Donner Company Case Solution Essay

Words: 908
Pages: 4

1. The process flow diagram of the production system at Donner.
Preparation Stage

Imagine Transfer


2. What size orders would you schedule on the CNC drill? On the CNC router?
Time taken to process the orders depends on the selected drilling method either
a) Manual drilling or CNC OR b) Using CNC Drill
Assumption 1: Manual Drilling is not done on all the available Manual Drill Presses in parallel.
Calculating time taken for Manual drilling and CNC Drilling:
= Setup Time + Run Time (Per Hole) * No. of Holes drilled on each circuit board * No. of boards
Time taken for Manual drilling =15 + 0.08*500*x where x= number of circuit boards
Time taken for CNC drilling = 240 + 0.004*500*x where x= number of
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Cost of capital here is 16% annually which is about % monthly.
When we calculate NPV of this purchase with discounting monthly:
-80,000 + + + + … + = $180,320.96
Therefore, I would recommend adding another CNC Drill since NPV is positive.

4. Comment on the value of Dief to the organization. Arthur Dief is very valuable employee in Donna company in terms of utilizing all resources to meet every size of demands. He dealt with low volume of orders by himself. Without delaying or hurting the quality of products, his work contributed to minimize the waste of resources such as time and labors. The other employees could concentrate on larger orders so the productivity was enhanced.
5. Recommend actions that Plummer can take to improve the situation at Donner. First, Donner should utilize the existing CNC drill to the maximum capacity. According to the answer of no.3, it can reduce the cost as $391.5 ($3132.5-2741) by maximizing operation of CNC drill. We also would like to recommend the strategy to separate production lines regarding to the volume scale to deal with both demands. It is not easy for Donner to give up small quantity of orders because it already had the settled customer segment and facilities of small-sized and customized products. If it gave up this market, it would lose market share dramatically because of weaker competitiveness compared to big competitors such as IBM, AT&T, and so on. This