Discuss and critically analyze whether this is a good expansion
Below is the information related to the group project for this course. Your instructor will assign you into a group during Week 4.This allows time for students to drop/add during the first 3 weeks of the course. Group Projects provide the opportunity to work with your classmates and will be a necessary part of the Financial Management workforce. Please use this occasion to demonstrate your strengths and allow group members to do the same.
There are a lot of opportunities in this project to be creative. While some data are provided you may wish to include additional information and this is encouraged. In other words if its not there you are to include it! Critically thinking and creativity are vital to your success in the work place and this project is a great chance to build those talents. You may want to devise a plan for additional manufacturing plants or you may want to discuss ways to better communicate with the owners. The possibilities are endless but the time for the project is not! Be creative and have fun. This is the time to take risks as it is a classroom setting.
Background of Project
The industry of medical devices involves a number of monitoring and reconstructive devices. Some of those devices include cardiac and diabetic care as well as hip and knee replacements. The owners of a medical device manufacturing firm called JointsOrtho have recently reviewed information about the expected growth of the aging population in the United States. Every day 10000 Americans are turning age 65 every the population of older adults is expected to reach 89 million people by the year 2050. This figure is more than double the number of older adults in the United States in 2010.
Orthopedic medical devices are one of the fastest growing areas in medical device manufacturing. The owners of JointsOrtho or JO manufacture full hip and knee replacements and would like to have your firm set up a financial plan for opening a new manufacturing plant that makes medical devices often used for Orthopedics. Specifically you will set up a plant that manufactures Full Hip Replacements in Delaware. Each Full Hip Replacement will be sold throughout the United States at a cost of $36750 each including shipping etc.
Sales are expected to be between 1000 and 1200 hips per month. This figure is above what they are already producing in their first plant.
Depreciation for equipment should be set to 10 years.
Beyond the information provided you are unable to get any further guidance from the owners or the Financial Department at the other warehouse location. Remember you are setting up a project proposal and sending your recommendations to the owners of JointsOrtho. You will be presenting it to them in teleconference. You may wish to do the written portion of the assignment in a Word Document or PowerPoint. If you use PowerPoint be sure to use the notes section to write out detailed information. A reference sheet/page is required for either format you select. The Financial Statements can be included in the same document or submitted separately. Each Group Member must submit all documents to their Assignment Folder!
You will need to provide information to the owners of JointsOrtho that includes what it will cost to open a facility and hire workers and determine if the facility will breakeven within the first 12 months.
You will be hiring a total of 3 shift supervisors and a total of 45 employees (including shift supervisors) to do various manufacturing of the hips clean up shipping etc. The 45 workers will be paid as follows:
15 of the workers will be paid at the rate of $18/hour for 40 hours per week (molding specialists)
10 of the workers will be paid at the rate of $16/hour for 40 hours per week (machining specialists)
5 of the workers will be paid at the rate of $13/hour for 40 hours per week (cleaning and maintenance)
10 of the workers will be paid at the rate of $17/hour for 40 hours per week (shipping and receiving)
3 shift supervisors will be paid at the rate of $20/hour for 40 hours per week
1 plant manager will be paid a salary of $6000 per month
1 administrative/human resources person at the rate of $15/hour for 40 hours per week
Criteria for the project:
This project is meant to develop your critical thinking skills while allowing you to be creative. It is a group project so you will need to coordinate with various members of your group on how to progress with the project. Often students are reluctant to work in groups but once you are in the workplace working in a group will not be an option. You will learn together and find out more about flexibility and sharing of responsibilities with the project.
This project includes both Financial Statements and Writing.
Discuss and critically analyze whether this is a good expansion. Make recommendations and submit an Executive Summary along with the full report.