Industry and Competitive Analysis HBS Case Study: Du Pont 's Titanium Dioxide Business(A)
Group 4
Du Pont Titanium is the leading manufacturer of titanium dioxide, serving customers in the coating, paper and plastic industries. The company operates many plants and all of which use chloride manufacturing process. Three factors related to production will settle the cost advantage of titanium dioxide manufacturing. They are Economic of Scale, Capacity Utilization Rate and Experience Curve Effects. Economic of Scale : Total Output / Plants Numbers Capacity Utilization Rate : Total Output / Total Capacity Experience Curve Effects : Cumulative Output (production) Each of these factors in the production process has positive but decreasing
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2 1963 1964 1965 1966 1967 1968 1969 1970 Output 112 124 116 101 125 134 149 168 177 178 189 192 186 202 208 204 Plants 3 3 3 3 4 4 4 4 4 4 5 5 5 4 4 4 ln WAC 1.098612289 1.098612289 1.098612289 1.098612289 1.386294361 1.386294361 1.386294361 1.386294361 1.386294361 1.386294361 1.609437912 1.609437912 1.609437912 1.386294361 1.386294361 1.386294361
< ln Capacity Utilization Rate >
Capacity Utilization Rate= Output / Capacity, and then perform logarithm Year 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 Output 112 124 116 101 125 134 149 168 177 178 189 192 186 202 208 204 Capacity Capacity Utilization Rate 111 129 129 129 174 179 179 179 190 204 244 244 244 204 220 235 1.009009009 0.96124031 0.899224806 0.782945736 0.718390805 0.748603352 0.832402235 0.938547486 0.931578947 0.87254902 0.774590164 0.786885246 0.762295082 0.990196078 0.945454545 0.868085106 ln Capacity Utilization Rate 0.00896867 -0.039530839 -0.106222213 -0.244691888 -0.330741562 -0.289546006 -0.1834395 -0.063421826 -0.07087434 -0.136336444 -0.25542121 -0.239672853 -0.271421552 -0.009852296 -0.056089467 -0.14146552
Industry and Competitive Analysis HBS Case Study: Du Pont 's Titanium Dioxide Business(A)
Group 4
Industry and Competitive Analysis
HBS Case Study: Du Pont 's Titanium Dioxide Business(A) Group 4
GMBA 農經四 生傳三 經濟四 國企一
ZAKA TOTO 彭韻潔 吳秉霖 林映辰
The budget analysis shows that the labor hours of the firm are higher than the budgeted amount. As such, the firm needs to evaluate the cost benefit analysis of making or buying their products. To make this decision, various factors need to be considered. Before making the decision, Peyton needs to evaluate the marginal costs and revenue of making versus buying the products. The firm should take the option which provides the highest marginal profit which is the
Excel OM/QM Learning Curve tool was used to complete this analysis. This tool was selected because of the strategic importance of the learning curve. The learning curve is applied to aid in the formulation of strategic decisions about employment levels, capacity, costs, and pricing. This tool showed that with the learning curve applied how production hours would be affected if the batches increased. This allows the company to understand what their costs associated to labor is and also if they will be able to meet
This paper will provide an analysis of 2 production scenarios. We will calculate costs associated with running a production facility. Furthermore, the analysis will be used to provide a basic understanding of how changes in staffing and productivity impact profit and loss.
Martinez Company’s relevant range of Production is 7,500 to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows:
N.A.A.C.P- established in 1909. Du Bois filled in as the persuasive chief of distributions for the NAACP from its origin until 1933. As the supervisor of the diary The Crisis, Du Bois had a stage to express his perspectives on an assortment of issues confronting African Americans in the later Progressive Era, and in addition amid World
3. Assume that the selling prices, volumes, and material costs for the 1991 model year will not change for fuel tanks and doors produced by the ACF of Bridgeton Industries. Assume also that if manifolds are produced, their selling prices, volume, and material costs will not change either.
Data indicates that Model C210 has a higher contribution margin per unit of the constraint. Therefore it is recommended that until the constraints in coating and sharpening are removed, production should concentrate its limited resources on production of the more profitable model. The Model C210 contributes $1250 per hour compared to $537.50 per hour given the constraint in the coating and sharpening stage.
However, as a new member with a new product, electronic product in North American market, the reputation is also an important attribute. Especially, quick delivery time is a key attribute for this company, due to the demand of quick delivery in all markets. Moreover, the manufacturing process of the new product, electronic product, on which our company will definitely focus, has a lot demands. Such as, technology, innovation and quick delivery time even the ability to make the product be the first one appearing in the market (other company, which is developing the same product, may become our competitive opponents). Especially, technology is predicted to play the most important role in the manufacturing process. On the other hand, the traditional cost system has a lot of limitations. Traditional costing system focuses on the cost reduction and the efficiency, particular the products with relatively few standardized components; Clifton, however, produces a wide range of airplane components. In addition, nonfinancial aspects of
Using this growth rate we calculated a terminal value of $6782.88 and a PV(terminal value) of $4698.39:
production and sales of Product A is 2,000 units and of Product B is 3,000 units. There are three activity cost
1. Use the Overhead Cost Activity Analysis in Exhibit 5 and other data on manufacturing
* Level of Production (Ton/year): Assumed the data provided in the case for a new pulp mill.
This method did not account for any specific cost arising from the complexity, diversity or other production related specifics of the product line. In contrary, the time-driven ABC approach does account for all the nuances of each product line. From the table can also be inferred that the practical capacity is not totally used since at the end there is a total of $28,288 of unused resources. Table 3 summarizes the capacity utilization of various resources.
Since material cost is one of the key cost drivers for the production of the units, it is best to take
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 activities