Oilwell Cable Company Case Study Essay

Words: 1005
Pages: 5

1. If Norm chooses to go ahead with the microprocessor conversion on the machinery without passing it by the team, what are the potential conflicts that might arise? What are the advantages of such a move?

- The biggest potential problem here is that the production team might feel slighted as their opinions were not considered in this major decision, and it may affect their current strong feeling of value hat they have with the company. Essentially if feeling of value is affected then productivity will be affected, as Steve Cooper a contributor to Forbes points out studies show that companies that effectively appreciate employee value enjoy a return on equity & assets more than triple that experienced by firms that don’t. (Cooper,
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Assume that variable overhead represents the same percentage of costs as fixed overhead. Find the net present value if the microprocessors cost $25,000 and their installation runs another $5,000. Assume a 10% margin.
- Here the impact of the microprocessors on production will not be high as the variable and fixed overhead costs are the same percentages, meaning that both fixed costs that are unchanged based on production and those costs that vary by output are equal percentages. Additionally net present value impact in a year would be $30,300 based on the total initial start up cost; here to see a true balance it would be best for Norm to also investigate the financial benefits (cut time, less scrap, and overall profit).

6. Compare Norm’s recollection of the division’s productivity gains between 1995 and 1999 to Exhibit 2. Explain the inconsistency.

- Here human recollection versus actually data results makes it clear why data should be collected and reported on versus relying on memory. The consistency could be due to the fact that in 2000 the company was hit hard by the recession and productivity took a serious negative hit, therefore as productivity rose and eventually surpassed its pre-recession numbers Norm simply was reminded of the “good old days” of high productivity.

7. What would you recommend that Norm do?
- I would recommend that a PMO be implemented for the task of;
Establish and enforce good project management processes such as