The auto industry is one of the largest and most important industries in the world, providing people with transportation, jobs, and economic growth. Behind every car, there is a complex system of parts and components that make it run smoothly. Morrow Company is one of the leading manufacturers of auto parts for automakers and parts distributors, providing the power behind your ride.
Revving Up the Auto Industry One Part at a Time: Morrow Company
Morrow Company has a long history of providing high-quality auto parts to the industry, dating back to 1927. Over the years, they have expanded their operations to become a major player in the market, with a wide range of products and services that cater to the needs of automakers and parts distributors alike.
Their product line includes everything from engine components and fuel systems to brake pads and steering parts. They use state-of-the-art technology and innovative manufacturing processes to ensure that their parts are reliable, efficient, and cost-effective. Morrow Company is committed to meeting the ever-changing needs of the auto industry, and they are constantly developing new products and processes to stay ahead of the competition.
The Power Behind Your Ride: Morrow Company’s Auto Parts
When you step into your car and turn the key, you expect it to start up and run smoothly. That’s thanks to the hard work and dedication of companies like Morrow Company, who provide the critical auto parts that make it all possible. Their parts are designed to meet the highest standards of performance and safety, ensuring that your ride is both reliable and enjoyable.
Morrow Company’s auto parts are used by some of the biggest names in the industry, including Ford, General Motors, and Chrysler. They are also used by a wide range of parts distributors and independent repair shops, providing the power behind every car on the road. With their focus on quality, innovation, and customer service, Morrow Company is a trusted partner in the auto industry, helping to keep the world moving forward one part at a time.
In conclusion, Morrow Company is a true powerhouse in the auto industry, providing the critical parts that keep cars running smoothly and safely. Their commitment to innovation, quality, and customer service has made them a trusted partner for automakers and parts distributors around the world. Whether you’re a car enthusiast or just someone who relies on their vehicle to get around, you can rest assured that Morrow Company is working hard behind the scenes to keep you moving forward.
Morrow Company is a large manufacturer of auto parts for automakers and parts distributors. Although Morrow has plants throughout the world, most are in North America. Morrow is known for the quality of its parts and for the reliability of its operations. Customers receive their orders in a timely manner and there are no errors in the shipment or billing of these orders. For these reasons, Morrow has prospered in a business that is very competitive, with competitors such as Delphi, Visteon, and others. Morrow just received an order for 100 auto parts from National Motors Corp., a major auto manufacturer. National proposed a $1,500 selling price per part. Morrow usually earned 20 per cent operating margin as a percent of sales. Morrow recently decided to use target costing in pricing its products. An examination of the production costs by the engineers and accountants showed that this part was assigned a standard full cost of $1,425 per part (this includes $1,000 production, $200 marketing, and $225 general and administration costs per part). Morrow’s Value Assessment Group (VAG) undertook a cost reduction program for this part. Two production areas that were investigated were the defective unit rate and the tooling costs. The $1,000 production costs included a normal defective cost of $85 per part. Group leaders suggested that production changes could reduce defective cost to $25 per part. Forty-five tools were used to make the auto part. The group discovered that the number of tools could be reduced to 30 and less expensive tools could be used on this part to meet National’s product specifications. These changes saved an additional $105 of production cost per part. By studying other problem areas, the group found that general and administration costs could be reduced by
$50 per unit through use of electronic data interchange with suppliers and just-in-time inventory management. In addition, Morrow’s sales manager told the group that National might be willing to pay a higher selling price because of Morrow’s quality reputation and reliability. He believed National’s proposed price was a starting point for negotiations. Of course, National had made the same offer to some of Morrow’s competitors.
1. What should be Morrow’s target cost per auto part? Explain.
2. As a result of the Value Engineering Group’s efforts, determine Morrow’s estimated cost for the auto part. Will Morrow meet the target cost for the part? Do you recommend that Morrow take the National offer? Explain your reasons.
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