Essay on Discopress

1453 Words Aug 2nd, 2014 6 Pages
| |
|Discopress Case Study |
|Operations Management |
| |
|Deepali |
|6/9/2014
…show more content…
She has to weigh in the capital expenditure of $10,000 required for the new program against the additional revenue it would bring in for Discopress.

Analysis (Quantitative)

All the key factors to be considered are tabled in Appendix A.

Customer Perspective

Appendix B presents the calculations from the customer perspective about their choice between Mass manufactured process and on-demand manufacturing.

FFE would be only willing to opt for on demand manufacturing if the cost of on-demand manufacturing is cheaper than the mass production option. In mass production, since FFE would have to order in bulk of 500, inventory holding costs also would add up for any title for which the license is valid for more than 1 year.

Even without the inventory holding costs considered, Categories B-I have higher mass production costs and thus FFE would go for on-demand manufacturing for these titles. For Category A, the license expires in a year, so there would be not be an inventory holding cost as they would just have to discard the unsold quantity. In that case, for Category A, mass production is cheaper than on-demand manufacturing and FFE would opt for a mass production for the titles in this category.

Discopress Perspective

Appendix C presents the calculations from the Discopress perspective for whether or not they should invest in additional equipment for on-demand manufacturing given the demand from FFE.

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