Ace Automotive Harvard Case Solution & Analysis

Ace Automotive Case Solution 

Introduction

Spartan industries, Inc. is operating in automotive industry and Ace Automotive is one of the divisions of the Spartan industries. Moreover, Spartan industry acquired Ace in the year 1987 due to its cost effectiveness and high quality products as Ace is considered as the main supplier of water pumps, fuel pumps and oil filters for automotive applications in the industry. In addition to this, Ace is also known as the main supplier machined castings and it is expected that these machined casting used in alternator assemblies.

Problem Statement

Ace is considered as the lucrative manufacturer and supplier of automotive parts and due to the increase in demand, the profit margins of the company increased continuously and also provided strong customer base internationally which helped the company to generate greater revenues.

It is expected that automotive industry is considered as the most profitable industry; therefore many players emerged in the market which set new performance standards and competition level in the industry. Moreover, the increase in competition and global experience forced the firm to reduce prices and improve their quality in order to attract greater number of customers and in order to attain greater market share.

In order to reduce the cost most of the automotive industries undergo through work force reductions which creates scheduling problem for the firms. Moreover,Ace department is also facing the same problem as it is considering three projects and the available hours upon these projects are less than demanded, therefore the management of the company is considering for an optimum production plan that could satisfy the demand of each customer by minimizing cost.

Capacity of the Production plant and associated costs

It is expected that St. Peters plant of the company contained die casting machines and capability of these die casting machines is between 400 tons to 1000 tons.The production department of the plan is considering 3 contracts in order to evaluate that which contract is increasing the profitability of the company by incurring minimum cost.

It is expected that General Motors, Chrysler and Laclede are three available contracts that are ordering high volume engine of the company and size of order of each company is also different.The management of the company is considering that which contract should be selected with respect to the casting press operations.

It is expected that casting machines could be run for 80 hours in a week and 50 weeks in a year, therefore machines are available for 36000 hours in a year. By excluding scheduled hours, maintenance, slack and other scheduled slippage hours, the available hours are 5940 and capacity of each press is different......................

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