Assignment Sample on M0001T1M21Management Decisions Making
1. Discussion on the impact of Covid 19 in management decision-making processes
The effect of Covid 19 can be observed in the management decisions processes of UK Manufacturing plc as complexity arises in its supply chain management. Annual budgeting techniques and costs budgets are affected during this period. UK Manufacturing plc has seen a decrease in the selling price of its products since the year 2018. As expressed by Gombos et al. (2021), motoring and supervision issues arose during the pandemic period and visualized a negative impact on the financial policies and allocation techniques of UK Manufacturing plc. In this regard, it is necessary to mention the total annual revenue of the company which fluctuated in the year 2018 as it was intended to open a separate marketing department (As per the case study). The main focus of the above statement is that the total volume of its profit has been declining even before the pandemic situation started.
Total material costs of UK Manufacturing plc tend to be increased to £4,703,345 for the product SPX512 and £3,578,910 for the product SPX256 (as per case study). Keeping in mind the cost structure in 2017, it has been seen that due to the unavailability of an immediate supply of the raw materials, the company has to consume more materials at a certain time to maintain its financial services. In addition, it can be summarized that proper communication policies within the systematic areas of UK Manufacturing plc declined as total production performances of a company declined in that year. As emphasized by Schlegelmilch et al. (2021), a decrease in the operational activities of the manufacturing organizations reflected as the impact of Covid 19 along with global recession potentiality fluctuated during that period.
The current section is associated with revealing the impact of the Covid 19 on the management processes of UK Manufacturing plc. Analyzing the performance of UK Manufacturing plc during Covid 19 may help in evaluating the impact on the marketing strategies. Reduction into the productivity of the company is ascertained passwords impact of Covid 19 in its financial business. The purchasing level of the consumers decreases in that period which tends to make a reduction into the total purchasing power of the consumers. As narrated by Hatab et al. (2021), many negative effects and interruptions into the distribution chain management have been observed during this period which reduces total earning ability and sales volume of UK Manufacturing plc. Funding problems arose as one of the most effective problems in its financial volume. Cyber securities risks and financial risks are concluded as the two dominating effects of Covid 19.
However, it has been observed that senior management of UK Manufacturing plc did not consider the above-mentioned items in the preparation of financial planning for the year 2020. In this regard, it can be narrated that management techniques should need to measure the negative impacts of Covid 19 in the preparation of the financial accumulation techniques. It has been estimated that the total production of the company will increase to 13,312 units in the year 2020 which visualizes the Covid 19 impacts ignored during the period (as per the case study). As discussed by Currie et al.(2020), the economic growth of a business can be justified with the increase in the total financial volume and appropriate prediction into the budgetary techniques of a company. Test completed for the product SPX512 is 43200 in the year 2019 and 119430 in the year 2020 (as per case study).
It has been observed that UK Manufacturing plc will give more priority to the production of SPX256 for the both the financial year 2019 and 2020. As observed by Guderian et al. (2021), the classification of the products based on their capacity favours the systematic growth and financial policies of the company. Relative measures given about the budgeted production of UK Manufacturing will definitely help in the documentation of the above statements.
Based on the discussion on the capacity available for the financial year 2019 and 2020, it has been noticed that resources will remain available for the production of SPX512 for the financial year 2019 and 2020 as 52,800 and 2,22,000 respectively (as per the case study). In the capacity available statement for the product SPX256, it noticed that production will consume all the allotted capacity into its production procedure (Ilyin and Ilyin, 2019). Based on the above discussion, it can be figured out that UK Manufacturing plc ignored the impacts of Covid 19, in the preparation of budgets for the year 2020 as well as it will concentrate on production SPX256 for maintaining its operating activities.
2. Relevant causes about the product costs drop in 2019
UK Manufacturing plc reduced production costs for the product SPX512 by £227 in the financial year 2019. One of the relevant reasons for the decrease in the total cost is that UK Manufacturing plc pointed out water fabrication with the application of cost reduction policies in its financial volume. Adequate funding is not available for SPX512 as it has to reduce its production cost to stabilize total financial productional aspects in the business. As explained by Love et al. (2019), the main perspective of a business should be associated with increasing total production costs of a company, and for achieving that fundamental aspect it should need to increase the profit volume of the company. The decrease in product costs of SPX512 was based on implementing marketing departmental pricing policies into the company (as per the case study).
Analysis of all available viable options has been considered in the declaration of the product costs of SPX512 as well as innovative costing approaches have been evaluated to derive cost appropriateness for the product SPA512. Senior manager of UK Manufacturing plc has been able to derive that decrease in the production costs will definitely help into the increase in the financial products and increase into the financial mobility of UK Manufacturing plc. As opined by Wulfmeier et al. (2017), allocation of the necessary tools and utilization of the fundamental aspects may help in the concentration of appropriate cost projection of the company. Production costs of SPX512 were ascertained as £850 for the year 2019 and £637.50 that of 2020.
Application of Sarah’s pricing model will incur losses in the booth of the financial year which visualizes that implementation of Sarah’s pricing model will put a negative impact on the total policies and legal aspect of its business. The total net loss of UK Manufacturing plc will increase to -£15.2 million in the year 2019 and -£40.5 million in the financial year 2020 (as per case study). The above-mentioned facts help in visualizing the negative impact of the pricing model within the important factors and necessary productional areas of the company. As explained by Slaev (2017), analysis of the capital structure and marketing strategic factors will be considered as essential to make negative changes into the price consideration.
It seems that UK Manufacturing plc will be concentrated on decreasing the total cost of the company as well as it can be narrated that the main perspective of its business will be allocated appropriate costs into its productional procedures (Sievers et al. 2019). Fluctuations in the product costs of SPX512 will help in the growth of the business aspects as well as it will help in reducing the loss of the company during Pandemic Covid 19.
3. Distinguishing full utilization approach to manufacturing costs approach
Differentiation between the fully utilized cost approaches and manufacturing cost approaches can be summarized with the visualization of proper techniques and tools associated with the relevant factors into its financial volume. In this full utilization costing approach total costs of a firm have been determined based on evaluating prime costs and total variable overheads of the company. As narrated by Balbi et al. (2019), allocation of the production cost per unit and evaluation of the percentage of the direct costs in its business volume has been considered as one of the important financial aspects based on the reliability analysis. Evaluation of the per-unit costs is considered as one of the necessary objectives for the utilization costing approaches. Identification of the absorption rates has been undertaken as one of the important productional portfolio analyses of the company.
However, manufacturing costing approaches have been segregated into different costing methods and techniques such as job costing, standard costing, direct costing, and process costing methods. Relative measures have been taken to increase the potentiality of its business volume as changes in the production activities can be summarized based on the application of necessary tools and strategies into the business. As explained by Pennington et al. (2017), standard costing techniques may help in increasing total financial volume, and application of the effective policies of manufacturing cost techniques may help into the economic growth of UK Manufacturing plc. In this regard, it can be said that manufacturing techniques are relatively larger than the full utilization costing approaches as it is considered as the part of the manufacturing costing techniques. Distinguishing both techniques can be able to ascertain the role of the manufacturing techniques in the context of production factors.
4. Key drivers
(i) Drivers in manufacturing costs
There are various cost drivers associated with the manufacturing processes of a company as well as it can help in evaluating the total costs of a company in the context of deriving its financial performance. Direct wages hours worked is one of the useful cost drivers associated with the total costs of the company. It has been derived to know about the total labour expenses per hour as it can be used to mitigate the total labour expenses of the company. As explained by Quesado and Silva (2021), an increase in the business volume of a company can be properly accumulated with the help of systematic channelization and increased justification about the production performances of UK Manufacturing plc. To evaluate the performances of UK Manufacturing plc, direct wages hours worked has played a vital role.
Identification about the number related with the machine worked per hour has been observed as the two most important aspects in the visualization of financial products as well as it can help in deriving the key factors in the business. Application of the machine hour facilitates deriving the related information to increase the productivity of the organization. As narrated by Almeida and Cunha (2017), manufacturing cost drivers may be associated with increasing the productivity of a business organization along with examining the key factors related to its business activities. Functional implementation of the cost drivers used to increase the productivity of the organization. Other manufacturing cost drivers such as product returned by the customers’ cost driver and engineering changes required. Thus, it is mandatory to develop that application of the cost drivers will help business progression as well as it will facilitate in mitigating deficiencies of the organization.
(ii) Drivers in product cost
Visualization of product cost drivers may help in increasing the potential growth of the organization along it may be used in the allocation procedures. Product cost drivers of UK Manufacturing plc are machine setups, quality inspections, maintenance requests, production orders, and consumer power of the organization. Strategic growth and allocation procedure of a business related to increasing financial volumes. As explained by Cidav et al. (2020), product cost drivers may help in the growth of the company as well as changes in the necessary techniques and allocation procedures may be incremented. Marginal productivity may help in the allocation techniques and business development of UK Manufacturing plc. Use adequate technologies can be used in the systematic solution and mitigation of the deficiencies associated with its financial volume. Thus, it can be said that product cost drivers may be associated with the productive accumulation and prosperous growth of an organization.
5. Appropriate suggestions on reducing direct water fabrications costs
Yes, reduction in the wafer direct fabrication costs by £23 million or by 34 percent was adequate and productive based on the systematic evaluation of its financial performance. Wafer production costs of UK Manufacturing plc have remained constant for both the products SPX512 and SPX256 as £3000 respectively. Raw wafer costs of the two products are fixed as £45 per product which helps in deriving total financial allocation techniques and financial procedures (as per case study). As narrated by Zheng and Abu (2019), variable analysis of the probe costs is considered as the most important aspect to derive total deficiencies associated with the financial allocation techniques of a business. Assessable costs of UK Manufacturing plc visualize that decrease in the wafer direct fabrication costs along with it may help in generating mobility and necessary changes into the productional movement analysis of the company.
The total wafer fabrication costs of SPX512 for the year 2018 are £12,968,700 and for the product SPX256, the cost is £4,110,798 (as per case study). Changes in the total wafer fabrication costs are associated with the increase and decrease in the sales volume of a company. A decrease in the total fabrication costs will facilitate the productional increments and visualization of the appropriate allocation techniques in the company. As narrated by Mamoori et al. (2017), identification of the appropriate financial techniques and maintenance of sales volume must be associated with the financial allocation techniques and functional developmental analysis of the business. Keeping in mind the sales volume of the busiest activities the financial progression analysis may help in the strategic changes and developmental analysis.
Total package costs of SPX512 and SPX256 are £4,343,750 and £3,468,750 respectively, evaluated from the allocation techniques and related systematic issues within UK Manufacturing plc (as per case study). It has been observed that total package costs of the company have been associated with the package expenses of the company. As emphasized by Nghiem et al. (2017), growth in the sales volume of a business is related to the help in the systematic allocation techniques and application of several important financial policies to increase mobility into the financial policies of a company. Thus, it can be pointed out that secrete into the total financial policy and reduction into the wafer direct fabrication expenses are appropriate and useful for the implementation in its operational activities.
6. Other relevant areas to identify further cost reductions
Underutilized fabrication costs of UK Manufacturing plc are £24,838,326 along with this total underutilized probe costs of the company are £8,148,125 (as a powerful case study). In this regard, it needs to be criticized that total probe costs of a company are calculated as 1/3rd of the total fabrication costs. It is recommended to implement necessary actions for the reduction of further costs of UK Manufacturing plc (Hepburn et al. 2019). Senior Manager of UK Manufacturing plc, Mr. Smith should need to look over other areas into the cost reductions to achieve targeted goals into its financial activities.
Figure 4: Cost optimization techniques of UK Manufacturing plc
(Source: Currie et al. 2020)
It seems that a decrease in the total financial activities of the organization may help in the systematic growth and increments into the financial techniques of the business. In this regard, it is considered useful to mention that decrease in the total operating costs may help in the production growth of a company. As narrated by Mamoori et al. (2017), usage of advanced technology can help in increasing total business growth and development of its business operations. Based on the above discussions, it can be ascertained that further cost reduction will generate mobility into the business activities of UK Manufacturing plc (Nghiem et al.2017).
7. Pricing advantages of Top Telecommunication plc
Differentiation between the price level of Top Telecommunication plc with UK Manufacturing plc facilitates in visualizing whether its competitors have any pricing advantages or not. Discussion about the pricing advantages of Telecommunication plc can be evaluated based on comparative analysis about the financial techniques and strategic changes into the financial productivity. Comparison about the product of UK Manufacturing plc and Telecommunications plc derives the necessary information about the pricing techniques of the businesses individually. As expressed by Urbinati et al. (2017), allocation techniques and critical evaluation about the portfolio discussion may help in the systematic evaluation and changes into the necessary factors of a business. Wafer direct fabrication costs of Telecommuting plc for the product TT256 is £5,467,361.34 which is 33% more than the cost of SPX256 (as per case study).
It seems that the total probe costs of SPX256 are £1,376,875 which is 33 percent lesser than the total operating expenses of the company as a decrease in the total expenses may help in the sound health of the final volume of UK Manufacturing plc (as per case study). However, yield value and test codes are the same for both companies. In addition, it can be mentioned that an increase in the material costs of a product fluctuates financial proportion and analysis of the necessary techniques into the business. As opined by D’Oca et al. (2019), acceptance of proper techniques and systematic evaluation of the financial techniques are associated with the reduction of the total business volume of an organization. Discussion based on numeric valuation may tend to incremental analysis about the declaration of the important areas in the business.
Test codes of the productional costs for TT256 are £14,76,300 which is greater than the test codes of UK Manufacturing plc. Underutilized costs of UK Manufacturing plc are comparatively increased based on the proper allocation of the systematic issues and necessary accumulation techniques of the company. Probe and assembly expenses of the Top Telecommunications Plc are comparatively higher than the total cost expenses of the UK company. As expressed by Galvez et al. (2018), utilization of the productive aspects and financial accumulation techniques are considered as the key areas in the market segmental analysis. Increase In the total expenses in the operating activities of Top Telecommunication plc visualizes that total financial technique related with its production expenses. The discussed sector can be concluded as giving the opinion that Top Telecommunications plc does not have pricing advantages compared with the total production expenses of UK Manufacturing plc.
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