Have you ever thought about manufacturing a product? Well until this point in time the thought never crossed my mind, that being said, the purpose of this work is to come up with an item to manufacture, in this case oatmeal cookies, provide information on the manufacturing process from start to finish, determine the estimated budgets for the company, classify and organize fixed and selling and administrative costs, calculate the breakeven point, examine the competition and trends that exist within the industry, and finally attempt to come to a conclusion on how to improve the bottom line and increase production.
1. Manufacturing Process
The first step in the manufacturing process would be ...view middle of the document...
The fixed manufacturing costs we have are kitchen rent, utilities, insurance, and property tax. Finally the fixed selling and administrative costs are advertising and salaries.
6. Competition and Trends
The primary competitors in the cookie industry are Nabisco, Pepperidge Farm, Keebler, Russell Stover, Famous Amos, and Mrs. Fields. “Cookies represent 9 percent of the in store bakery sales, and the category is growing at 7.7 percent annually, outpacing the overall bakery department by 2 percent” (Beekhuizen, 2008, para. 1). There are reasons for these trends in the cookie industry, throughout our society snacking has reached new heights, and in no way looks to be slowing down anytime soon. Fresh seems to be the popular choice and the bakery has the advantage of making consumers believe that the product was made on the spot, and in turn is more fresh in comparison to an item purchased off the shelf. It is staggering to think, “the snack category is estimated at more than $60 billion and 90 percent of consumers” (Beekhuizen, 2008, para.3). More recently the trend for cookies has adapted along with consumers changing there eating habits and going to a much healthier style diet, the tends leading the way and keeping cookies competitive and growing so rapidly are the presence of Natural and Organic cookies that fit the sweet tooth needs of those that are aware of their health.
7. Improving the Bottom Line
If I had to improve the bottom line of the Cookie Cutter business, the first consideration I would make is to improve the manufacturing process. As it is now the business is limiting itself because of the amount of cookies that are possible to make within the workday. The first major issue is that the business only has one oven to utilize and all other manufacturing process needs must be done manually. I would consider creating an assembly line or possibly hiring additional personnel. The concerns I would have would be about if the workload is increased is it still possible for me to handle the business on my own. If so do I hire additional help, or purchase...