| dc.description.abstract | The purpose of this project is to reduce labor costs through the consolidation of large sheet processes into the Beta and Alpha manufacturing plants. The consolidation of equipment and departments will allow for the reduction of indirect labor personnel who are duplicated between the plants. Costs will also be reduced through increased efficiencies and make-ready reductions.
The relocation of A, B, C, and D to the Alpha plant will create a more effective manufacturing division. B equipment from Alpha would move to the Beta plant to create a production center of excellence. The consolidation will allow each plant to focus on the processes in which they excel. This realignment of resources will reduce overall manufacturing costs to help manufacturing remain globally competitive. XYZ will also be able to deliver products to the marketplace faster, cheaper, and higher quality utilizing its current plants and assets.
Using the XYZ financial model for the most likely situation shows that with an investment of $776,800, the net present value (NPV) will be $2,386,170 and have a payback of 2.0 yrs. The after tax rate of return will be 67.8% with a weighted return on assets managed of 1035.1%.
The recommendation is for the approval of this appropriation for the amount of $776,800. This will allow for the relocation of 14 presses between the Beta, Alpha, and Gamma plants, as well as, any other necessary moves to support this proposal. | |
