Introduction
Data Tech Inc is a growing company that is enrolled in a large business with good management and strong aspect of going concern. The management through the VMO’s of the business are obligated to mainly focus on growth rather than any other aspect, and the growth criteria adopted will depend on many factors (Candorado Restructures Management Team. 2012, May 25).
Small facility with growth prospects or a large facility immediately?
Data tech is an established entity with potential customers, which are four large corporate entities. What it cannot afford is to disappoint the customers in terms of delivery of products and services. It therefore has to provide the products irrespective of the circumstances, otherwise, the company may be sued by the customers for breach of the contractual relationships. (Schroeder, Goldstein & Rungtusanatham, 2011).
Data Tech Inc has been so far successful in its business operations most so after securing full contracts from its two loyal customers. It has gone ahead to secure two more clients. The volume of business that the company is currently receiving from its clients is between 20,000 and 30,000, and this requires from the company to move its business to a larger premise immediately. The task that it should undertake is the cost benefit analysis for moving into the new larger premise. The premise that it should consider moving into should be one with more space for further expansion since Data Tech business is likely to grow drastically in a short time span (Reid & Sanders, 2010).
After the cost benefit analysis is done, a margin to be realized should be positive however it may be small. Depending on whether the demand for Data Tech products and services is high or low, the company will be guaranteed profitability ranging between $1,000,000 on the higher side to $600,000 on a lower side. From research by the company’s strategic team it is clear that demand will grow exceedingly high hence there are prospects of making massive sales. Growth will also be rapid in an extremely short period of business activities.
Weight of the two capacity factors identified
In addition to factors like client handling techniques, proximity to both the customers and raw materials, strategic location to the customers affects growth of Data Tech Inc. A critical factor that is highly ranked for consideration of growth prospects for the company is an instant facility with excess capacity, which would guarantee growth in the future. Secondly, the facility must show the potential of growth and expansion. This is shown by factor scores of each level of (4, 5, 0) and (0, 1, 5) respectively. The weight of the two factors according to the rating scales used is 40 and 40 respectively. The factor weights identified above depict the demand level as shown by the two business factors considered. Therefore, the order of seriousness in which they should be handled varies (Reid & Sanders, 2010).
Data Tech Inc has room for accommodating excess facilities in the company’s future growth prospects. Its market base would also grow faster demanding for more efficient handling procedures. The rate at which the company is able to acquire clients is a sign that it would grow faster. All the above considerations combined with the proper implementation of the business factors identified would help the firm, which started as a mere garage to become an empire.
Factor rating to select a location for Data Tech Corporation
The location of new establishment should therefore be selected during the procedure that follows. It should, in the first place, have a basis for rating the factors which are applied in the following procedure: – the facility must show excess capacity and prospects of future growth before any other consideration, these two factors rate at 40 and 40 respectively. The location should then consider proximity to the raw materials, which is a postal service center since this, is the way in which the operations receive their raw materials. The team should then consider proximity to the airport followed by the environmental consideration, and lastly the business community welfare must not be ignored. This is because they are also a major stakeholder in the operations of the firm.
How factor analysis would differ if other alternatives were selected?
The factor analysis consideration presented above majors on growth considerations since the business is already established. This is shown through the good relationship that it already has with its potential clients and hence it is able to get new clients. Its goodwill establishment is also quite superb (Heizer, & Render, 2001). If another capacity alternative like customer consideration is taken into account, then we should analyze several elements related to the customers like pricing, closeness to the customers and product mix. This would imply that the business in picture is still young and must be supported on a large basis at the initial stage to grow.
The factor analysis would therefore start from the proximity of the business to the airport, closeness to business community which also forms part of the customers, business environment with least consideration given to future growth prospects. (Student perceptions of the value of career development learning to a work-integrated learning course in exercise science, 2012).
References
Candorado Restructures Management Team. (2012, May 25). Market Wire, 17, 112-117.
Heizer, J. H., & Render, B. (2001). Operations management (6th ed.). Upper Saddle River, N.J.: Prentice Hall.
Reid, R. D, & Sanders, N. R. (2010). Operations management: An integrated approach (4th ed.). Hoboken, NJ: John Wiley & Sons.
Schroeder, R. G., Goldstein, M., & Rungtusanatham, M. J. (2011). Operations management: contemporary concepts and cases (5th ed.). New York, NY: McGraw-Hill/Irwin.
Student perceptions of the value of career development learning to a work-integrated learning course in exercise science. (2012, September 22). Australian Journal of Career Development, 23, 342-432.