MGM’s capital structure makes up of 700,000 common shares which have a current market price of $13 per share .It is an assumption that firm’s weighted average cost of capital (WACC) could be reduced if it issues 1.5 million of long term debt and utilize the proceed to purchase and then retire 120,000 common shares.If MGM undertakes this assumption to alter the capital structure,explain its impact on cost of common equity.

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MGMT 3306Operations and Supply Chain ManagementAnswer all 4.1. A small manufacturing facility is being planned that will feed parts of three heavymanufacturing facilities in Houston. The location of the current plants with theircoordinates and volume requirements are given in the following table:Plant Location Coordinates Volume/ yearSugarland 300,320 4000Katy 375,470 6000Clearlake 470,180 3000Use the centroid method to determine the best location for this new facility.2. Please refer to the case study “Rochester Manufacturing‘s Process Decision” found atthe end of Chapter 7 on Process Strategy and Sustainability. Answer 1, 2, 3 of this casestudy. Stay focus on your answer to what is given in the case and your ownunderstanding from the reading of this chapter.3. Historical demand for a product isMonth DemandJan 12Feb 11Mar 15Apr 12May 16Jun 15a. Using a weighted moving average with weights 0.60, 0.30, and 0.10, find the Julyforecast.b. Using a simple three-months moving average, find July forecast.c. Using single exponential smoothing with Alpha = 0.2 and June forecast = 13, find theJuly forecast. Assume whatever you want to wish.d. Using simple linear regression (least square or trend analysis), calculate theregression equation and using this equation forecast for July.4. Item X is a standard item stocked in a company’s inventory of component parts. Eachyear the firm, on a random basis, uses about 2000 units of X which costs $25 each.Storage cost amounts to $5 per unity of average inventory. Every time an order is placedfor more item X, it costs $10.a. Whenever item X is ordered, what should be the order size?b. What is the annual ordering cost?c. What is the annual storing cost?

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Increase sales closings by 50%.

vs.

Strategy Document, the Recent Version

Global Fleet Graphics makes premium, durable graphic-marking systems for buildings, signs, vehicles, and heavy equipment. The corporate logos and graphics we see on fleets of package delivery trucks, tractor trailers, and airplanes are typical examples.

Fleet Graphics now faces more demanding customers and more aggressive competitors than it has in previous years. Customers want design flexibility and larger graphics without higher cost. Some customers want easy-to-remove products, while others want durable ones. Bus operators want graphics that cover the windows yet still allow passengers to see out. Total sales of graphic materials have increased, but sales of traditional, painted graphics have declined due to their high cost. 3M has 40% of the market and for some years has been the technological leader.

Fleet Graphics faces three major competitors: AmeriGraphics, GraphDesign, and FleetGlobal. AmeriGraphics has begun to expand its product line by using our older technologies as the patents expire. Its global share has grown from 10% in 1982 to 16% today. GraphDesign uses direct distribution and new manufacturing capability to compete on price but has experienced quality problems. Its market share has dropped from 18% to 15% in the last ten years. The quality of FleetGlobal’s products is comparable to ours, but they sell at a lower price. Its share has grown from 24% in 1982 to 28%today.

In short, we are losing our patent advantages at the same time that we face three strong competitors that are using low-cost strategies.

Without radical changes, Fleet Graphics will not be profitable in the near future. We can expect rapid price erosion once all competitors bring very similar products to market. Given 3M’s higher overhead, we cannot compete in a price-competitive business without a technological advantage.

Our vision: Incremental product or process improvements will not solve this problem. We plan to transform the industry through several technological advances. At the heart of this transformation will be a move from analog to digital printing-and-storage technology. In addition, the quality and economics of the final product will be improved using new film and adhesive technologies. The strategy we propose draws on diverse areas of 3M.

First, we propose a quantum change in Global Fleet Graphics’ production system that will allow us to deliver products much more quickly and at a competitive price. Rather than focus on cost reduction through incremental process changes, we have tried to rethink the entire way we produce fleet graphics. We have contacted numerous R&D areas at both the corporate and divisional levels to locate appropriate and adaptable technologies. The search has resulted in a radical plan for a new, more flexible, lower cost graphics-production system.

Many graphics will be produced and stored digitally. We will convert manual, analog, silk-screen printing into digital form by scanning the art and cleaning it up on a computer screen. We will then be able to send it digitally anywhere in the world. Global Fleet Graphics will create a central repository of images that can be electronically transmitted to production facilities worldwide. IT estimates that the system will cost $3 million and be operational in 24 months.

The repository dramatically decreases product delivery time from as much as four weeks to as little as three hours. It also drastically reduces inventory.

Second, we propose development of a new generation of patented technologies and products to differentiate our offerings from competitors’. Three such products are already in the works. We are in the late stages of developing adhesives and films that can cover windows but allow people to see out. Only the final product-definition and design work still need to be done; design should be completed in five months. Manufacturing has begun to work on production facilities to ensure adequate capacity worldwide.

In addition, we are now close to answering our customers’ need for graphics that can be applied to many nontraditional surfaces (such as corrugated truck sidings) and flexing surfaces (such as European trucks with canvas sides). Films for these applications already exist in our labs.

Last but not least, new adhesives will make graphics easier to install. The Adhesives Division has a product that remains tacky for a time so that graphics can be positioned and repositioned. When the placement is correct, a second adhesive system is activated to bond the graphics in place. The repositioning capacity decreases installation time by 30%, resulting in substantial cost savings.

Third, we need to upgrade our sales and marketing staffs’ skills to match their capabilities with the technology-driven strategy. We will put substantial effort into field testing and marketing. Technical, marketing, and sales personnel will field-test the new products both domestically and overseas. Simultaneously, we will develop and test modifications to the product as well as produce sales and other supporting documentation.

Before we launch the new products, sales, marketing, and technical-service personnel will train all sales reps in how to use and sell the new technology. Training will include both technical and communication skills related to calling on top-level executives: reps will receive intensive training in how to talk those customers’ language, and they will also be able to handle technical questions on their own. Training will begin one year from now, and we expect it to take six months.

To summarize, Global Fleet Graphics has drawn on diverse technological skills at 3M to create a proposal for transforming its business. What has been a hard-copy, analog, design-materials business will become a more fully global, digital, electronic-imaging and repository business. Combining new films with new adhesives will create substantial value and reduce overall cost in both the manufacturing and application of graphics. By these means, Global Fleet Graphics will maintain and enhance its profitability and its industry leadership.

We believe that this new graphics system will radically transform the industry in a manner consistent with 3M’s overall corporate strategy—regaining technological advantage on both the product and process fronts. The competition may duplicate some parts of this strategy (for example, the electronic storage of graphic images), but that will take time. We should have an advantage for several years even in those areas. Other areas have patent protection, and our advantages can be sustained for a decade or more.

READING RELATED QUESTIONS:

Read the 2 strategy definitions of 3M. Answer the following questions:

7. Does the new strategy document past the sniff-test? Why? (5pts)

8. What are the problems with the first strategy document? How does the new strategy document introduce industry and competition? Give examples from the reading (5pts)

10. What’s the biggest challenge that 3M is facing? (5pts)

11. What are the capabilities that 3m is proposing to build?  Which one of them can become core competencies? (Name the specific Tools we need to identify core competencies, and perform it) (12pts)

Surname 1Student’s NameCourseTutor’s NameDateMGMT 4650 SPRING 2015 Concepts Part OneQ1Answer: a. 1, 2, 4Q2Answer: d. Customers deciding the product isn’t worth what the firm must…

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This question was already asked and answered, but when I paid, I found out it was canceled. Can I get the answers?Henry Clements Car Rental AgencyDirections: Carefully read through the following case study and answer all of the case studyquestions. Include supporting calculations and screenshots. Save your document with anappropriate file name that includes the activity number and your name (Example:john_smith_capstone). Submit your document through the Capstone Case Study Activity Link inthe Exams area in Blackboard.Page 1 of 4Henry Clements is a friend of yours who has a car rental agency in a major metropolitan area. Although his is an independent company, Henry works closely with three other independent companies in the metro area. They share information and each week they forecast the number of cars each will need the following week. Then, if needed, they will transfer cars between location on Sunday when none of the agencies are open. If they have to go and get a car during the week, it will cost $75 per car, considering the lost time and good will of making the customer wait. Moving on Sunday gives the customer the option to return the car to any of the four locations and it has allowed Henry and the other agencies access to extra cars to meet their needs. Everyone is happy with this arrangement.Henry reviewed his company’s performance and he believes there is room for improvement. He has obtained records for the last three months. The data he collected are shown below. It is Friday and he has to input his forecast for the number of cars needed tomorrow. He knows you have been taking a class in Quantitative Analysis and has asked you to review his data and help with his forecast to determine what else he might to do increase his performance. As you discuss the situation with him, you learn that he wants to be able to meet the customers’ requirement for a vehicle 95% of the time. He says he rarely ever gets complaints if the exact model is not available, as long as he has a vehicle available, so he does not try to anticipate particular size or model requests and lets randomness take care of that. Weekly demand is as follows:Page 2 of 4WeekDemandWeekDemand112672432200816732439131416710208513211251621112171In the past Henry has used the average number of cars as his basic number and adjusted to meet his goal of 95% service. He asks you about some other methods he has heard about. 1. What should his forecast be using this method? 2. What would the forecast be if he used regression analysis? 3. What about time-series forecasting? 4. What will you tell him about which is the best option?Henry has two people who can check cars out for a rental. One works at the service counter and the other works in the office and can come out to help if needed. Henry has determined that people arrive following a Poisson distribution. Rentals average about 24 per day and the service person takes about 15 minutes to process a customer for a rental. Henry sees that the agent at the service counter in not busy all the time so he is contemplating not keeping the office person trained and leaving only the service counter person. 5. Is this a wise move? 6. What is the average time the customer takes from when he/she arrives until he/she has a car?Currently, when the office person in serving customers, a second line forms in front of the counter. 7. Is that how Henry should set up the waiting area or is there a better way?When a car is returned to his location, Henry has three employees who prepare the car for the next rental. As a car arrives, one of the employees takes the car and washes, cleans, vacuums, and inspects it, prepares the paperwork for the next rental, and returns the car to the lot. The employees each take a car in sequence. Henry has observed the process and hasPage 3 of 4observed the time each takes to complete each step. The information about the times (in minutes) is as follow:EmployeesWashVacuumInspect & ReturnBeverly221311Cameron151720Tina1919148. Is there is a better way to organize this part of the operations?Each rental requires two agreement forms, one for when the car is checked out and one when it is checked in. Henry orders these forms from a local printer. The printer charges Henry $40 to set up the printer. The forms cost 50cents each. Because of the damage to the forms and the forms becoming obsolete, it cost Henry 25% to store the forms. The printer will only accept orders in multiples of 100. 9. If the three months of data collected and presented above is indicative of all demand, how many forms should Henry order?The printer offers Henry a 10% discount if Henry orders 5000 or more form at a time. 10. Would this be advantageous to Henry? How much money would it save, if any?Henry is now ready compute what do with the cars on Sunday. The other locations report the following on-hand and needed cars. Henry will have 150 cars on-hand Saturday night.Location NorthLocation EastLocation SouthOn-hand165160200Needed195160190Based on past experience, the cost to move cars is:BetweenAndCostHenryLocation North$12HenryLocation East$22HenryLocation South$17Location NorthLocation East$7Location NorthLocation South$28Location EastLocation South$14Page 4 of 411. How many cars will need to be moved and what will the total cost of the move be? 12. Based on all the above computations, what would you recommend to Henry about his operation and what changes would you propose (if any)?

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