1.

How might the strategy, mission, competitive priorities and customer benefit package of the business affect their technology decision? One essential issue in the design of a production system is deciding what process to use in making the products or providing the services. The strategy for D&C car wash should consider the availability of their competitor in the market. Car wash equipment is also subject to technological change. This means D&C should determine whether new technology would do a better job for them. For example, many of the car wash company now offer wash systems with reduced cycle times, advanced network marketing capabilities, more efficient dryers and pumps, and variable frequency drives which save energy. Even if the old car wash equipment isnt worn out, most new car wash station will have something available now that will work better, faster, and more economically than what the recent car wash is presently using. In this case, the D&C would need to determine if the acquisition would lead to an increase in volume or revenue, an improvement in the image of the business, or provide a meaningful cost savings. The mission defines the company. In order to develop a long-term plan for a business, D&C must first know exactly what business they are in, what customers they are serving and what they are company values. If a company does not have a well defined mission it may pursue business opportunities about which it has no real knowledge or that are in conflict with its current pursuits, or it may miss opportunities altogether.

Decisions must emphasis priorities that support business strategy often required trade offs must focus on order qualifiers and order winners. Technology should support competitive priorities Process decisions affect what the firm achieves with the competitive priorities of quality, flexibility, time, and cost. For example, D&C can improve their ability to compete by offer the fasters services but had a quality and less cost. Customer Benefit Package can be included in their services by offering a package that comes with their services that gives an adding value to their customers. 2. What issues and problems should be anticipated with managing this business, particularly with respect to technology? What role does an operation play in successfully handling this issues and problems? A car wash that wants to stay in business must watch operational trends and avoid sticking their heads in the sand. Some of these operational components are the composition of its customers, its reputation among its customers and suppliers and its ability to attract employees. D&C car wash must keep track of its customer profile and know the demographics, buyer behavior, and the psychographic details). One way to accomplish this is through a website. The car wash can use a well designed website to advertise the business, keep track of customer purchases and learn what the customers want through customer comments and customer surveys. In addition to the website, the business needs keep up with technology in the equipment area. The most popular car washes today are the express washes. They offer more specific cleaning equipment than an in-bay automatic and are less labor intensive and faster than a full service car wash. One thing that customers want is consistency. The better the operating technology on any of the equipment, the more consistent the wash will be. The company must be actively seeking new customers and looking for ways to attract and keep them. The website is an excellent say to advertise, sell and to collect key information about its target market. The owners must invest in state-of-the-art equipment and convince its market that the quality and consistency is there. Successful car wash operators are quick to point out that by making the necessary changes to their own wash business they have been able to capitalize on competitors that have become complacent and fail to keep their appeal with their local customer base. The owners have introduced upgrades to the present operation by adding an automatic stall, upgrading the pluming and making structural enhancements. In order to stay ahead of the trend in customer power D&C car wash should consider adding various ways to purchase their service and adding high margin miscellaneous products. Knowing what the trends are will allow the owners to plan accordingly and make changes. Technological improvements may help the company comply with any regulatory changes and may also help the company become greener.

3. What does a breakeven analysis indicate about this business venture? Should Drew and Caroline go into the business? To evaluate an idea for a new product or service or to assess the performance of an existing one, determining the volume of sales at which the product or service breaks even is useful. The breakeven point is the volume at which total revenues equal total costs. Use of this technique is known as break-even analysis. Break-even analysis can also be used to compare production methods by finding the volume at which two different processes have equal total costs.

We begin with the first purpose: to evaluate the profit potential of a new or existing product or service. This technique helps the manager answer questions such as the following: Is the predicted sales volume of the product or service sufficient to break even (neither earning a profit nor sustaining a loss)? How low must the variable cost per unit be to break even, given prices and forecasts of sales? How low must the fixed cost be to break even? How do price levels affect the break-even volume? Profit/ year = $ 518.000 Cars/year = $20.000 Cost/ car = $14.62 Profit/car = $25.90 Break even sales = 1,251.000 ___________ $25.90 - $14.62 = $110.904 = 5 1/2 years break even.