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Plant C is part of a large, national, multi-facility hardwood manufacturing company that sells logs, lumber and flooring around the world, producing more than 100 million board feet of lumber and 10 million square feet of flooring annually. Most of their raw material comes from their own production facilities. However, some raw material comes from external suppliers. Most of their flooring production consists of 2.25” and 3.25” wide red and white oak pre- finished and un-finished flooring. An important aspect is that the company consists of a team formed by professionals in the areas of Lean Manufacturing, Statistical Process Control and Six Sigma, with the goal to have Continuous Improvement. Plant D is a family business that produces unfinished and prefinished 2.25” and 3.25” wide red and white oak flooring. Flooring is their only business and all raw materials are purchased outside the company. After the two companies were selected, the cost data obtained in section 3.1 for objective 1 was used to develop a cash flow analysis. Data was gathered for one 3.25” wide red oak flooring production line for both case studies. A cash flow can be defined as the schedule of payments for a certain period a business has to make in order to build a project. Microsoft Excel was used for the cash flow analysis. The formulas used to calculate total costs and depreciation are shown in Appendix II. Some assumptions were made to be able to estimate the rest of the variables for the cash flow analysis. These assumptions are summarized below: 1. Sales increase rate is of 4% per year. 2. Bank business loans go from $25,000 to $2,000,000, and they provide 80% of the requested value. For the companies we will assume that a loan of $2,000,000 was made where the bank approved 80% corresponding to $1,600,000 with an interest rate of 9%. The steps proposed by Keown et al. (2006) were used to develop the cash flow, which are the following: 1. Operating Activities 2. Investing Activities 46PDF Image | Impact of Vacuum-Drying on Efficiency of Hardwood Products
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