Contract manufacturer Essay

Executive SummaryDanshui deeds No. 2 in southern China is a consume manufacturer that get togethers electronic products and has a one-year contract with apple Inc. to assemble 2.4 million iPhones. Monthly business target for DC is 200,000 unit of measurements but in the first three months of the contract, the plant is unable to assemble as whatsoever phones as expected and is operating at a loss. Wentao Chen, manager of Danshui was aflutter on reviewing the monthly operations performance of august as in the third month of the contract, production was only 180,000 units. The plant has had obstruction hiring enough workers despite raising issue over 30%.Issues1. conclave process for an iPhone is complicated.2. Danshui has lowproduction.3. There is a lack of qualified labor.4. Insufficient culture to train their workers.5. Insufficient experience to manage operations.Requirements1. The plant manager considers whether a flexible work out would be more useful for uncovering problems than the quiet budget currently being used. 2. Need to perform breakeven and flexible budget analyses and calculate monetary value and usage variances as they consider solutions for the plants problems with the iPhone contract. 3. What should be the total expected woo per unit if all manufacturing and exaltation overhead (both variable and fixed) were allocated to planned production? What was the actual cost per unit of production and shipping?4. To suggest as to how Apple iPhone 4s would have been have to have been completed for Danshui Plant No.2 to break. 5. What are some strategies or decisions that Wentao Chen should consider in trying to solve the problems with the Apple iPhone 4 contract in the next nine months, how these would change the cost and profitability of Danshui Plant No.2 and the iPhone 4 contract.HypothesisIt is expected that the contract price should be raised in order to be profitable as variances discovered in the analysis suggest cost overruns andl ack of production handling & control while damages are also observed in material handling. Thus DC is expected to cover efficacy of its production while reducing loss / damages to materials.Suggestions and recommendations1. The most cost effective way to boost up production level under same capacity.2. Motivate employees morale and concern their welfare.3. Achieve learning bending effect under well-organized OT plan.4. Mix balance strategy is advised all over time schedule plan plus pay for performance policy. alternate Strategies1. Over time schedule plan2. Cellular manufacturing3. increase wages4. pay for performance policy5. Outsourcing