BACKGROUND INFORMATIONFor this milestone, the goal is to allow you to continue your analysis form Milestone One (attached) (the answers highlighted are the right ones) and forecast various operational

M3A2: Milestone One

MILESTONE ONE

Operation Management

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Xxxxx xxxxx

Xxxxx xxxxxx xxxx xxxx – Summer I – 8 week 2020

Introduction

This assignment is our first milestone and is for us to focus and analyze different operational data from the the Phone4U manufacturing plant and use the results of our analysis to make a decision on which phone to produce and justify that decision with our review analysis.

Business case analysis is a tool used to evaluate potential business decisions used when project managers and other frontline employees need to convince stakeholders for their support (Athial, 2017). It serves the basic purpose of a business decision or action. A business case analysis answers three questions that is;

• What is the cost of decision making?

• What is the risk of making the decision?

• What are the expected benefits of making the decision?

If the decisions significantly outweigh the costs and the risks, then the decision should be made.

Process Flow Map Analysis

Process mapping is used to promote efficiency, reduce redundancy and maximize on production (Damelio, 2011). Process flow map would be made better if there were minimal delays, reduced production, assembly time and minimum delays. Merger step in the line have standard or custom cases broken down and done simultaneously.

Step 3 step 4 step 5

Set up custom and standard cases simultaneously.

In the process step 6, most customers dislike delays. Reduction in delivery time by maximizing on production would result in a good appeal to the market. Steps 1 and 2 reduces the time taken for decision point making.

Value curve information as used enables the firm (Phone 4 u) to assess their services against their competitors (their four intended phone brands). Four phones (A-D) are compared based on their parameters. The biggest selling point/ appeal to most phones is their cost and key features. Phones with great features sold at an affordable price would attract many customers hence more purchases. Phone A had the second highest scores on average based on parameters (40/70), but offered the best range on affordability. Phone D with the highest parameter score (49/60) but performed dismally on affordability. Phone A and B offer good services and features on affordable costs.

Raw Data Year 1 Analysis.

Months between August-December had the highest orders placed. September, November and December are the most popular months. Phone D was the most selected with estimated (46/200) orders placed equating to 23%.

These are some of the longest lasting order decisions making processes for demand. Reduction of such decision-making time will help maximize production. The time taken lasted longer from the initial phase, construction phase.

Step 1 average time 7.08 hrs.

Step 2 average time 5.57 days.

Average delay time is 1.58 days

This time should be minimized, not many orders should be placed on the waiting.

Phone to Make

In the smart phone market, the law of instrument and cognitive bias pushes consumers purchases to what is familiar. Assuming the following;

• For all multi-plants, each plant is identical in all aspects.

• Capital labor ratio is variable

• Cognitive bias/rational consumer decision making

• All materials are available and present

Value curve analysis, purchase intent correlation will help Phone 4u come up with the perfect mobile device purchase intent of every device may undergo changes under influence of price or perceived quality of value. Value curve analysis meanwhile will help demonstrate value creation in a product. Value curve shows on Phone 4u some of their key selling points on x scale against their range on y scale that is affordability, cost, speed and durability.

Consumers are naturally rational, biased and very careful with their money usage. Majority of them will try as much as possible to get the best quality of a product at the cheapest rate available. Thus, the question which of the four available phone brands offers consumers value for their money. Which of the phones has good quality features and is affordable to the consumer? Additionally, the consideration is on production cost. Which phone has the least production cost. Finally, its necessary to consider which of the phones would attract and retain a wide range of customers. Answering these questions would be very vital for Phone 4u.

The phone company should focus on making phone type D. Although Phone type D scores low on availability, it ranks high on other specifications like color, aesthetic value, good quality, good speed, and durability. Indeed, cheap is expensive (Phone Brand A) although affordable offers very average poor features scoring low on durability and quality. With Phone brand D the company compensates quality with price. At a relatively higher price, the company offers quality phone with good features something that would attract the normal customer.

Economically, producing 1000 units of Phone D retailing at $500 each would fetch more revenue returns as compared to producing 3000 units of Phone A retailing at $150 each. Phone D therefore captures all the market dynamics on production costs, sales and profit returns. It utilizes the concept of quality over quantity. Average features in other brands for average prices will not retain customers for long. With its features, Phone D will easily attract and retain customers.

Phone D has the ability of creating the (Samsung or iPhone) buzz amongst consumers. In this case, high prices will not discourage customers from purchasing the brand since they obtain value for their money. Brand D utilizes value for money to market itself as reliable, durable, high quality and fast. Hence, my suggestion is that they should manufacture phone D.

References

Aithal, P. S. (2017). An Effective Method of Developing Business Case Studies based on Company Analysis. International Journal of Engineering Research and Modern Education (IJERME), ISSN (Online), 2455-4200.

Damelio, R. (2011). The basics of process mapping. CRC Press.