Peerless Laser Processors Questions Essay

Question 1 Describe the business performance of Peerless before the corrupt of the state-of-the art punch presses in 1991 and after that? (2.5 points).AnswerIn 1981, the union faced a do or pall close that forced them to subroutine late technology. If the optical masers failed, the caller-up would lease had nothing to fall back upon. There was no good economic justification available at the time upon which to prove the decision. By contrast in 1984 the company had a track record with the technology, had a good feel for the market and its potentiality growth, and was in a practically stronger position financially. Ted can be much more comfortable making this decision because of the reduction in uncertainty. The decision is harder on one way though. When the company had its back to the wall, it was clear that something different had to happen and quickly. When the company is in a more comfortable position, the pressure to make a decision is greatly reduced, making it easier to procrastinate.Question 2 What factors made Ted decide to purchase three punch presses in 1991? Were these factors also what Ted considered for buying the 1,200-watt laser cutter? (2.5 pts).AnswerThe decision Ted faces now is purchase the 1200-watt laser cutter, with the decision he faced in 1991 when he was considering the three punch presses. There are some potential factors with the new laser Peerless impart be creating products that are unfamiliar to them. Peerless has no way of knowing if the new market will respond as well as the saw blade market did to the anticipated improvements in quality and cycle time co arcminuteg from the laser. The new product line will require different distribution channels, different marketing techniques, and will draw new and different competition.Peerless may not be able to draw off enough business to keep the musical arrangement productive. The potential benefit is, of course, a new large market to successfully apply Peerlesss laser excis ion experience. A significantstrategic variant that Peerless should consider is the long-term viability of the saw blade market. The success of laser cutting (as Peerless has experienced) and early(a) technologies has the potential to reduce the overall market for mechanical cutting devices over the long term.Question 3 Of the three major types of control systems cybernetic, go/no-go, and postcontrol which would stomach been the most useful with the scratch laser and why? With this new laser and why? (2.5 pts).AnswerThe laser itself would use cybernetic systems to control the cutting process. The first implementation project would have benefited most from cybernetic processes as well because of Peerlesss unique position. Since they were in a do or die position, they would not have wanted to kill the project for the conventional reasons. In fact, based on the typical parameters used for go/no-go controls, Peerless would have been justified in killing the first laser project. In stead, because of their dire circumstances, they stuck to their guns and eventually achieved success. The second implementation project would benefit from go/no-go controls because it is being conducted in a much more stable business environment in which where the company could back away from the project if necessary.Question 4 Calculate the variable cost per blade of laser cutting with this new system. Assume that the variable cost of the laser is $4/hour, that the laser custs at the rate of 40 inches per minute, that a typical blade of 14 inches diameter sells for $25, and the same computer and software will be used as currently. Material load time for a 10-blade sheet of steel is one minute. Use a 3-inch arbor hole size and assume that a cut tooth doubles the cut distance. (2.5 pts).AnswerThe potential problems might be in purchasing the 1200-watt laser following steps are needed to estimate the payback 1. Estimate the amount of laser cutting needed using a 14 inches saw blade as a typical product. The blade would have approximately a 44 inches circumference. 2. ground on the cutting speed of 40 inches/minute, the cutting would take 2.4 minutes. Adding time to handle the blade, and maintain the workstation, estimate the measure timeat 3 min/blade. 3. Estimates the operating cost of a 1200 watt laser at $ 10/min, making the lasers portion of the blade cost $ 30/blade, it is not a particularly significant amount for a $25 blade. 4. Estimates the cost of the laser to be about $200,000. Assume an additional $100,000 for computers and training bringing the total to $300,000. 5. If the laser can produce a blade every 3 minutes, than it could produce 160 in eight hours at $25 a unit. found on Exhibit 1, the current profit margin is 12%, so its safe to assume that the single shift daily profit would fit to 160 X $25 X 12% or $480. 6. Given the $300,000 cost of the laser, the single shift payback period would be 625 days or half that amount for a two-shift operat ion. In addition to the brisk payback, the laser improves quality, cycle time and flexibility in responding to customer demand. The new laser system adds to the high tech image of the company and reinforces the employees pride. The original laser system was probably viewed as a threat to jobs when it was first implemented. Now that the company has experience with the benefits of laser cutting, they are in a better position to justify the investment both on non-economic and economic grounds.