Explain how this affects your pricing options

Assignment Help Operation Management

Reference no: EM132179810

Assume you manage an auto repair shop that earns $750,000 per year in revenues, generating $150,000 per year of profits on overall operating costs of $600,000. Assume your COPQ is 20% of overall operating costs.

What factors or activities may contribute to the COPQ at an auto repair shop?

You and your mechanics have identified projects costing $25,000 (equipment, tools, training) that would likely cut in half the COPQ. What would be your new overall operating costs? What would be your new profit? Explain your reasoning for both answers.

Should you spend the money on these projects? Explain. How much would you be willing to spend on one-time projects intended to cut the cost-of-poor-quality by half for the foreseeable future?

Assume you decided to fund the projects mentioned in Question 3 above but the costs were only reduced by 25%, not by half. Was it still worthwhile? Explain. Remember, you only incur the costs one time but you reap the savings for several years.

Assume the projects were completely successful, cutting the COPQ in half. Explain how this affects your pricing options.

Reference no: EM132179810

Questions Cloud

Explain one significant influence the family of origin has : Explain one significant influence the family of origin has when responding to the challenge you chose and the reasons you think the family of origin has.

Institution becoming viable model for making societal change : What could lead to Greenleaf’s theology of institutions becoming a viable model for making societal change? What stands in the way of this idea being achievable

Operational information and intelligence that can be fuzzy : There is a distinction, or boundary, between operational information and intelligence that can be fuzzy.

Define importance of having a highly-developed staff : Provide a slide with an overview on the importance of having a highly-developed staff of HR business partners. Be clear with your position.

Explain how this affects your pricing options : Assume the projects were completely successful, cutting the COPQ in half. Explain how this affects your pricing options.

Calculate the number of points on option two : Calculate the number of points on option two that would equalize the effective costs of the two loans over a five-year holding period

Layout of the organization and how it manages bottlenecks : Describe the service provided. Discuss the layout of the organization and how it manages bottlenecks.

How are individuals are to be trained and developed : In human resource management, how are individuals are to be trained and developed in the company?

Conglomerate into world-leading mobile phone producer : Based in Finland, Nokia transformed from being a diverse conglomerate into a world-leading mobile phone producer in the 1990s.

User Account

All Pages