Group Erie Phase3IP
CallowayR75
RCallowayMGMT655Phase2IPPowerpointPresentationErieEchoSensor.pptxErie’s Product decisions for Echo sensor
Rodney Calloway MGMT655 MANAGEMENT CAPSTONE
Echo’s Research & Development
Performance: 8.0
Size: 12.0
MTBF: 23000
Price: $38 (Pettus, 2012).
As one of Erie’s Product Manager for the organization’s product line: Echo Sensor. Despite what was once a dominated market by one amalgamation, but now has been divided into six teams who are looking to capture those sales, however, my product line of thought for Echo's Research and Developing is to solely give consumers exactly what they desires.
Echo’s Research & Development Product Decisions for Round 1:
Performance: 8.0
Size: 12.0
MTBF: 23000
Price: 38.00
Material Cost: 15.53
Age Profile: 1.7 – 2.7 (Pettus, 2012).
Erie will focus the existing organization’s product line into the following segments: Low End, and Traditional. The Low End segment will serve the products Eat and Ebb. The traditional segment will serve products Edge, Egg and Echo (Pettus, 2012). During the organization’s early years, we will gradually migrate the segment Edge and Egg products for Performance and Size to the Traditional Segment. Each manager, traditional need to allow Eat to cohesively slip into the Low End while Edge slips into the Traditional Segment (Pettus, 2012).
This decision made Echo’s material cost 15.53, but my line of thinking was that even though it would cost more to make, the reliability of the product would lead to higher sales. Echo’s Age Profile is 1.7 to 2.7 (Pettus, 2012).
2
Echo’s Marketing
Price: $38
Promotional Budget: 800
Sales Budget: 800
Sales Forecast: 355 (Pettus, 2012)
The Marketing Decisions for Echo’s Product Line, was the price where I had chosen to set for Echo was $38. I felt congenial about charging a higher end price, simply because I clearly wanted to give the consumers a reliable product that could cohesively be justifiedby having price tag that was higher (Pettus, 2012). For me to implement a cohesively marketing strategy would allow for the Echo to clearly and concisely maximize profits as well as recoup the R&D higher costs.
Erie will successfully maintain accessibility, including awareness in order for the organization to target its segments. After we start establishing the position for our cost leadership, we will begin to focus our attentions to revisit our situation and coherently start deciding whether or the promotion and sales budgets had been reduced or if we should continue keeping the pace with competitors. In fact, Erie’s prices will be lower than average, however, while both Edge and Echo are being re-positioned, we will price below and sales will be discontinued budgets as we exit the specialty segments: Performance and Size (Pettus, 2012).
I had chosen to set Echo’s Promotion Budget and the Sales Budget both to 800 (Pettus, 2012). Moreover, I felt both were a little low, instead I have the benefit to understand an event only after it has happened; just know that I would have went a little higher on both.
Echo’s Sales Forecast was 800, and the actual sales were 355, so I was not too far off as far as forecasting went. Echo’s Revenue Forecast for its Variable Cost was $19,935. The total cost was $30,400 (Pettus, 2012).
3
Echo’s Production
Sales Forecast: 355
Unit Sales Forecast: 800
Inventory On-Hand:: 40
Contribution Margins: 34.4
Automation Rating 3.0% (Pettus, 2012)
Echo’s Production Decisions were as follows:
Sales Forecast: 355
Unit Sales Forecast: 800
Inventory On-Hands: 40
This led to a contribution margin of 34.4% (Pettus, 2012).
Erie will increase automation levels significantly on our organization’s products, and because upon our ability, the automation will set the limits in order for us to reposition products with R&D; allowing us to postpone automation for Edge and Egg until arriving in the Traditional Segment. However, we simply prefer to the second shift to capacity expansions. Echo’s second shift production is 0% (Pettus, 2012). Echo’s automation rating is 3.0%
For the next round, I am confident in my ability to make the proper production decision, lowering the amount of excess inventory for the Egg product line, while also achieving the desired contribution margin of 30% or higher.
4
References
Pettus, M. (2012). Strategic Management for the Capstone Business Stimulation and Comp-XM: Analysis and Assessment (6th Edition) CapSim. Retrieved from file://c:/Users/victo/Download/MGMT_655_Pettus_Textbook(1).pdf
