In 2009 it was decided that ABC Tire Company would implement a BPM project with the goal to decrease the manufacturing cost per tire and increase revenue from each tire sold.
To track the success (or failure) of the project they determined the following baseline data for 2009.
Total # of Tires Sold 24,594
Materials Cost Per Tires $23.21
Labor Cost Per Tire $ 11.67
Average Retail Price Per Tire $ 119.00
Average Profit Per Tire $ 84.12
After implementing the BPM project ABC Tire Company reviewed the value of the project after a year and identified the following information
Total # of Tires Sold 27.669
Total Materials Cost $672,080.32
Total Labor Cost $ 303,280.56
Average Retail Price Per Tire $121.13
Using the data provided above calculate and provide
( 1) Materials Cost Per Tire (2) Labor Cost Per Tire (3) Average Profit Per Tire (4) % Increase or Decrease in Materials cost Per Tire (5) % Increase or Decrease in Labor cost Per Tire (6) % Increase or Decrease in Average Profit Per Tire
Address the following questions:
Why is it important to ensure baseline data is accurate?
Was the project successful?