Polar Sports.Inc Case Study Help
Which factors should Mr. Weir consider in deciding whether to adopt level production?
The company is highly concerned regarding its increased product manufacturing cost. In the seasonal time frame, i.e. from January till September; the cost of goods sold and operating expenses for the products manufactured are very high. Johnson’s proposal of level production will help the company in reducing these costs. This is also a concern for almost all the commercial organizations,in terms of economic issues thatneed to be dealt with,by taking strategic and cost-effective decisions. These challenges become threats for the company as investors demand timely action by the company for reliability and assurance or confidence for the company to remain competitive.
In the case, Mr. Weir identified factors that affect the decision of technological adoption for the desired production level.The first concern for the level of production is the costs associated with the production level as it grows. The second major factor in hiring and training costs is associated with the new employees who are hired to attain the desired level of production. These costs are major factors and the company needs to minimize the costs so that the business profitswouldn’t get affected, adversely. (Kester, 2012)
The third concern associated with the level of production is the decision itself, as it can affect the social, economical and environmentalsustainability. Therefore, these factors must be considered to improve the sustainability. Lastly, there is a presence of factors that areassociated with the internal organizational culture that needs to be changed for the implementation of the desired production level. Therefore, these factors must be considered to prevent any discouragement in the organization’senvironment, especially the interests of employees.
What are the total savings from adopting level production?
If a company adopts a level of production then there would be many costs which wouldn’t be generated. Costs associated with the level of production are overtime premium,and maintenance costs of $480,000 and hiring and training of new employees costs of $ 600,000, which totals tothe cost of $ 1,080,000. This one million and eighty thousand is cost that tends to incurrwithout adopting the level production techniques.(See Appendix-2)……………………….
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