Rocket-Blast Case Study

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Cost management plays a major role when maintaining profit margins. Management must be able to find in which areas of a business costs must be reduced and the consequences that such reductions have in the overall company. In some situations management must change the way the work is being done in order to decrease costs while in other cases changing one supplier for another might be enough, in both situations a tradeoff will occur and the consequences will impact the company as a whole. Rocket-Blast, LLC, a beverage maker, has seen its profit margins reduced which presents a real problem for the company going forward (Precord & Macdonald, nd). Management has decided that operating costs must be reduced in order to increase profit margins to …show more content…

The company believes that reducing these detention charges will require one of two possible solutions. The first possible solution is to increase the workforce and reduce working hours in order to have more employees during the morning to unload the trailers faster thus lowering detention costs (Precord & Macdonald, nd). If hours are reduced workers might feel that other measures that affect their working conditions could be taken by management and they might join a union to prevent such measures (Precord & Macdonald, nd). A union that was present in a beverage plant in the area was the most likely choice for the workers and this union had a history of confronting management a lot (Precord & Macdonald, nd). If workers join a union the ability of management to make decisions in the long run could be undermined so increasing the workforce and reducing hours should be a solution that must be closely analyzed from a short and long term perspective. The second solution is to change the current keg supplier and/or the current syrup carrier for another that would result in lower detention charges (Precord & Macdonald, nd). Salt Lake Kegs, a keg supplier and Great Plains 3PL, a 3PL company, were being considered as alternatives to the current keg supplier and syrup carrier (Precord & Macdonald,

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