In Order To Complete This Assignment, Refer To The Sc 961607

In Order To Complete This Assignment Refer To the Scenario From Assig

In order to complete this assignment, refer to the scenario from Assignment 1, as well as to the scenarios and readings from previous weeks. THIS IS SCENERIO 1: Imagine that you just created a new start-up company. You want to compete in the growing industry of drone navigation systems. VectorCal is the only major company in the field. You also want to be a leaner, faster version of a company that you view as being too slow and costly.

Note: you may create and/or make all necessary assumptions needed for the completion of this assignment. Write a two to three (2-3) page paper in which you: Predict the main costs (e.g., labor cost, material cost) associated with the production of VectorCal’s drone navigation system. Provide a rationale for your response. Compare and contrast the direct and indirect costs associated with the drone navigation system that both your company and VectorCal would assume. Predict whether or not your company could easily control these costs and thus reduce production expenses. Justify your response. Compare your company with VectorCal relative to the price of acquisition, semi-variable costs, and allocated direct and indirect costs of the drone navigation system. Justify your response. Use at least three (3) quality resources in this assignment.

Paper For Above instruction

Starting a new company in the competitive and rapidly evolving industry of drone navigation systems necessitates a thorough understanding of the cost structures involved in producing such sophisticated technology. In this context, predicting and analyzing the main costs—particularly labor and material costs—and understanding the dynamics between direct and indirect costs are crucial steps toward establishing a lean, cost-effective operation capable of competing with industry leaders like VectorCal.

Main Costs in Drone Navigation System Production

The primary costs associated with producing a drone navigation system include labor costs, material costs, research and development expenses, manufacturing overheads, and logistics costs. Labor costs constitute wages, benefits, and training for engineers and technicians involved in designing, developing, and assembling the systems. Material costs involve components such as sensors, processors, GPS modules, and casing materials. Given the technological complexity, high-quality components are essential, which often implies elevated costs. Research and development (R&D) expenses also represent a significant investment, as continuous innovation is necessary to stay competitive in this domain (García et al., 2020). Manufacturing overheads include equipment depreciation, quality control, and factory utilities, which can vary based on production scale. Logistics costs relate to sourcing materials and distributing finished products to markets.

Contrasting Direct and Indirect Costs: Your Company vs. VectorCal

Direct costs are directly attributable to the manufacturing of the drone navigation system, including materials and labor directly involved in assembly. For both your startup and VectorCal, these include sensor components, microprocessors, and labor hours dedicated to production. Indirect costs, however, encompass overhead expenses such as plant utilities, administrative salaries, and quality assurance, which are not directly tied to specific units of production. VectorCal, being an established market player, likely benefits from economies of scale, leading to lower per-unit costs in both direct and indirect categories. Your new startup, in contrast, may face higher per-unit costs due to smaller production volumes and less established supply chains (Cooper & Schindler, 2014). Nonetheless, your company can potentially control and reduce these costs through lean manufacturing practices, supplier negotiations, and process optimization, thus maintaining competitive pricing.

Cost Control and Reduction Opportunities

Your startup’s ability to control costs hinges on efficient resource management and supply chain strategies. Implementing just-in-time inventory systems can reduce material holding costs. Bulk purchasing of components might lower material costs, provided suppliers offer volume discounts. Streamlining production processes through automation can reduce labor costs and improve quality, thereby decreasing defect-related expenses. While controlling indirect costs is more challenging, strategic facility management and administrative efficiency can mitigate overhead expenses. Compared to VectorCal, your company may initially experience higher costs but can strategically leverage agility, rapid innovation, and cost-saving methods to mitigate these differences (Heizer et al., 2017).

Comparison of Company and VectorCal: Price of Acquisition and Cost Structures

The acquisition price for a new startup versus an industry leader like VectorCal vastly differs, with VectorCal likely valued higher due to its established customer base, technology, and market share. However, your startup can capitalize on semi-variable costs—expenses that vary with production volume such as overtime wages or temporary labor—which can be managed dynamically to control costs. Additionally, allocated direct and indirect costs differ between the two companies; VectorCal’s scaled operations allow for more extensive distribution of fixed costs across large production volumes, whereas your startup must allocate costs more strategically with smaller output. These factors influence pricing strategies, profit margins, and competitiveness in the market (Horngren et al., 2014).

In conclusion, understanding and managing the primary costs associated with drone navigation system production is essential for establishing a competitive startup. While VectorCal benefits from economies of scale that reduce per-unit costs, a leaner startup can offset higher initial costs through strategic cost control, process efficiencies, and targeted investments in innovation. Ultimately, careful financial management and optimization of both direct and indirect costs will determine the ability to compete effectively in this dynamic industry.

References

• Cooper, D. R., & Schindler, P. S. (2014). Business Research Methods. McGraw-Hill Education.
• García, R., Fernández, S., & Hernández, M. (2020). Cost Management in High-Tech Industries: Innovations and Challenges. Journal of Manufacturing Technology Research, 12(2), 87–105.
• Heizer, J., Render, B., & Munson, C. (2017). Operations Management. Pearson.
• Horngren, C. T., Datar, S. M., & Rajan, M. (2014). Cost Accounting: A Managerial Emphasis. Pearson.
• García, R., Fernández, S., & Hernández, M. (2020). Cost Management in High-Tech Industries: Innovations and Challenges. Journal of Manufacturing Technology Research, 12(2), 87–105.
• Kaplan, R. S., & Cooper, R. (1998). Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance. Harvard Business School Press.
• Drury, C. (2018). Management and Cost Accounting. Cengage Learning.
• Ching, R. K. (2019). Lean Manufacturing and Cost Control Strategies. Manufacturing Innovation Journal, 5(4), 123–134.
• Slack, N., Brandon-Jones, A., & Burgess, N. (2019). Operations Management. Pearson.
• Turney, P. B. (2017). Strategic Cost Management in Tech Startups. Strategic Finance, 99(7), 38–44.