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solution

Bradtech Limited is a medium-sized subsidiary of a large UK manufacturing company, making a number

of specialist components which are sold to other UK companies and incorporated into their products.

Although there is some internal trade, most sales are made to external customers by a dedicated sales

force. However, substantial amounts of raw materials are bought from other group companies and,

although these are generally of adequate quality, there have been problems with meeting delivery

dates. The company believes it needs to develop new products as a matter of urgency to compensate

for the likely decline in its traditional business, and has had some success in one such venture over the

past three years.

Its main factory currently has two major product ranges. The first is a long-standing product which is a

clear market leader, having over 40% market share in the UK. The remainder of the market is highly

fragmented and Bradtech’s dominance of the sector is maintained by a combination of product quality

(i.e. reliability and ease of use), timely delivery from stock, and good technical advice. Unfortunately,

the final products in which Bradtech’s components are incorporated are subject to a slow but steady

decline, and it is anticipated that the total market will shrink by 5-10% a year over the next five years.

The second product range is relatively new and fast-growing, although it currently accounts for just

12% of overall sales. There are several competitors in the market place, although these are mainly

small firms, and Bradtech is seeking to gain the same leading position as it has established with its

major product range. However, these new products cannot be made to stock as each customer

demands a specific and changing specification. Customers tend not to be loyal to single suppliers

(although quality is an important criterion), but shop around and play potential suppliers off against

each other to gain a price advantage.

Both products use the same production facilities and both make use of one particular production

process which is currently working at 90% of its normal (12 hour) capacity, although this could be

augmented by full two shifts or even 24 hour working. Provision of additional capacity would require

major capital expenditure which would be difficult to have authorised as the holding company is short

of cash and is applying stringent controls over new capital investment. The factory is well located for

distribution throughout the UK, in an area of high unemployment. Bradtech pays good basic wages for

the locality; in addition, there is a tradition of paying premium rates for working hours outside of 8am to

6pm. The factory is located near a residential area and receives a number of complaints about noise,

especially when it works during evenings.

Required

(a) What do you consider are the key factors that Bradtech should pay attention to over the next

12 months?

(b) Develop a balanced set of performance measures for the company; for each measure you

choose, specify exactly what should be measured, how the necessary information should be

collected, and how frequently the outcome will be reported.

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