What is the productivity of the processing facility

Assignment Help Business Management
Reference no: EM131010787

Norwegian Salmon Processing Facility, Trondheim

NorSal Trondheim operates a salmon processing facility where fish are purchased from local sources along the North Sea, processed at the facility, and sold to customers for distribution. The plant manager, Inger Hansen, is contemplating a plant modernization to upgrade the technology in the plant. While the plant performs well enough now, modernizing equipment would allow the plant to increase capacity per hour, which is particularly advantageous because the factory has enough demand to cover the additional capacity. Currently, the plant operates five days a week, in two shifts of 30 workers per shift. The workers are paid $10 per hour. Adding a third shift is not possible because the plant is cleaned during the third shift.

The firm is contemplating a plant modernization to upgrade existing equipment, which should increase the plant's output while lowering energy costs. Using the current equipment, around 1,500 pounds of salmon can be processed each hour, while the new plant would be able to process 2000, pounds per hour. The updated equipment is made by the same manufacturer as the existing equipment, and the production personnel feel that they will be able to learn to use the new equipment quickly. For this reason, costs to train personnel are assumed to be negligible. The production manager, Bjorn Pedersen, is skeptical about undergoing the plant modernization, The older equipment, he argues, is already paid for, and new equipment would cost $10,000 per week, This cost is comprised of both principal and interest, and includes manufacturer installation of the equipment The controller, Maret Karlsen, cautions that all decisions related to costs should be included in the analysis and that because the energy consumption would be different, this must also be accounted for in the decision. Energy costs are presently $10 per unit, and the existing plant uses 1,000 units of energy per week. With the modernized plant, the consumption of energy would fall by 50%.

Discussion Questions

1. What is the productivity of the processing facility, with the equipment currently in use?

2. What would the productivity of the plant become if the new system were purchased and implemented?

3. What would be the amount of additional expense on equipment that would make productivity of the two systems equal?

4. What might happen if energy costs increase in the future?

Reference no: EM131010787

Need to a problem based on profit maximization

A clothing manufacturer produces clothing in five locations in the U.S. In a move to vertical integration, the company is planning a new fabric production plant which will sup

Explain good leadership qualities for task completion

Good leadership qualities by putting the requirement for task completion before all else? How else could supervisor have reacted? How does this attitude influence team perfo

Celebrity endorsements of bud best

Celebrity endorsement. L&LAdvertising just signed a contract with movie star Lance Willard for celebrity endorsements of Bud's Best bacon. The president of the firm assign

Determine the order-winning and qualifying criteria

1. Determine the order-winning and qualifying criteria for the product. 2. Select the store chains that would sell the products. 3. Determine the total number of units sold pe

Internal forces and trends considerations

Create a SWOT table summarizing your findings. Your environmental analysis should consider, at a minimum, the following factors. For each factor, identify the one primary st

Standard format for preparing assignment

A well known automobile company is facing crisis. It came to know poor decision making was the reason of that problem. You are appointed as a manger of the company, how you

Economic effects for countries

Evaluate the likely economic effects for countries, such as Poland and Russia, that have transformed their economies away from the command economy system towards a market ec

Marketing plan worksheets notes

These worksheets will assist you in writing a formal marketing plan. Worksheets are a useful planning tool because they help to ensure that important information is not omit


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd