Mob 2018

Module 3

a)Two challenges that would be faced by the Good Stuff if they won the bid are :
Increased quantity of desks- As peter and alexander are accustomed to providing desks and
chairs for only 2 privately owned schools, a major challenge they would face is the substantial
increase in the production of these desks and chairs. They would have to exert more labour time,
acquire a large amount of raw materials and increase productivity greatly in order to produce for
the 100 government owned schools.
Increased labour for both the father and son- A notable challenge peter and alexander will face is
increased labour, as they would have to be working increasingly harder in order to produce these
desks and chairs for the government schools while still maintaining a high quality. As they
handle all the functions of the business themselves, it will be quite difficult to manage their time
and productivity to create these products for those schools amongst themselves alone. They can
easily become overwhelmed and “burnt out” by handling this massive project on their own.

b) Three items Peter and Alexander would need to put in the operations section of the business
plan are:
- Facilities and Space required- As peter and alexander would change from producing for 2
privately owned schools to 100 government owned schools, they would need a facility and space
suitable for mass production of the desks and chairs. For instance they would need a large
warehouse facility with substantial space to make and store the desks and chairs. They need to
also state whether they will lease, purchase or rent the facility they are producing in. They should
also explain the layout strategy they will use for the different activities taking place in the
production of these desks and chairs (ie. Where the woodworking operations would be, the
painting operations, the laminating operations etc,)
Labour requirement- Peter and Alexander need to specify how much labour they will need to
effectively mass produce these desks and chairs. They need to specify the skill level/qualification
of the workers needed (ie. If they would be prefer workers who completed a wood working trade
course, persons who know how to handle wood working machinery, painters etc) and how these
workers will be organized (ie. Either they work according to shift times, part time or full time).
They should also state the fringe benefits the differently qualified workers will receive (ie.
Woodworkers would get time off on weekends etc).
Cost of production- One of the most important details peter and alexander need to provide in
their operations report is the overall cost of production they will incur. This section gives a
comprehensive break down of the costs of direct materials (ie. Wood used for desks and
chairs,paints/laminates to decorate chairs and desks ), direct labour (wage rates for emplyees)
and factory overheads (rent of premises, electricity). They should also provide fixed cost prices
as these costs would be incurred regardless whether or not production is actually done.

c) Three types of assistance they would need are:

Educational training – As peter and alexander only have their secondary school diploma they
may not be equipped with sufficient knowledge on how to handle the expansion of their business
and dealing multiple operations at once with regards to the production of the desks and chairs. So
they would need educational training and assistance with regards to management strategies (ie.
Knowing how to plan, delegate tasks and operations efficiently, so that quality and quantity can
be obtained), financial management strategies so they can know how to budget their costs and
stay within their financial limits during mass production and also they can learn to implement
technology into their operations to make production faster and more efficient.
Technical assistance- Peter and alexander would need to receive technical assistance as this large
expansion, would require more powerful and technical machinery to ensure that high quality is
maintained and mass production of the desks and chairs can be done easily. The technical
assistance they receive, should aid them on how to use the technical equipment needed to
produce the desks and chairs, as well as equipment selection ( making sure they pick sufficient
machinery to carry out operations ) as well as they could be assisted in improving their
warehouse design and layout, so operations can be done smoothly.
Financial- With this expansion, peter and alexander would need financial assistance as they
would have to purchase a bigger work space, more labour and machinery and more direct
materials. They could get this assistance via venture capitalists within the small business
association of Elsmere, as they can be provided funds which can be invested in their expansion.
As peter and alexander already make highly durable products, it would be an investment that
would ensure favorable returns.