1. Next Big Q
How good are you in making your goods…

2. 4th Deliverable

4. Buy or sell capacity of product lines
Schedule production for each line
Buy or sell capacity of product lines
Purchase machinery to automate our facilities
Establish your workforce complement

6. Current
Ideal

7. Right-Sizing Capacity:
FAIR SHARE ESTIMATES: 3-4 Rnds out:

8. A Historical Consideration… RE: Projected Share
LOW END: 0-1 product killed repositioned or introduced
TRADITIONAL: 3-6 repositioned from High…0-1 killed…1-2 introduced
SIZE: 0-1 killed, 0-1 repositioned to Traditional, 1-2 introduced
PERFORMANCE: 1-2 killed, 0-1 repositioned to Traditional, 0-1 introduced
HIGH: 1-3 killed or repositioned to Traditional, 1-3 new products arrive in rounds 2 or 3

9. Round 3- Forecast Segment Competitive Density
LOW END: 6 products=rivalry unchanged
TRADITIONAL: 9 products, w/ 3 repositioned= increased competition
SIZE: 7 products, w/ 2 new= increased competition
PERFORMANCE: 4 products, w/ 1 new= reduced competition
HIGH: 6 products, w/ 2 new= increased competition 6 4 9 6 7

10. -Given Round 3 Scenario- How should adjust your production capacities?
Round 0-1st shift Capacity
Round 3-Unit Demand
Traditional
1800
1068
Low End
1400
2081
High End
900
668
Performance
600
823
Size
469

11. Optimum Automation Levels?
Current
Ideal

12. Use of 2nd Shift?
Current
Ideal

13. Should You Run 2nd shift –when Labor Costs 50% higher?
Will we make less because labor costs are 50% higher for 2nd shift?
Another Q: If we double sales will we double our net margin?
Answer by using your proformas:
1- On production spreadsheet build 1200 units
2-On Marketing display- FORECAST 1200 UNITS
3.-ON Proforma Income statement- note NET MARGIN –
4- On production spreadsheet build 2400 units
5-On Marketing display- FORECAST 2400 UNITS
6.-ON Proforma Income statement- note NET MARGIN –

15. 2nd shift gets a free ride-only has to pay labor premium…
The Big Answer
1st shift- covers all fixed costs-
2nd shift gets a free ride-only has to pay labor premium…

16. Can I be excused my brain is full..