Revenue_Cost_and_Concept

The idea of this paper is to talk about suggestion for Clear Hear with the purpose of increasing revenue, reach model production levels and decide how fixed and variable costs can be used to capitalize on profit, and cost reduction techniques. Clear Hear is a maker of cell phones and at present have a decision to make on the subject of which type of cell phone to produce either the Alpha or the Beta model. The company has acquire an offer to generate 100,000 cell phones at a price of 15.00 each, with a release date of 90 days, by which will captivate the company’s values and computation. Should Clear Hear take this deal' Clear Hear needs to be practical with what the company can and cannot produce while staying optimistic, determined and practical. If the company takes Big Box’s offer of 1.5MM dollars for 100,000 units, then they need to manufacture that amount within the 90 day delivery date. Currently this company only has two production lines; one is utilized for the company’s Beta model and the other for its Alpha model. The Alpha model is the most inexpensive one to produce, at a current price of $20 from their Beta model that is $30. Equally these models presently cost a great deal more to produce then what the offer stands for. In order to boost the company’s revenue, the company should increase production of a capacity 70,000 units to 100,000. How can this be done' Clearly the company can change the second line that is used to produce their Beta model to also produce more of their least expensive Alpha model units. In this way the company has the ability and area to produce the amount that is needed for the offer. (UOP, 2009) The fixed cost to construct the Alpha model is nine dollars per unit. This cost cannot be distorted or adjusted because fixed costs are linked with the very existence of a firm’s plant and consequently must be paid even if its output is zero. Some fixed costs may consist of rental payments, interest and depreciation on equipment, buildings and insurance premiums are normally fixed costs; they do not increase even if a firm produces more. Conversely, the variable cost per unit on the Alpha model is eight dollars. Variable costs are those costs that total expense changes as volume of output changes. They contain payments for materials, power, transportation services, and part-time labor. The purpose is to make a return while providing the requested product, one way to adjust the variable cost per unit is to change variable to fixed cost. An additional recommendation would be for the company to buy another line in order to assist with production of this quantity. Furthermore, the company may want to only have fixed salary personnel, in order to decrease the total variable cost. (Suite, 2007) Productivity growth is significant in any industry, reason being it is likely to reduce costs and increase supply. In an attempt to achieve the preferred expectation levels of production, the company needs to offer training and have teams structured. Training will be provided in order to assist in establishing the right knowledge and skills, as well as to maintain high levels of skills for the company. Managers should demonstrate interaction and leadership in order to give off high levels of productivity and motivation from his/ her workers. Furthermore managers must treat all employees with fairness by reward employees for excellence, and ensure safety and a healthy work life. Managers should also recognize performance issues, opportunities and good decision-making techniques. Planning, organizing, leading and controlling are essential tools needed in order to accomplish performance goals. Yearly goal setting can also be used in order to present employees with yearly goals that are required to complete in a time frame allotted, which will be six months. This will grant the employee the opportunity to obtain a high performance rating at the end of the year. Goal setting will create positive objectives for employees to fulfill and achieve. Creating a challenge with the intention of derive personal satisfaction from the achievement, and create motivation will also be beneficial. Goals will comprise of training and projects to be completed. Feedback will be given with each evaluation so as to provide a way of reinforcing positive accomplishments of performance objectives. The evaluation process will also assist in discovering performance obstacles that may need training and development opportunities. (Schermerhorn, 2005) The above recommendations will enable the company to meet all business values. Company’s values are the following: “keep our employees working, provide our customers with products on time and that reliably meet or exceed their expectations, and treat our business partners the same as we want to be treated.” (UOP, 2009) This will lend a hand in the company meeting Big Box’s order request, keep the company’s employees working, and provide the service that in turn any company expects in return reliability and efficiency. Clear Hear’s values will be reflecting an image of the organization and this is a company that has a true concern about the customers, employees, and reputation. In conclusion, training and feedback are important tools in order to create and efficient, productive, and highly motivated team. Training will continue to be an important tool in order to provide employees with the skills and knowledge that need to achieve their goals. References Schermerhorn, John, R. (2005). Management: Eighth Edition. New York, NY: John Wiley & Sons, Inc. Suite101.com. (2007) Fixed and Variable Costs. Retrieved on October 26, 2009, from Web site: http://accounting.suite101.com/article.cfm/fixed_and_variable_costs University of Phoenix. (2009) MBA/561 Clear Hear Scenario. Retrieved on October 25, 2009, from Web site: https://ecampus.phoenix.edu/classroom/ic/classroom.aspx University of Phoenix. (2009) MBA/561 Economics: Principles, Problems, and Policies. Retrieved on October 25, 2009, from Web site: https://ecampus.phoenix.edu/classroom/ic/classroom.aspx