ASG 2 - TO Directors of Sales CC CEO Subject Business...

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TO: Directors of Sales CC: CEO Subject: Business Process Change After numerous experiments, warehouse department already came up with case five to maximize profit on revenue by cutting costs in the packaging and inspection process in order to allocate freeing resources to higher value-added activities. Let’s start from case one, the basic model takes average 6.053 hours to complete one cycle from taking order to packaging. There are two type of packaging – cardboard, being 70% selected, or wooden, being 30% selected. The average working duration is 0.238 hours, and it costs average 3.979 dollars. In case two, as more customers require use of cardboard packaging, we assume demand of cardboard correspondingly increases to 80%. In other words, demand of wooden crate goes down to 20%. Compared to case one, with all the other factors keep constant, the average cycle duration decreases by 0.018 hours to 6.035 hours; average working duration decreases by 0.026 hours to 0.212 hours, and average total costs decreases by 0.329 dollars to 2.65 dollars. Thus,
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This note was uploaded on 11/11/2011 for the course ITM 309 taught by Professor Rodammer during the Fall '08 term at Michigan State University.

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ASG 2 - TO Directors of Sales CC CEO Subject Business...

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