Evaluate the benefits of investment as a means of increasing capacity utilisation.
If capacity utilisation is low, the fixed costs per unit may become too high and force the business into bankruptcy.
Hmm I don't seem to have defined the key terms - not so good....
There are many inputs affecting productivity and if investment is made in any of them, there should be improved outputs or productivity which will increase capacity utilisation.
Yeah that sounds OK - but I haven't said what capacity utilisation is yet...hmmm but what would I do with these increased oututs - and what's this got to do with the case study?
Materials and design. A new mini was designed, creating new demand for the product.
Yes so I wonder...is this increasing capacity utilisation (whatever that is)?
Silentnight introduced new retro designs in colourful patterns thereby creating new market.
So this probably increased capacity utilisation...Ok.......
Tools and equipment. Mini invested in up to date equipment i.e. robots which cut the production costs significantly. This helped increase capacity utilisation but meant many employees lost their jobs.
I am not sure if I have explained HOW this increased capacity utilisation (whatever that is)
People and management. Although BMW made many people redundant, their investment in designing and developing a new Mini meant they employed trained workforce with the necessary skills to produce a new car.
I reckon that may be a benefit then...hmm...have I evaluated it?
Likewise, Silentnight invested in a good marketing team to develop the new strategies to advertise the bed, involve a fashion designer in developing new designs and linking with football and rugby clubs to stress the benefit of a good night’s sleep.
OK this refers to the case study, which is good. I am not sure whether this says the investment is successful though - and if not then I don't see how there's any evaluation...
Knowledge. Both BMW and Silentnight invested in a workforce with the right knowledge and expertise in the appropriate areas of the business in order to maximise productivity and help the companies reach their capacity utilisation.
As I STILL don't know what capacity utilisation is.....the benefits of the investment...hmmm...did it lead to an increase in profits? Not sure...
Processes and systems. BMW and Silentnight made investment in making sure procedures were put in place to guarantee the organisations effectiveness in managing the new initiatives and changes.
There were many changes made to both companies and everyone working there had to adapt, co-operate, change and be motivated for the companies to succeed. Investment in all these areas meant that there would be an increased volume in output and quality, lower unit costs and more profit/sales. Both companies would have increased their capacity utilisation.
OK I see that they have increased capacity utilisation (whatever that is) but has the investment been evaluated? I wonder how significant the benefits were? I wonder if this was short term or long term? I wonder how this affected stakeholders...
Hmm I don't see much evaluation...
