Operations Management: Capacity Analysis, Customer Mapping, and Operations Analysis

Operations Management
B21365

Table of Contents
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 supervising, organising and
planning to make improvements and enhance profitability of the entity (Operations
management, 2019). 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 learn from it.
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
Capacity for one year = Capacity for one week * total weeks in the year

= 3850 * 52 = 200200
Waste for the year = 20%
Actual capacity for the year = Capacity for the year - waste
= 200200 – 20%
= 200200 – 40040
= 160160
The calculation of production cost is as follows:
Particulars Amount
Fixed cost (160160 * 16) 2562560
Variable costs:
Employee wages and fright costs (160160
* 27)
4324320
Material cost (160160 * 260) 41641600
Total production cost 48528480
The annual profit and loss from the asset:
Total cost = 48528480
Selling price = 370 per ton
Total selling price = Total annual capacity * selling price
= 160160 * 370
= 59259200
Profit or loss = Total sales – total cost
= 59259200 – 48528480
= 10730720 (Profit)
Total profit from the asset will be 10730720 hence it will be profitable for the enterprise.
Calculation of BEP
Formula = Fixed cost / PV ratio
= 2562560 / 22.43%
= 574782
The BEP sales for the entity will be 574782.
PV ratio = Contribution / sales * 100
= 370 – (260 + 27) / 370 * 100
= 22.43%