Part B: Manufacturing

Session 7: The Manufacturing Process

Objectives:

Estimate manufacturing expenses Raise additional money for manufacturing

expenses Learn manufacturing techniques

Vocabulary

Assembly line Funds Interest Job shop Manufacturing Press release Stock market

Memo 7 (S17)

Complete BizWorld Memo 7 (S17) in your Student Packet

Memo 7 DiscussionMessage:Many products that are produced in large numbers utilize a manufacturing technique known as an assembly line. One example of a product commonly manufactured through the use of the assembly line process is the automobile.

1. Explain how an automobile is assembled by the assembly line process.

The assembly line is defined as a manufacturing process in which a product is assembled by many people or machines doing specific parts of production. Automobiles are assembled in this way as people or machines repeatedly perform specific task as each automobile moves along the assembly line.

2. Can you think of other products that are made by the assembly line process?

3. Identify three benefits or advantages to using the assembly line process.

Examples:a. Deceased production timeb. Decreased production costsc. Product consistency

Job Shop Process

Manufacturing is the production of goods. One manufacturing process is called job shop. Job shop is a process in which one individual

produces a product from start to finish. Can you identify goods that are produced using job

shop? What are some advantages and disadvantages of

manufacturing goods in this manner?

PRESS RELEASE!!!!

A press release is an announcement made by an organization or an individual and distributed for use by the media.

Press Release- Stock Market Update

Investors are excited about the growing friendship bracelet industry. They believe that this new industry has a large potential market and will create many jobs in Craven County. Yet, investors are still uncertain about the new companies in this field. Although many have promising prototypes, none have entered into full-scale production yet and have not generated any revenue. As a result, the friendship bracelet industry was down across the board in heavy trading yesterday. All BizWorld stock prices fell to $8 BB.

Manufacturing Expenses

Review the General Store Price List (S13) in the Student Packet.

Each company will need a total of $15-20 BB to buy string and packaging supplies (bags & tags), pay salaries, rent and possibly interest.

Raising More Capital- Bank Loan

Unlike the Venture Capitalist, banks charge interest.

Interest is a fee paid for borrowing money.

How a Bank Makes Money (C6)

Look at How a Bank Makes Money (C6) in your Company Packet.

Discuss:– The source of the bank’s revenue– The bank expenses

Venture Capitalist VS Bank (C7)

• Look at Venture Capitalist VS Bank (C7) in the Company Packet.

• Discuss:• The positive and negative aspects of borrowing

from the bank.• The positive and negative aspects of selling

shares of stock to a venture capitalist.

Is it better to sell more shares of your company or borrow money from the bank with interest for this second round of funding?

If your company borrows money from the bank, your company must repay the loans in addition to paying the interest.

Funds are defined as available money or ready cash.

The stock market is where stocks are bought and sold.

Company Choices to Raise Capital

1. If your company elects to sell more shares of stock to the Venture Capitalist, the price is $8 BB per share.– Until now, each piece of a company’s stock was worth

whatever the Venture Capitalist was willing to pay when they were sold.

– Now, each piece of the pie (stock) is only worth $8 BB.

2. Bank loans will be allocated in increments of $10 BB.

Deciding how to get more capital!

Calculate your company’s estimated expenses using price points from the General Store Price List.

VP’s of Finance will lead a discussion to determine if the company should borrow from the bank or visit the Venture Capitalist again.

VP’s of Finance will visit the Banker or the Venture Capitalist once the company has made their decision,

Reminder: All transactions must be recorded on the Company Ledger.

Manufacturing Techniques

Today your company will begin manufacturing your products. As a company, your job is to make as many products as you can with the least amount of expenses. The more products you make, the more you will have to sell at the Sales Bazaar.

On the Entrepreneurial Cycle, your company has moved from the design stage to the manufacturing stage.

Mr. Vincent’s Computers

Complete Mr. Vincent’s Computers (S18) in the Student Packet.