Commodity Processing and Trading Company Facing Challenges Essay

Commodity Processing and Trading Company Facing Challenges Essay

Instructions/Descriptions

Recycling Centre Corporation

The case describes a commodity processing and trading company that is facing several challenges as it seeks to turn its losses into profit. Important themes are touched upon including: capacity planning and control; inbound versus outbound customers; incentives and their effects; and operations strategy.

The issues of conversional waste management versus environmental awareness and recycling are raised in the case study and should be considered with regard to decisions around a proposed operations strategy.

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1. The case study enables for some quantitative analysis to be performed with regard to the company’s major asset: the heavy-duty spreader plant. The information required to perform the calculations is detailed in the section entitled Recycling Centre Corp. on page 3 of the case study. You should try to calculate:

• The capacity of the heavy-duty spreader in tons per week*
• The annual revenue currently being generated from this machine assuming a selling price of $370/Ton
• The annual production costs of the heavy-duty spreader
• The annual profit or loss** from this asset

* You are given the theoretical process capacity in tons per hour. To calculate the actual capacity achieved, you must take into account losses from availability, performance and quality.

• Availability takes into account any events that remove production time such as waiting time or breakdowns. Production hours – (waiting time and breakdowns) gives the net capacity.
• Performance takes into account anything that causes the machinery to run at less than the maximum possible speed when it is running. Net capacity – speed losses gives the effective capacity.
• Quality takes into account any output from the machine that is unusable such as waste or scrap. Effective capacity – waste gives the actual capacity

** If the annual costs are greater than the annual revenue, then divide the difference by the selling price/ton to identify how many additional tons of raw material are required per annum.

This information will be useful in conjunction with the qualitative information about the operations side of the business to enable you to make a fuller analysis of the organisational situation.

1. Once the quantitative calculations have been performed, students should use the qualitative information provided in the case study of Recycling Centre Corporation to:

(1) Analyse the operations management of the conversional waste management side of the business and identify the different managerial challenges facing the organization. Issues to be addressed should include:

• An analysis of operations capacity management
• A financial analysis of operational costs and revenue
• A strategic customer requirements analysis

(2) Assess and compare different possible options for the strategic direction that the company should take***

(3) Argue for what you feel are the most appropriate managerial actions to take

*** You could consider using the Ansoff Matrix to help structure your arguments in this regard:

The following webpage gives a useful synopsis of the tool:

https://kfknowledgebank.kaplan.co.uk/business-strategy/strategic-choice/ansoff%27s-matrix

Written Report

The overall exercise will contribute 70% to the module assessment. The remaining 30% will be obtained from the three groupwork assignments worth 10% each.

Marks for Individual Coursework Report

• Quantitative Analysis: 20%
• Analysis of the operations management of the business: 20%
• Assessment of possible strategic direction: 20%
• Argument for what you feel are the most appropriate

managerial actions to take: 10%

70%

It is expected that the written report will not exceed 3,000 words.

All published information that has been used in the preparation of the written assignment report should be included as an appendix.

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It is expected that you will use the Internet for the following:

• To visit web sites of similar organisations to Recycling Centre Corporation (the case is developed based on a real company but the name of the company is disguised) to better understand the industry and the market pressures.
• To visit other relevant sites regarding environmental strategies
• To obtain academic literature from electronic databases to provide support for your expressed views

The written report should include at least 15 references to academic literature. All references cited should be included in a bibliography at the end of the assignment.

The written report is to be submitted via Turnitin by midnight on the Friday 1st May 2020.

Commodity Processing and Trading Company Facing Challenges Essay

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