MicroLite S.A. is a company in Brazil that produces alkaline and zinc-carbon batteries. in 1992, the company was faced with a reduction of duties on imported manufactured goods which would mean that international competition would increase significantly. Luiz Pinto, was manager at the time, Microlite was facing the possibility of reducing the labour and production costs by closing the factory in Guarulhos, and move production to the plant in Jaboatao.
The elections that Mr. Pinto was faced with was to move the equipment to Guarulhos Jaboatao or buy new and faster. Move the equipment to minimize Jaboatao Guarulhos would capital investments and increase workflow on the reliability of the equipment. Purchases of new equipment would require more investments but reduce labor and increase production. The new tariffs were implemented in 1995 and the problems were that Mr. Pinto had to reduce labor and increase productivity in an effort to maintain the high proportion of battery of the Brazilian currently owned.
A non-production issue that Mr. Pinto is facing is from an economic aspect. One option presented to Mr. Pinto is to buy new Pan-Orient equipment. Investment in new equipment would be about $ 2 million. It is unknown from the case study how $ 2 million would be paid or funded. This, however, would affect the decision by the parties involved to accept this proposal or not.
The current situation
The current bottlenecks in the operation of AA battery operation at Jaboatao is steps "Add pasta to the cup" and "inspect the carbon rods." These two steps will work under are required by the production and would need to be corrected to improve productivity. In an effort to increase productivity, Jaboatao facility should put a machine from Guarulhos dedicated to "Add pasta to cup" production. At the same time as this ...
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