In reviewing Smith’s assessments and conclusions, has he proposed
the optimal recommendations? Specifically:
1. The UK Manufacturing UK LTD is facing an array of issues that require a sound understanding of cost behaviour, process manufacturing, and capacity utilization, and market pricing pressures. Identify both internal and external issues that the UKM Senior management must consider their impact on their
planning for 2023 and beyond?
2. There are few reasonsin cost calculation that caused the 2023 SPx512 product cost to drop by £227 after reflecting the ABC review and the new costing approach? Did spending decrease or just shift? List those costs with supporting numbers.
3. What are the drivers of manufacturing cost? Of product cost?
4. Was it practical or plausible to reduce direct wafer fabrication by 34 per cent or £23m?
5. Should Smith have looked at areas other than wafer fabrication to identify further cost reductions?
6. Why is there still underutilized manufacturing capacity when the SPx256 is being manufactured? Is the pricing model in fact too aggressive?
7. What pricing advantages does UKM’s competitor, Top Telecommunicating Plc, have, knowing their TT256 has 33 per cent more die/wafer than the SPx256? (Assume the same wafer, probe, assembly and test costs and yields as the SPx256).
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