Guangdong Battery Company and Southwest Autotronics Coalition Report

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Guangdong Battery Company and Southwest
Autotronics Coalition Report

• Compiled by Team E

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INTRODUCTION

• This is a compilation of Team E evaluations of
  issues discussed by Mr.. Zhang and Mr.. Hatcher
  that they felt required greater study prior to
  contract negotiations. The ultimate goal of Team
  E is to identify the answer to each issue and
  develop a harmonious plan to optimize GBC/SA
  profits and goodwill in the markets and
  communities GBC/SA will impact. This is a
  collection of our humble opinions and our
  quantifiable data for each issue. The following
  table lists the issues as they are addressed.

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INTRODUCTION

• ISSUES
• 1. Simulation of Guangdong Battery Company
  Production Costs for the proposed new battery.
• 2. A consolidation of the calculations of the
  expected values for the proposed new battery.
  
• 3. The optimal solution for Guangdong Battery
  Company distribution and factory construction.
• 4. Evaluation of environmental and ethical issues
  pertaining to locations of plant construction and
  responsible handling of chemical by-product
  disposal.
• 5. Evaluation of cultural matters VP Jennifer
  Gonzales must educate herself on prior to
  entering contract negotiations.
• 6. Suggestion to type of organizational structure
  GBC/SA should enter into.
• 7. Evaluation of communication technology and
  structure to use in optimizing information flow
  between globally dispersed management,
  production, and sales locations.
• 8. Estimated Southwest Autotronics battery sales
  for 1997 in Latin America.
  

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1. GBC New Battery Production Estimates
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1. GBC New Battery Production Estimates
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2. GBC New Battery Production Estimate
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3. Minimization of Total Cost for Distribution
and Factory Construction.
The total distribution and factory construction
costs for GBC would be 860,000.00. The optimum
solution arrived at is the construction of only
one plant at Shaoguan. The construction of this
plant with a projected capacity of 40,000
batteries combined with the 30,000 batteries
produced at Yanpu meets the combined demand of
70,000 batteries for Guangzhou, Hong Kong, and
Macao. Production of batteries for markets in
South America would require a reevaluation of
constructing new factories or the expansion of
the Yanpu and Shaoguan factories.
Total Construction and Transportation Cost
860,000.00
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4.Discuss the environmental and ethical issues
raised.
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5. Discuss cultural matters that Jennifer
Gonzales will face upon her visit to Yanpu. What
advice does she need in order to be successful?
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6. If SA buys a 50 equity interest in GBC, what
type of organizational structure should GBC
adopt?

• The Equity Method should be used for accounting
  for GBC/SA assets. The 50 equity SA holds in
  GBC stock will be reflected in SAs accounts with
  appropriate notation.
• The organizational structure of GBC should
  convert to a board of directors with GBC and SA
  managers as members of the board. A set of board
  of directors procedures should be established
  prior to implementation and is a key
  administrative factor to be discussed in
  negotiations.

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7. Given evolving technologies, what advice can
you give regarding methods of communication
between GBC and SA?
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8. Estimated Southwest Autotronics battery
sales for 1997 in Latin America.
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8. Estimated Southwest Autotronics battery
sales for 1997 in Latin America.
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8. Estimated Southwest Autotronics battery
sales for 1997 in Latin America.
As a check to the exponential smoothing method,
the moving averages and weighted moving averages
methods were used. The resulting forecasts for
1997 battery sales were 65,550 when the moving
averages method was used, and 65,565 with the
data weighted .47 for the more distant year and
.53 for the more recent year when the weighted
moving averages method was used. The exponential
smoothing method resulted in a forecast of
battery sales of 65,562. We believe the
forecasts are valid with a variance of 12
batteries.