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Project on Industry of Medical Devices
4 Pages1262 Words265 Views
Added on 2019-10-18
Project on Industry of Medical Devices
Added on 2019-10-18
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Background of ProjectThe industry of medical devices involves a number of monitoring and reconstructive devices. Some of those devices include cardiac and diabetic care as well as hip and knee replacements. The owners of a medical device manufacturing firm called “JointsOrtho” have recently reviewed information about the expected growth of the aging population in the United States. Every day 10,000 Americans are turning age 65 every the population of older adults is expected to reach 89 million people by the year 2050. This figure is more than double the number of older adults in the United States in 2010. Orthopedic medical devices are one of the fastest growing areas in medical device manufacturing. The owners of JointsOrtho or JO, manufacture full hip and knee replacements and would like to have your firm set up a financial plan for opening a new manufacturing plant that makes medical devices often used for Orthopedics. Specifically you will set up a plant that manufactures Full Hip Replacements in Delaware. Each Full Hip Replacement will be sold throughout the United States at a cost of $36,750 each, including shipping, etc. Sales are expected to be between 1,000 and 1,200 hips per month. This figure is above what theyare already producing in their first plant. Depreciation for equipment should be set to 10 years. Beyond the information provided you are unable to get any further guidance from the owners or the Financial Department at the other warehouse location. Remember, you are setting up a project proposal and sending your recommendations to the owners of JointsOrtho. You will be presenting it to them in teleconference. You may wish to do the written portion of the assignmentin a Word Document or PowerPoint. If you use PowerPoint be sure to use the notes section to write out detailed information. A reference sheet/page is required for either format you select. The Financial Statements can be included in the same document or submitted separatelyYou will need to provide information to the owners of JointsOrtho that includes what it will cost to open a facility and hire workers and determine if the facility will breakeven within the first 12 months. You will be hiring a total of 3 shift supervisors and a total of 45 employees (including shift supervisors) to do various manufacturing of the hips, clean up, shipping, etc. The 45 workers willbe paid as follows:15 of the workers will be paid at the rate of $18/hour for 40 hours per week (molding specialists)10 of the workers will be paid at the rate of $16/hour for 40 hours per week (machining specialists)5 of the workers will be paid at the rate of $13/hour for 40 hours per week (cleaning and maintenance) 10 of the workers will be paid at the rate of $17/hour for 40 hours per week (shipping and receiving)3 shift supervisors will be paid at the rate of $20/hour for 40 hours per week1 plant manager will be paid a salary of $6,000 per month1 administrative/human resources person at the rate of $15/hour for 40 hours per week
This project includes both Financial Statements and Writing.Use the grading rubric to help guide your work! Discuss and critically analyze whether this is a good expansion. Make recommendations and submit an Executive Summary along with the full report.Discuss and critically analyze if the need exists from your research to open an additional facility to produce knee replacements.Critically evaluate the next steps the company should make with regards to expansion. Should the company open the expansion? Sections to include in your response: Purpose Statement: A purpose statement helps tell your reader what to expect but it also keeps you on track. I compare the purpose statement to typing in the address on your GPS or writing down the address of your destination. Executive Summary: One page written to the owners of JointsOrtho explaining your findings on opening the new warehouse Written Components: Written document with critical analysis of the Risk/Return and Time Value of Money, Three Project Risk types, etc., Explain fixed and variable costs as they pertain to this type of business. Financial Statements: At a minimum to include an Income Statement, Cash Flow Statement and Balance Sheet. There will be several transactions provided that students will update within their Financial Statements, however student teams may wish to expand upon their statements andinclude a summary of additional transactions, etc. that they included.Break Even Analysis: Will opening this plant Break Even within the first year? Conclusions: Provide a critical analysis of the financial statements and written components of the paper.References: Support all decisions with literatureYou will be provided with some transactions for the purpose of getting you started with what to include, but you are expected to come up with and support additional transactions. For instance you decide to hire an additional manager. You will need to put this information into the FinancialStatement in the correct area. Transactions: The following are a few transactions to get your group going on the Financial Statements. You may wish to include others. These are hypothetical as you are just trying to decide if the JointsOrtho Company should open a new facility. The numbers are based on a site the company is interested in buying and the information from when the first manufacturing plant opened. Transaction 1: Borrow $6,000,000.00 for building with 10 year mortgage at 10% annumTransaction 2: Pay your salary of $6,000/monthTransaction 3: Pay for building: Set up what will be office space, manufacturing space and warehouse space. Set a depreciation scheduleTransaction 4: Hire managers & Workers. Pay salaries and fringe benefits and taxes
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