Case:
Omni Graphics is a small manufacturer of electronic harvest-festivals for example in artistic creation computers. The company has succeeded by being really innovative in product design. As a byproduct of a large electronics manufacturer (ElecTech), Omni wariness has a throne of experience in both marketing and manufacturing in the electronics industry. A long list of equity investors is betting that the firm pull up stakes really take off due to the growth of vary graphics software and the increased demand for computers with enhanced graphics capability. However, a material body of market analysts say the market for the firms products is or so risky--as it is for many high-tech start-ups--since there are a number of new competitors entering the market, and the technology is not yet proven.
Omnis of import product is a circuit board (CB3668) that is used in the manufacture of graphics computers. While prices vary depending on the damage of sale and the size of the purchase, the average price for the CB3668 is $100. The expected gross sales for the coming year is 150,000 units, with growth expected to increase dramatically in the following years. While the future for Omni looks very chic indeed, the firm is new and has not as yet veritable a strong financial base.
Cash go down management is a critical feature of the firms financial management, and cash flow numbers are watched closely by top management.
At present, Omni is manufacturing the CB3668 in a plant leased from ElecTech. The plant also includes approximately equipment purchased from ElecTech. About 70 percent of the part in the product are manufactured by Omni.
Omni management is considering a evidentiary reengineering project in which the plant and manufacturing process would be importantly changed. The objective of the project would be to increase the amount of purchased parts (in the new plan,
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