnoticed. In the event that the mediation is at your demand, furthermore, you will wish to hold oversee beyond what many would consider possible to begin the degree for achieving an agreement.
First, the materials efficiency variance was noted as unfavorable because 1,000 more units were used than budgeted. Since materials efficiency variances result from a variety of causes, including materials quality, spoilage, training, and equipment (Benge, n.d.). The next area to investigate are the labor variances which showed the cost, while favorable, was a difference of $1.00 per hour. Further, the efficiency was unfavorable, indicating that production required an additional 3,000 hours over budget, which could be the result of staff training, faulty equipment, or low-quality materials (Direct labor efficiency variance - explanation, formula, example, reasons. 2016). Since there appears to be a lower cost of labor than anticipated, but higher materials and hourly utilization rate, it is possible that new lower cost staff were hired resulting in slower production rates and elevated materials utilization. As such, the production manager should be consulted to investigate the cause of these variances and to put proper corrective actions into place (Miller-Nobles et al.,
Technology is changing the way healthcare is delivered. Palms West Hospital and all of HCA hospitals are making every effort to exceed patient’s expectations with a variety of technology and different information systems. Some of the services offered by HCA East Florida Hospitals include Patient Portal, which gives instant access to patient’s health information. This service is accessible 24/7 and lets patient’s lab/radiology reports, medication instructions, discharge summaries, automatic bill pay, health libraries, registering for classes and even upcoming patient appointments with HCA affiliated physician offices. JFK Hospital offers both Cyber Knife for tumors and Robotic Surgery for Urology, Gynecology, and General Surgery.
The solution to the problem in this case is to develop a strategic plan that will modify the employee behavior, redefine the roles and responsibilities of management, and manage the organizational culture while reducing production costs and gaining a competitive advantage. The solution will require management to examine and modify the current leadership style. In addition, management should address the issue of valence within the motivation equation and establish well-defined goals that will enhance the employee’s perception of their role within the organization. Reformation to the overall morale and culture is critical in order to terminate the work stoppage, reduce costs, and get the shipments back on schedule.
Do to the size and nature of HCA company complexity and immense information system, it’s vital for HCA to have an operating system that will enable them to operate efficiently and effectively. HCA’s current information system has several strengths but also has several weaknesses and noticeable areas of needed improvement.
PSCo Workforce Relations will meet with the Union related to their concerns over the Company’s test for external hires and the Study Guide that was created in the System Operations Division. The parties have reached an agreement to meet and discuss with the Company having the final decision making authority if the parties can’t
Based on our performance for the past 12 months, Woodhaven has accumulated unfavorable labor and overhead variances of approximately $2.5 million. It is necessary to take steps to reflect these unfavorable results in the inventory cost. As a result, the overhead rates in M2M will be revised as outlined below and detailed in the attached schedule. The new rates will be incorporated into the revised standard costs which will be rolled out during the last week of December. With a general increase in overhead rates, it is expected the net results of this process will increase inventory and should provide a small income increase in December. This impact is expected to be offset by a decrease in certain raw material cost from last year’s
The initial results revealed that in order to reduce the production costs they needed to work with the customers to change some of the previous behaviors that increased the production costs. These changes included ordering behavior as well as reducing the demand for customized products. The data obtained also revealed that prior decisions could also affect the full implementation of the system. In this case, prior commitments did not allow the company to take the necessary steps to completely reduce the costs as suggested by data obtained from the
The next step in the process of this case would be to review all of your possible alternative to your stronger possibilities using common, defined evaluation criteria. This would involve reviewing the planning process for each of the alternatives- examples would be if it; is cost efficient, what would be the timeline for the alternative, what are the goals and objective for the improvement. Using the evaluation criteria we look first at changing some of the products offered and now offering for replicas as options to consumers, this is a time and money consuming option to Fe’nix but could provide long term benefits. Things that will be needed is a factory, machinery, more employees, raw materials, and more. This could end up being a money trap if not operated properly. As for figures on what kind of increase this would cost them there are no income statements or other financial information about Fe’nix available. I do believe establishing a budget to help control any spending if they do go down this road will be
We are still losing money after the second year. However, my group realized that new tooling was an important cost. Therefore, we start thinking how to reduce it. We find out that if the demand stays between 300,000 to 345,000 units, the supplier will not need new tools. Then, it will bring the cost of new tooling to 0 for the coming years. Let’s take the worst case scenario and try to compute the savings for year 3, if the pistons are outsourced.