Question

1. Review your capital budget, which includes plans for a new laboratory (you can select a lab type more suitable to your organization(Radlab)if you wish) and a substantial expansion of the current lab so that its research capacity is increased by one-third, and
   
2. Review your facility O&M budget search for opportunities to assist her initiative in a significant way.

Recognizing that you might need to make a number of assumptions, complete the following assignment. Document any assumptions if they are necessary.

Prepare a memo to the CFO. Use APA 6th edition style for writing the memo. Discuss the following:

1. Identify three viable strategies, using concepts explained in this week's reading, to grow the organization's return on net assets (RONA).
2. For each strategy, discuss the following:
   1. Describe its impact on the Financial Asset Management (FAM) Financial Model and its impact on the research facility operations and maintenance (O&M) budget. Use a life cycle perspective in terms of characterizing the impact of the respective strategies.
   2. Describe the benefits and any risk associated with each strategy.
   3. Explain the implications of each strategy on the organization's financial goals consisting of the list in Section 5.1.2 of this week's reading.
3. Make a recommendation regarding the best strategy. Explain how it represents the optimal balance between financial benefit and operational, safety and political factors.

**one page

Answer 1

1. Reduce defects – both on the shop floor and front office using six sigma and things like poka-yoke and the often forgotten pillar of the Toyota Production System jidoka (Reduces Expenses).
2. Increase throughput by using tools like Value Stream Mapping with extra emphasis on flow. This assumes, of course, the market is not a constraint (Increases Sales and Reduces Assets as inventory turns increase).
3. Implement pull systems ensuring we only produce what the customer wants when they want it which lowers inventory (Reduces Assets).
4. Implement TPM ensuring machines are available when we need them to be (Increases Sales).
5. While on the TPM journey ensure OEE is being tracked and improved (Increases Sales).
6. Become obsessed with kaizen (Reduces both Expenses and Assets and can also Increase Sales).