Раскрытые темы по английскому / Topic_4_The_factory_extention

The factory extension

There are two main purposes for expanding the factory: manager may plan to expand the factory for new equipment same types that firm already has it is an extensive way to increase production or for to produce a new product. Also manager may plan to expand the factory to create a new department (it may be sales department or garage etc.)

For the first purpose the main causes to extend the factory are:

1. Firm grows as the number of orders increases and there is no space in the workshop to place certain equipment to fulfill the orders but there is no modern more efficient equipment that takes up the same space;

2. The production of a new product may demand completely new equipment that may require new quarters;

3. There are different politics of storing: large or tiny reserve. Therefore expanding the production department need or need not expanding of a store.

For the second purpose the main causes to extend the factory are:

1. Firm may open up a new market, for ex. foreign, and new marketing department is needed.

2. Personnel may increase by other reasons and need additionally space for canteen or garage for ex.

Chairman may say that:

1. Chairman check three ratios:

   1. Period of investment project (many managers don’t prefer long-time projects);

   2. Profitability of the project (level of income should be higher than average yield per capital of the firm);

   3. Source of funding the project.

2. Chairman may has different strategic plans on this aspect firm’s development;

3. funding source of a capital construction is a net profit, such expenditure reduces dividends per share, and therefore should be approve by shareholders.