Qualitative Analysis for Chandler Corporation
Chandler’s products are custom engineered and made for every location. The outcomes present a variety for the customers to choose from depending on the style of frame desired to create a natural look. The quantitative analysis depicts various elements that the organization can use when deciding on the new products as the information can get used by the management for the success of the company. The various elements in the computation are essential for manufacturing decisions. From the predetermined overhead rate that can help the company to apply the manufacturing overhead to products or job orders (Chiang, 2013). The values can help the organization determine the number of units required for manufacturing and the cost of every unit, as well as the overall expenses that is beneficial as it helps the firm set the resources needed to execute planning. The planning process is crucial in management and an essential element of success. The computation will help the management allocate a given amount of manufacturing overhead to every direct labor or machine hour. Chandler will thus benefit from the aspect through the effective allocation of the resources and set pricing.
Even though both the costs (practical and expected) will be essential to the management in making manufacturing decisions, the computations using the practical capacity will help the management make vital decisions. From the data, the management will establish the total costs and the cost per unit of the materials required for the completion of the manufacturing. It will also help determine the sufficient volume of production. Also, the costing will help the management determine the selling price of their products, and this helps minimize the losses that the firm can suffer as a result (Susan Wahab PhD, 2018). From the data, the organization has a high expectation of their products and thus the reason the expected capacity is more than the practical capacity. However, even though the forecast is essential in business, the organization should first consider the materials that it has and work with the labor requirements at hand to achieve its goals and anticipate the long term projects. This is the reason the practical capacity computation will be the most appropriate in the case. The functional capacity will help offer the cost information for the management and make comparisons with the previous costs.
The practical capacity also helps in the establishment of the design that will fit the global minimum building standards. The costing helps in the measurements, and this will meet not only the international rules for the organization’s design but also the local environmental conditions and regulations (Fisher & Krumwiede, 2012). Also, the practical capacity will help the organization in the adjustment when needed. The changes, such as with the engineering capacity is often a challenge since finding capable engineers is a primary problem, and it takes time (6months) for an engineer to be functional in an organization.
The practical capacity computation will help address this issue as it looks into the engineering aspects and establish the cost or the resource that would be allocated in this sector to realize the desired design. Also, it will help in the determination of the number of hours assigned to the engineers and determine the delivery time that can be extended for some projects. If there are not enough engineering hours available, the design that results may not be desired by the customers due to rush or laxity on the part of the engineers. Thus, practicality is essential so that the individuals work within the allocated time and with the resources computed for every stage to minimize wastage.