Sabbatical Marine, Inc'

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Sabbatical Marine, Inc.

• Utilizing Constrained Resources

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(No Transcript)
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Company Background

• Florida based
• Relatively small, young company
• Specializes in easy to set up, trailer-able
  mono-hull sailboats
• Recently expanded into Catamaran market

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Mono-hull vs. Catamaran

• Simple, 1 hull

• Little tougher, 2 hulls

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SMIs Concerns

• Worried about lackluster financial performance

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SMIs Concerns

• Seeking alternative courses of action to improve
  profitability
• Would like more detailed revenue and cost
  information, by product, to better assess the
  profitability of the firm.
• Confirmation of belief that adequate capacity is
  available and additional investment would NOT be
  required.
• Confirm no additional personnel is required.

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SMIs Constraint

• Labor Capacity!
• Only 491,500 minutes of labor time are being used
• An estimated 661,500 minutes are available
• Labor capacity utilization is only 74

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Solver Output
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Pessimistic Demand Model
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Estimated Demand Model
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Optimistic Demand Model
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Estimated Maximization
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Addressing Your Concerns

• We have prepared various budgets to provide
  detailed revenue and cost information (by
  product).
• Yes, you do have adequate capacity to expand
  production without incurring more costs, AND
• No, you would not have to hire more personnel to
  do so!

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Our Recommendation

• Maximize Capacity by Estimated Demand Growth
  Rates
• Run at 99.97 capacity instead of 74!

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Projected Operating Income
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Projected Capacity Usage
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Questions?