Case 1 Study Example | Topics and Well Written Essays - 1000 words - 2

1 - Case Study Example Delinquent orders have been accumulating while the company was not able to fulfill these increasing orders. Some of the Solar Feeder parts were even contracted to other suppliers with SDI only having the responsibility of assembling the parts. The company could, however, not maintain full and successful control on its sub-contractors (Brown and Abercrombie). Quality problem in the parts received from the suppliers was poor, which also facilitated the slow delivery. This factor is further attributed to the fact that it would always take SDI a lot of time to adjust the poor quality parts to the desired quality before the delivery is done. Consequently, the production process had to slow down significantly. Further much down time as well as production reject was experienced. Addressing the issue would require the management to look at the best ways to gain control over suppliers in order to quicken the parts quality and delivery. This will further boost production quality and quantity a nd hence revenue generation. Break even volume refers to the number of a product units that SDI has to sell in order for its sales revenues to equal to its total costs. In this regard, considerations of both unit costs and start-up costs are done. As for now, SDI Inc. has not achieved a breakeven of sales. The company’s costs and sales revenues need to balance in order to achieve a breakeven volume of sales (Hofstrand). From a look at the SDI financial ratios, it can easily be noticed that the company has a long way to go before achieving a breakeven volume of sales. The company is still facing losses, but not profits. The gross profit margin of the company is 59% (Brown and Abercrombie). This is based on the difference between the sales and cost of goods sold all divided by the sales. Considering that there are still other expenses/costs, which have to be deducted in the gross profits, the total costs are fur much above the sales revenue (Hofstrand). With a net