Operations Decision

Business Summary

Fabrica Shirt Company (FSC) is among those private companies that deal solely in the manufacturing of shirts for both males and females. This company was founded in 2012 by Mr. Bradshaw. This company has been providing both types of shirts that are short sleeves and long sleeves that are manufactured according to the customers demand and especially according to the climatic nature. Currently Fabrica Shirt Company (FSC) has employed 100 workers who are providing output of 6000 units per month while the working days within a month are 20 days. The wage on a daily basis that is given to every worker is $70, while on the other hand the price of the output produced by these workers for the firm is $32. The company has estimated that the cost incurred in the head of other variable inputs is $2000 per day. The firms fixed cost has been estimated as “high enough” because of which the firm is facing an increase in the total cost that is exceeding the total revenue generated by the firm. The marginal cost calculated for the last unit manufactured is $30.

It has been observed that the main strength of the Fabrica Shirt Company (FSC) is its fame because of which people prefer to wear their shirts. People who don't like their shirts still wear these shirts as they think by doing this they would become highlighted and they will look tremendous while being protected by the hot or cold weather that comes in summer and winter season respectively. The core reason for the fame of Fabrica Shirt Company (FSC) is its ability to control the outer temperature and its feature of being durable. Shirts manufactured by Fabrica Company are preferred mostly by teenagers because they provide quality products consistently, keeps its customers updated with latest fashion styles and shirts provided by this company are very competitive to its opponents within the same industry.

Determining factors that greatly impacts on management decisions and plant operations to either continue or discontinue company's operations

 Donald Waters (2006) said that factors of environmental scan refers to the environment that is macro in nature and is also the interpretation and study of all the political, economical, social and technological analysis (commonly known as PEST analysis) trends and events that creates any kind of influence over the business, an entire industry or even influences the whole market. In more simple words, it is the activity of obtaining relevant information about all the possible events and relationships that took place in the firm's outer environment, the knowledge of which will assist the top level management in making appropriate decisions for the betterment of the company's future operations and line of actions. This can create a great impact on the Fabrica Shirt Company (FSC) for example, climatic factor that is totally unpredictable, can influence the purchasing decisions of people which could result in decrease or increase in the demands of the desired product. Conditions of macroeconomic therefore can create some influential ...