American Connector Co A Case Solution

Case Solution

If DJC can set up a plant, on the lines of its Kawasaki plant, in the United States, it will obtain colossal cost purposes of enthusiasm for unrefined material costs. According to show 7 and presentation 8, these costs will diminish, from their present figure of $14.89 per 1,000 units, to $8.93 per 1,000 units. Considering the way that rough material costs shape half of the total costs this will speak to a real threat to ACC. These cost good position will in like manner contact packaging costs resulting to DJC uses less costly reel packaging and packs 2,000 units for every reel, while ACC has a wide arrangement of packaging, from 10 unit packs to 1,500 unit reels.

Excel Calculations

Questions Covered

1. How serious is the threat of DJC to American Connector Company? How big are the cost differences between DJC’s plant and American Connector’s Sunnyvale plant? Consider both DJC’s performance in Kawasaki and its potential in the United States.

2. Create a table such as the following table on the next page:

ITEM

Product RawMat Packaging Labor(total) Electricity Depreciation Other.

3.  What doyoulearnfrom theabovetable?Diagnosethebasis of ACCcostdisadvantage.What factorsisitdueto(forexample,productmix)?Howworrisomeisthecostdisadvantage? What shouldACC do?