Importance of Operations Management for a Recycling Centre Corporation

Operations
Management

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
CAPACITY ANALYSIS AND BREAK-EVEN CALCULATIONS.............................................1
CUSTOMER MAPPING.................................................................................................................3
OPERATIONS ANALYSIS............................................................................................................6
STRATEGIC DIRECTION.............................................................................................................7
MANAGEMENT DECISIONS.......................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Operations management can be defined as the process of formulating strategies for the
purpose of managing future operational activities so that the business goals could be achieved
successfully. All the managers in the companies are responsible to make sure that they are able
to control, evaluate, monitor and assess the progress of business as it is required to assure success
of all the projects. While planning to make sure that the plans that are formulated for betterment
of entity will be able to result positively or negatively it is essential to pay attention towards the
concept of operations management (Babich and Hilary, 2020). It can help to analyse the key
factors that should be focused to attain success and ignore failure for the project. In other words,
it could be defined as the administration of such practices that can help to create highest level of
efficiency for the organisation. Main aim of this report is to understand the importance of it for
an entity which is planning to grow its business. This assignment is based upon the case of a
Recycling Centre Corporation. This project covers various topics such as capacity analysis and
calculation of break-even for the organisation, customer mapping for inbound and outbound
clients, operations analysis etc. Apart from this, Ansoff matrix for the purpose of identifying best
strategic directions along with management decisions is also covered in this assignment.
CAPACITY ANALYSIS AND BREAK-EVEN CALCULATIONS
Capacity of heavy-duty spreader in tons per week:
Capacity for one hour will be = 70 tons
Working time for one day is = 11 hours
Working days per week = 5 days
Capacity for one week = Capacity for one hour * total hours in a days * days in one week
= 70 * 11 * 5
= 3850
The capacity of the asset for one week will be 350 ton per week.
The annual production costs of the heavy-duty spreader:
Fixed production cost = 16 per ton
Variable costs:
Employee wages and fright costs = 27per ton
Material cost = 260 per ton
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Capacity for on year = Capacity for one week * total weeks in the year
= 3850 * 52
= 200200
The calculation of production cost is as follows:
Particulars Amount
Fixed cost (200200 * 16) 3203200
Variable costs:
Employee wages and fright costs (200200 *
27)
5405400
Material cost (200200 * 260) 52052000
Total production cost 57780600
The annual profit and loss from the asset:
Total cost = 57780600
Selling price = 370 per ton
Total selling price = Total annual capacity * selling price
= 200200 * 370
= 74074000
Profit or loss = Total sales – total cost
= 74074000 – 57780600
= 16293400 (Profit)
Total profit from the asset will be 16293400 hence it will be profitable for the enterprise.
Calculation of BEP
Formula = Fixed cost / PV ratio
= 3203200 / 22.43%
= 14280874
The BEP sales for the entity will be 14280874.
PV ratio = Contribution / sales * 100
= 370 – (260 + 27) / 370 * 100
= 83 / 370 * 100
= 22.43%
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