isds term project edit loie final[1]
TRANSCRIPT
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8/7/2019 ISDS Term Project Edit Loie Final[1]
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Term Project
ISDS 7313 Global Operations Management
Dr. Ernest Nichols
December 3, 2010
By
Nicci Osborne
Robin Steele
Loie Walters Watkins Formatted:Font color: Red, StrikethroughFormatted:Not Strikethrough
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Table of Contents
Business Objectives................................ ................................ ................................ ................................ .2
Market Assumptions ................................ ................................ ................................ ............................... 3
Product Description ................................ ................................ ................................ ................................ 5
Facility Location and Layout ................................ ................................ ................................ .................... 7
Supply Chain and Inventory ................................ ................................ ................................ .................... 9
Total Quality Management Systems ................................ ................................ ................................ ..... 11
Operations Strategy ................................ ................................ ................................ .............................. 12
Competitive Priorities ................................ ................................ ................................ ........................ 13
Core Competencies ................................ ................................ ................................ ............................ 14
Order Winner ................................ ................................ ................................ ................................ .... 15
Order Qualif ier ................................ ................................ ................................ ................................ .. 15
Positioning the Firm ................................ ................................ ................................ .......................... 16
Manufacturing and Costs ................................ ................................ ................................ .................. 16
Process Choice ................................ ................................ ................................ ................................ ...... 16
Capacity Determination ................................ ................................ ................................ ........................ 17
Conclusion................................ ................................ ................................ ................................ ............. 18
References ................................ ................................ ................................ ................................ ............ 20
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Business Objectives
W
h
he r
ng ue of
echno
ogy
n var
ou
f
ed
,
apparen
ha
he demand for energy w
ncrea e a we . ur echno og
ca advance have made
fe much ea
er for u , bu hey have
a o pu a ra
n on he env
ronmen . any of he e echno og
ca dev
ce opera e on energy ha
genera
ed
hrough harmfu
ac
uch a
burn
ng coa, wh
ch reea
e
dangerou
ox
n
no
he
env
ronmen. A
hough
h
me
hod
very co
eff
c
en
for c
e
w
h
ead
y
ncrea
ng
popua
on,
no
wor
h
he harm
nf
ced upon
he env
ronmen. A good examp
e of
h
ncrea ed need for energy can be found
n Ch
na where he popu a
on ha r
en from
approx
ma e y 560,000,000
n 1950 o 1,331,534,117
n 2010. (CIT ). ecau e Ch
na ha an
abundance of coa ,
ha become he
r pr
mary ource of energy. A hough coa
co eff
c
en ,
here are ome er
ou concern when exam
n
ng he env
ronmen a effec of burn
ng h
fue .
ue
o var
ou
gae
be
ng reea
ed
no
he env
ronmen
a
a reu
of energy prac
ce
uch a
he bur
ngburn
ng of coa , he eve of carbon d
ox
de and greenhou e ga e ha grown
exponen
a
y and ha
beguno affec
he
ar
h
c
mae.
o
ar
ce cap
have beguno
hr
nk
and here ha been an
ncrea e
n he number of v
o en orm around he g obe. wh
chThe e are
a
conequence
of
he
e harmfu
ga
e
po
u
nghe env
ronmen. The
e
ame energy prob
em
are a o pre en
n he Un
ed a e , he wor d eader
n energy con ump
on. The e prob em
have cau ed Amer
can o re y on more renewab e ource of energy o decrea e he u e of non-
renewabe energy
ource
ha
are dep
e
ng a
a rap
d rae.
emand
ncrea
ng acro
he
wor d, bu upp y rema
n he ame. Th
mean ha a peop e mu f
nd a erna e me hod of
crea
ng energy. In
a
ve
uch a
former V
ce-
re
den
A
ore
o
reen campa
gn have
been formedo coun
erac
he damage we have done
o our env
ronmen. He
ore
ugge
ed
ugge ha we beg
n ax
ng b
g corpora
on who are of en re pon
b e for em
ng arge
amoun of he e ox
n hrough from he
r fac or
e . The propo a wa ha no been we
rece
ved by many compan
e c
a
m
ng who ca
mha
hey wou
d be
axed ba
ed on
unju
f
abe rea
on
.
A reen ec r
c we w
manufac ure, d
r
bu e, and ma
n a
n hydrok
ne
c urb
ne ha
generae energy
hrough
he
eady movemen
of r
ver
and oher wa
erway
.
ur ma
n
objec
ve
o reduce
he po
u
an
ha
are be
ng reea
ed
no
he env
ronmen
by offer
ng an
a erna
ve ha
bo h co effec
ve and econom
ca y fr
end y. To a
our organ
za
on
n he
effor of opera
ng
n a way ha
no harmfu un afe o he env
ronmen , we w
par ner w
h
ee producer Arce or
a . ur paper w
nc ude an ana y
of hree major ee compan
e
ha we ana yzed o arr
ve a h
conc u
on. Th
company ma
n a
n
m
ar ph
o oph
e o
ha
of
reen
ec
r
c.,
n
ha
They be
eve
n opera
ng
n a way
ha
env
ronmen
a
yconc
ou. They haveArce
or
a
emp
oy
evera
env
ronmena
manager
who
e
o
e
purpo e
o mon
or he env
ronmen a affec effec of he
r produc
on proce e are hav
ng
onhe env
ronmen and
o dev
e and
mpemen
way
ha
n wh
chhey can reduce
he
e
Comment [M1]: To whom are you referring iregards to making tech advances and having an
easier life? USA? World population?
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3
affec . The r da aba e con an y con en y mon or a r, wa er, energy and wa e da a fromfac
e
wor
dw
de. The company-w
de
n
rane
y
em a
ow
h
da
a
o be ava
ab
e
o every
empoyee a
any g
ven
me. I
a
o a
ow
emp
oyee
o
ay upda
ed up
o da
e on emerg
ng
echno og e , regu a ory change and he a e re earch ud e . Arce or a a o focu e on
produc ng ee ha u a nab e.,Th he p ower u age of non-renewab e re ource . o ha
hey w no have o con nuou y u e non-renewab e re ource o re-produce ee for he ame
purpoe
. Th
env
ronmen
a
awarene
wha
make
Arce
or
a
a grea
an
dea
upp
er
for
reen
ecr
c.
ur
m
ar ph
o
oph
e
w
a
ow u
o work co
abora
ve
y
o produce a
produc
ha
nnova
ve and
u
a
nab
e. We hope
ha
o
her compan
e
w
ake heed of
m rrorour proce e and do he ame for he r own compan e mp emen /adop m ar ra eg e
n
he energy and o
her
ndu
r
e
.
ur goa o make h co abora on a permanen par ner h p be ween compan e who depend
on each o her o opera e a he r op mum eve . A hough reen ec r c a new company, we
are confden
ha
he hydrok
ne
c
urb
ne
an
nnova
ve produc
ha
w
on
y become more
re evan / ne a c a we head n o he fu ure. We wan o par ner w h a we -known upp er
uch a Arce or a ear y becau e hey w g ve u he ab y and he cred b y ha we w
need a
a new company. Inve
or
w
have more confdence
n our produc
know
ng
ha
wa
produced u
ng Arceor
a
ma
er
a
. If
h
par
ner
h
p
benef
c
a
o bo
h compan
e
, we
w
con
dermore furherco
abora
on for produc
n
he fu
ure.
From a revenue per pec ve, we are conf den ha h produc w be very prof ab e and a goodnve
men
for any po
en
a
nve
or
oppor
un
y. The ma
n componen
of
h
urb
ne
he
reene Turb
ne are concre
e and
ee
, wh
ch are bo
h very
nexpen
ve renewab
e re
ource
.
ecau e of he e co effec ve componen we e ma e ha he produc on of a 250-foo urb new
co
approx
ma
e
y
x m
on do
ar
. Th
a
o
much
e
expen
ve
han
urb
ne
of a
m ar na ure ha re y on expen ve mechan ca genera or o con nuou y opera e on acon nuou ba . Wh e one can never be ure of how much energy w be genera ed over me;e
ma
e
how
ha
he
e
urb
ne
hou
d w
genera
e $2 m
on do
ar
per year wor
h of
e ec r c y. W h a 30-year produc fe-cyc e ha w genera e abou approx ma e y $60 m ondo ar per urb ne. Co of e ec r c y a con an y chang ng var ab e ha con an ychang ng, bu we e ma e ha e ec r c compan e w pay u 4-5 cen per k owa , wherea co
abou
2 cen
per k
owa
o produce. There
obv
ou
y a grea
prof
o be made
f
he
e
e
mae
prove correc
. We are a
ready curren
y
n nego
a
on
w
h
he TVA (Tenne
ee
Va ey Au hor y) (TVA) ec r c Company concern ng a mu -year con rac for he r gh o oure
ec
r
c
y produced v
a
reene Turb
ne
.TVA
TVA
owned by
he U.
!. governmen
and
a hough a corpora on, hey don make prof or rece ve money from axpayer . TVA hee ec r c y prov der for A abama, eorg a, Ken ucky, pp ,
"
or h Caro na, Tenne ee andV
rg
n
a
erv
c
ng 9 m
on peop
e (www.
va.gov/abou
va).
The ac
ua
mode
of
he
reene
Turb
ne
a comp
e
e
y new
nven
on
ha
we have pa
en
edand wou d ke o expand ou de of he Un ed ! a e g oba y o o her coun r e . Th a
produc
ha
h
gh
y popu
a
ed area
uch a
Ch
na wou
d grea
y benef
from
f u
ed correc
y.
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Fo # # ow$ ng our p $ # o% projec% and a & econd-pha& e projec% % o % ake p # ace $ n % he ' u# f of ( ex$ co,'
reen) #
ec%r
$c p
#an
&
%o go g
#oba
#w
$ %h
%he
'reen Turb
$ne. Ch
$na w
$ # #be our f
$r
& %
$n
%erna
% $ona
#
# oca% $ on.
Market Assumptions
We expec0
0ha
0
0he marke
0w
1 2 2re
3pond po
3 1 0 1 ve
2y
0o our produc
0becau
3e
1 0
1 3
3ome
0h
1ng
0ha
0
1 3
needed. The mo3 0 popu2 ar way 0 o genera 0 e energy 1 3 0 hrough burn1 ng coa 2 , bu 0 a 0 0 he curren 0 ra 0 e
of con 3 ump0 1 on we w1 2 2 even0 ua2 2 y run ou0 of 0 h1 3 non-renewab2 e re 3 ource. The hydrok1 ne0 1 c
0 urb1 ne prov 1 de3 3 o many benef1 0 3 0 o peop2 e and 1 0 1 3 a produc 0 0 ha0 w1 2 2 on2 y become more
va2 uab2 e a3 0 he wor2 d popu2 a0 1 on con0 1 nue3 0 o 1 ncrea 3 e. 4 f cour3 e 0 here are a 2 ready vVar1 ou3
0
ype3
ofhydrok1
ne0 1
c0
urb1
ne3
0
ha0
have ju3 0
recen0 2
y begun0
o makemade a p2
ace for0
hem3
e2
ve3
1n
0he marke
0, bu
0we fee
2
0ha
0our produc
0
1 3un
1que and ha
3
0he capab
1 2 1 0 y of pene
0ra
0 1nge
3an
un0apped marke
0. The objec
0
1 3no
0
0o compe
0e, bu
0ra
0her
0o prov
1de an a
2 0erna
0 1ve
0o
0he u
3ua
2
mechan1 3 m of genera 0 1 ng energy. 4 nce peop2 e 3 ee 0 he benef1 0 3 of our produc0 , we are conf1 den0
0 ha0 1 0 w1 2 2 be 3 ucce 3 3 fu2 .
5 1m
1 2ar produc
0 3 4 0 her renewab
2e energy
0echno
2og
1e
3a
2ready
1n
0he marke
0
1nc
2ude
0he
3o
2ar
0 urb1 ne, 0 he w 1 nd 0 urb1 ne, and o0 her form3 of hydra-power genera 0 ed 0 urb1 ne3 . The 3 e produc0 3
ma1n
2y
3erve
0he
3ame purpo
3e bu
0
0hey have very d
1fferen
0way
3of genera
0 1ng energy. The
b1gge
3 0d
1fference be
0ween our produc
0and o
0her produc
0 3
1n
0he marke
0
1 3
0ha
0
0he hydrok
1ne
0 1c
0 urb1 ne 1 3 con3 0 an0 2 y genera0 1 nge3 energy. Un2 1 ke 0 he 3 un wh1 ch 3 e0 3 and 0 he w1 nd 0 ha0 cea3 e 3 0 o
b2ow,
0he curren
0 3of our r
1ver
3and ocean
3are
1n con
0 1nua
2mo
0 1on. Th
1 3w
1 2 2be an advan
0age
1n
0 he marke 0 becau3 e many governmen0 agenc 1 e 3 are 2 ook1 ng for way3 0 o con 3 0 an0 2 y genera0 e
energy. W1 0 h popu 2 a 0 1 on3 grow 1 ng a 0 3 uch a rap 1 d ra0 e 1 0 1 3 no0 enough 0 o 3 1 mp2 y add moreenergy -crea 0 1 ng re 3 ource 3 , bu 0 we mu3 0 f1 nd way3 0 o 1 ncrea3 e 0 he u3 e of0 he3 e re 3 ource 3 . 5 0 ud1 e3
3how
0ha
0becau
3e of
0h
1 3con
3 0an
0genera
0 1ng of energy, hydrok
1ne
0 1c
0urb
1ne
3are 200
0 1me
3
more powerfu2
0han w
1nd
0urb
1ne
3. A
2 0hough
3o
2ar
0urb
1ne
3have proven
0o be
3ucce
3 3fu
2
1n
3 0 a 0 e 3 3 uch a 3 F2 or1 da, 0 he1 r ma1 n prob2 em 1 3 0 ha0 0 hey are h 1 gh2 y expen3 1 ve 0 o 1 mp2 emen0 . (C1 0 e?)
In recen0 3 0 ud1 e 3 , 0 he U. 5 . 6 epar0 men0 of 7 nergy ha 3 1 den0 1 f1 ed over 500,000 po0 en0 1 a2 3 1 0 e 3
where hydropower can be1mp
2emen
0ed.
7 3 0 1 ma
0e
3
3ugge
3 0
0ha
0
0he amoun
0of energy cap
0ured
wou2d be enough
0o power over 67 m
1 2 2 1 on home
3. A 1986
3 0udy by
8
ew York Un1ver
3 1 0y of
free-f2 ow r1 ver power 1 n 0 he U5 A e 3 0 1 ma0 ed con 3 erva0 1 ve2 y 0 ha0 0 here 1 3 12,500 9 W of
undeve2 oped capac1 0 y for energy. Th1 3 1 3 wor0 h abou0 $10 b1 2 2 1 on 1 n e 2 ec0 r1 c1 0 y 3 a 2 e 3 0 oday and
equ1 va2 en0 0 o d1 3 p 2 ac1 ng 22 coa2 -f1 red power p 2 an0 3 (CIT 7 ). A3 0 he demand for energy
con0 1
nue3
0o
1ncrea
3e, we an
0 1c
1pa
0e con
3ump
0 1on
0o
1ncrea
3e by 57% from 2204
0o 2030. Th
1 3
e 3 0 1 ma0 e on 2 y con 3 1 der3 0 he curren0 amoun0 of e2 ec0 r1 c1 0 y u3 age 1 n compar1 3 on 0 o 0 he popu 2 a 0 1 on,
wh1ch
1 3expec
0ed
0o dra
3 0 1ca
2 2y
1ncrea
3e. I
0doe
3no
0
0ake
1n
0o accoun
0
0he r
1 3e
1n popu
2ar
1 0y of
produc0 3 3 uch a 3 e2 ec0 r1 c-car3 , wh 1 ch w1 2 2 cau3 e 0 he demand for e 2 ec 0 r1 c1 0 y 0 o 1 ncrea 3 e fa 3 0 er 0 han
Comment [M2]: Citehttp://www.ucsusa.org/clean_energy/technology
nd_impacts/energy_technologies/how-
hydrokinetic-energy-works.html
Comment [M3]: Citehttp://www.hydrovolts.com/opportunity.htm
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5
expec@ ed. To comba@ @ he need for A ncrea B ed pe@ ro C eum uB age, many au @ omob A C e companA e B arere
Bor
@ Ang
@o car
B
Buch a
B
@he Hybr
Ad, wh
Ach opera
@e par
@ Cy par
@ Aa
C Cy on e
Cec
@r
Ac
A @y. A
C @hough
@h
A B
Beem
B
C Ake a good
Adea becau
Be
A @decrea
Be
B
@he amoun
@of
@ox
An
Bem
A @ @ed from burn
Ang ga
Be
B,
A @
a C B o requ A re B @ ha@ we fA nd more wayB @ o genera@ e e C ec @ rA cA @ y. Th A B A B ano@ her rea B on why our
produc@ A B needed A n @ he marke @ pC ace. We an@ A cA pa @ e @ here @ o be a C earn A ng curve for @ hoB e who
do no@ underB @ and how @ he @ urbA ne opera @ e B , bu@ once @ hA B A nforma @ A on A B underB @ ood we expec@
grea@
Bucce
B B.
HydrokA ne@ A c energy A B a grea @ oppor@ unA @ y becau B e @ he majorA @ y of @ he popuC a @ A on C A veB A n c C oB e
proxA mA @ y @ o B ome @ ype of movA ng body of wa @ er. The pro B pec@ of crea @ A ng renewabC e energy
wA C C
be benefAc
Aa
Con a g
Coba
C
Bca
Ce.
Dany
@h
Ard-wor
Cd coun
@r
Ae
Bare f
A C Ced w
A @h
Bma
C Cv
A C Cage
B
@ha
@are
Coca
@ed on
@he bank
Bof r
Aver
B, cana
C B, and o
@her wa
@erway
B. They depend on
@he
Be
wa@ erwayB @ o B uppor@ @ heA r agrA cuC @ ure, cuC @ uraC , and even @ heA r @ ranB por@ a @ A on needB . E ecau B e
many of @ he B e peopC e are C oca@ ed A n remo@ e area B of @ he worC d @ hey do no @ have acce B B @ o energy
Bource
B. The pre
Bence of
@he
Be wa
@erway
Ba
C Cow
Bfor energy
@o be crea
@ed
@hrough our
hydrokA ne@ A c @ urbA neB . We eB @ A ma@ e @ ha@ a B maC C @ urbA ne of 20-fee @ A n d A ame@ er wouC d B @ A C C be abC e
@ o genera @ e 2-3 megawa @ @ B of power. F ven A f @ he energy crea @ ed A B on a much B maC C er B ca C e, A @
wouCd
B @ A C C be enough
@o power a
Bma
C Cv
A C Cage.
A concern we have abou@
@he
Amp
Cemen
@a
@ Aon of our produc
@
A Bwhere
@he governmen
@w
A C Ca
C Cow
uB
@o p
Cace
@he
Be hydrok
Ane
@ Ac
@urb
Ane
B.
Eecau
Be
@hey re
Cy on
@he na
@ura
Cmovemen
@of wa
@er we
wan@
@o p
Cace
@hem
An
Bome of
@he fa
B @er mov
Ang r
Aver
B
An
@he Un
A @ed
G @a
@e
B. We have
Aden
@ Af
Aed
po@ en@ A a C p C acemen @ C oca@ A on B a B @ he D A B B A B B A ppA H A ver, @ he CoC orado H A ver, and @ he Ye C C owB @ one
H A ver. The B e rA verB are known for @ heA r fa B @ -movA ng curren@ B @ ha@ wA C C be benefA cA a C A n genera @ A ng
hA gh amoun @ B of energy. TheB e pubC A c rA verB are ma A n @ a A ned by @ he governmen@ v A a @ he U. G .
CorpB
ofF
ngAneer
B;
@herefore, we mu
B @have perm
A B B A on
@o p
Cace our
@urb
Ane
B
An
@he
Be wa
@er
B.
The governmen@
muB @
A B Bue perm
A @ B
@ha
@a
C Cow compan
Ae
B
@o p
Cace
@he
Ar produc
@ B
An pub
C Ac r
Aver
B.
HA B @ orA caC C y, The Federa C F nergy H eguC a @ ory CommA B B A on (FF H C) ha B maA n @ a A ned B @ rA c @
guA deC A neB on @ hA B new A nduB @ ry and where @ urbA ne B can be p C aced. For@ una@ e C y @ hey have
C A gh@ ened up on @ heB e reB @ rA c@ A onB becau B e @ hey reaC A ze @ he benefA @ B of@ heB e @ urbA neB .
Eecau
Be
@he
Ireene Turb
Ane
A Bye
@
@o be
Amp
Cemen
@ed for fu
C Cu
Be
An
@he Un
A @ed
G @a
@e
B,
@he f
Ar
B @
@ urbA ne @ ha@ A B A mpC emen@ ed wA C C be conB A dered @ he pA C o@ projec@ . P A C o@ projec@ mean B @ ha@ @ he
fA rB @ @ urbA ne wA C C be B een a B an experA men@ a C @ rA a C run andwA @ h @ he re B uC @ B wA C C be cC oB e C y
monA @
ored. The requAremen
@ B
@o be
A B Bued a perm
A @are by
@he F
F HC for a hydrok
Ane
@ Ac p
A Co
@
projec@
A B
@ha
@
@he projec
@
A B
Bma
C C
An capac
A @y (equa
C
@o or
Ce
B B
@han 5 megawa
@ @ B).
Projec
@
B A @e
B
are @ o avo A d B en B A @ A ve and po@ en@ A a C C y hazardou B C oca@ A onB . The projec @ draf@ appC A ca@ A on @ ha@ A B
Bubm
A @ @ed for approva
Cmu
B @
Anc
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Comment [M4]: Citehttp://www.hydrovolts.com/opportunity.htm
Comment [A5]: I thought Jeffrey said that he
didnt need a permit for the river, but only for th
gulf of mexico (?)
Comment [A6]: reword
Comment [A7]: Reword
Comment [A8]: ?
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6
Product Description
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Comment [A9]: What about the man-madeturbine?
Comment [A10]: Generati on or generator
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7
similarcurrena speeds are comperablecomparable a o a haa ofa he Florida b ulfcurren a speeds foundin
ahe
bulf of
cexico.
decause it iThe sMississippi
eivers close in proximity to our
headquartersin Memphis, Tf
we will be enableenablesusto perform numerous any necessary
tests with minimaltraveltransportation expenses. d ecause these turbines can become so large in
diameter it would be very difficult to mobilize them; therefore, we will final assembly of the
turbines will take placee the actual turbines at the site of placement. The turbine contains no
moving parts and is comprised of 12 segments made of commercial off- the -shelf-products.
g nce assembled the turbine will be placed
on a boat and driven shipped out to the
selected water location. After being
stabilized,the turbine will be removed from
the first boat using smaller boatsthat which
will pull the turbine into the water. There
will be airbags underneath the blades ofthe
turbine, which will allow it to float on top
ofthe waterbefore prior to being lowered
to the river bottominto the river.h
epending on the flow of the current, the cables may be
connected to the shore banksinstead ofthe river bottom. Thisis because ifthe wateris moving
in mainly one direction it will only hitthe turbine from one angle, meaning the turbine will only
be receiving force on one side. Itis more usefulto have the cables on shore if possible because it
will be easierto transferthe electricity through the cablesifthey are not completely underwater.
g bviouslyT this willobviously not be possible in larger bodies of water because there will not be
any land thatis close enough forthe cablesto reach.
These turbines have proved to be marine life friendly because they do not disrupt the normal
routine of marine animals.i
tudies have shown thatthe majority ofsea creatures are easily able
to avoid these large turbines because they remain stagnant and emit signs of water rotation
before animals can approach the structure. They are also often rotating at speeds which are
slower than walking. Many people believe that other water activitiessuch as the capturing of
fish for commercial use is more harmful than the implementation of water turbines. d ecause
these turbines are beneficialto the environment our company will qualify for a tax credit, which
is 1 cent per kWh in the Unitedi
tates. We anticipate that the turbines will generate
approximately 4-10 watts of energy and have a 30-yearlifespan.
Comment [A11]: cite
Formatted: Strikethrough
Formatted: Font color: Red, Strikethrough
Comment [A12]: I think they actually strive fplacement half way b/t the river bottom & the
waters surface best currents there
Comment [A13]: reword
Formatted: Font: (Default) Times New Rom
12 pt
Comment [A14]: I think a dash goes either b/
marine & life or life & friendly
Comment [A15]: cite
Comment [A16]: cite
Comment [A17]: with no editing marks, this is situated ok if we even want to use it (?)
We can delete this picture.
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8
Fac ty Locat o a Layo t
Placement op the hydrokinetic turbines has been decidedupon q ith the p olloq ing issues in mind r
size op
river, current capabilities op
the river, proximity to manupacturers o
psteel, and proximity
to electricity markets. Research has shoq n that the Mississippi River provides average currents
at or above 6 miles per hourq
hichq
ill ensure the optimal ep p
iciency op
the hydrokinetic
turbines. The southern portion op
the river is also in close proximity to electricity markets locatedin the Southeast (q q q .redorbit.com
s
ne q ss
displays
t id=1321709). Green Electric has a deal in
place q ith the Tennessee u alley v uthority (T u v ) and they q ill be our p irst and primary
customer during the pilot project.
Speci p ic site locations o p the Greene Turbines consist o p one location near Greenville,
Mississippi and three locations concentrated in the portion o p the Mississippi River p rom Baton
Rouge, Louisiana to the Gulp
op
Mexico. In this section op
the river, thew
.S.x
orps op
Engineers
maintains a depth op
45peet via its series o
plocks and dams (
q q q.mvm.usace.army.mil). This
depth is necessarypor placement o
pthe turbines.
vccompanying these sites are Green Electric
vssembly and Maintenance Plants
qhich are located
qithin
pivemiles o
pthe turbine placement
site. This enables on-site employees to maintain the turbine q hile ensuring lo q transportation
emissions and costs. While maintenance o p the turbines is minimal, Green Electric believes it is
important to have a presence at each turbine site. Comment [y
]: sa
et
g here oncethee t ng marksaregone this ma should format
ok w/triangles in place
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9
Green Electrics layout, both internally and externally, is supportive o our green supply chain.
Externally, Green Electric has been successul in lo
ering transportation emissions byutilizing
the Mississippi River to transport partsor assembly. This
as achieved by choosing to partner
ith a steel manu acturer ith a comprehensive EMS and a plant location on the river.
Internally, Green Electric has created departments
hich,
hile individual,
ork cohesively
to
ards a common goal. These departments include management, accounting, administration,
engineering, human resources, in ormation technology, internal audit, and operations. Green
Electric
ill start out
ith 21 employees
ith 13 o
those employees
orking in our
headquarters located in Memphis, Tennessee. The other 8 employees ill ork at our ssembly
and Maintenance Plants (2 per plant). ollo ing is a block plan and closeness matrix or the
various departments.
De
artme
t
rea Nee
e
Feet1. Management 1000
2.
ccounting 5003. dministration 2504. uman Resources 5005. In ormation Technology 10006. Internal udit 2507. Operations 2508. Engineering* 250
Tota
4000
oe
e
Factor
De artme
t 1 2 3 4 5 6 7 81. Management 10 7 4 8 10 92. j ccounting 3 4 2 10 7 23. j dministration 9 10 8 3 44. k uman Resources 2 5 3 25. In l ormation Technology 2 4 56. Internal j udit 2 2
Greene
TurbineSite
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10
7. Operationsm
58. n ngineering* m
8 1 2 6
7 4 3 5
Proposedo
ayout
Supply Chain and Inventory
Green
lectric believesthat our product and mission require the implementation ofGreen
upply
Chain Management (GSCM). Truly effective GSCM requires that an organization examine the
environmental practices throughout the entire value chain. This includes the environmental
impact from operations, suppliers, warehousing, transportation, product use and product disposal
(
arnall, 2006). The lifecycle impact of a product ranging from shipability, energy
consumption, offgassing, service requirements and end-of-life disposal or recycling, must be
taken into consideration (http://whitepapers.technologyevaluation.com/vendor/96/ ifs) eedale,
2010) Green lectric began searching for a steel manufacturing partnerthat would support our
green supply chain managementstrategy. After researching three steel manufacturersin the U.S.
(ArcelorMittal, U.S. Steel, and Harsco Corporation), ArcelorMittal was chosen based on the
following criteria: green standards, quality, location, materials cost, and freight costs. U.S. Steel
wasimmediately discarded as an option when research showed thatthe company was ranked as
the 8th
largest air pollution producerin the United States.
1. Since the merger ofMittalSteel and Arcelor created ArcelorMittalin 2006, ArcelorMittalthecompany has risen from the 40t
hto the 1stlargest producer ofsteelin the world
(www.worldsteel.org/?action programs&id 53). ArcelorMittal has fourteen plantsin the U.S.and since 2007, the majority ofits plants have acquired certification from the InternationalOrganization forStandardization (ISO). This ISO 14001 standard certification has been achievedin over 90% ofits plants with 100% compliance expected by the end ofthis year.(www.arcelormittal.com/index.php?lang=en&page=8).
This certification ensures that the companys environmental management system (
MS) is
operating within specific guidelines and requires that the company provide objective evidence
which is auditable. Their environmental policy, environmental managementsystem, research and
development efforts, and overall dedication to reducing their CO2 footprint convinced us that
they are an ideal manufacturing partner forGreen lectric. Therefore, the ArcelorMittal plantin
Comment [A19]: again all of the layout graph
should be on one page post edit
Formatted: Font: 11 pt, No underline
Formatted: Font: 11 pt, No underline
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11
Cleveland, Ohio has been chosen as oursupply partner and willsupply Green lectric with thesteel component ofthe hydrokinetic turbines. The Cleveland plant istoday the most productive
steel mill in the world, requiring less than one worker hour to produce a ton of steel
(www.arcelormittal.com/environment/us/cleveland).
Our partnership with ArcelorMittal will help us realize business success while achieving our
environmental goals. We have similar gGoals we share include such as: reduction of waste and
direct emissions; implementation of environmental management systems ( MS); compliance
with all regulatory bodies and environmentallaws; and company-wide involvementin the effort
to ensure all aspects ofthe value chain are environmentally sound. ArcelorMittal uses ife Cycle
Assessment methodology which analyses every stage in the life of a piece ofsteel from mining
and coating, to use, and finally recycling and disposal
(www.arcelormittal.com/index.php?lang en&page 686). Itis especially important for all parties
to have open communication. ArcelorMittals esearch and z evelopmentteam are eagerto meet
regularly with Green
lectric in a constant effort to optimize production while minimizing
environmental risk.
Our green supply chain consists of the following: manufacturing of steel parts which are
delivered by boat via the Mississippi
iverto Green
lectric assembly and maintenance plants;
assembly ofthose parts by Green
lectric engineers; transport ofthe partially finished product by
an outsourced trucking company to the placement location; placement of product onto a boat
owned by Green
lectric; final assembly on the boat by Green
lectric
ngineers; placement of
the productinto the river; megawatts of power produced sold to TVA.
In conjunction with GSCM, Green
lectric is implementing an enterprise resources planning
( { ) system which will enable us to gauge, manage, and run reports on our environmental
footprint. This will be useful when communicating with our supply chain, proving compliance
with regulations and environmentallaws, and making improvementsinternally to our operations
and product design. The {
we will be using willinclude an
co FootprintManagementtool
which allows inclusion of other environmental impacts not attributable directly to the product
but to the companys operation as a whole, and amortizes it across the entire product line
( eedale, 2010). The { has been customized by our IT staffto fit our needs and will enable
every employee to cohesively view our operations. Thistype ofsystem also enablesthe different
divisions ofGreen
lectric to better understand the other divisions roles within the organization.
RawMaterials
Transport Fabrication Assembly PlacementEnergy
Company
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12
Another advantage to implementing the | } ~ system is that the four on-site Assembly andMaintenance plants will have real-time accessto the exactsame information thatthe employees
at Headquarters have accessto.
Solid inventory control systems are necessary when practicing GSCM. These comprehensive
controlsystemslessen the risk of unnecessary stocksurplus and encourage a more streamlined
production practice ( } osenberg and Campbell, 1985). ue to the nature ofGreen | lectrics
business, inventory lotsize will be limited to the parts necessary forthe assembly of fourGreene
Turbines. After placement of the turbines, Green | lectric will maintain only the limited
inventory necessary for maintenance. } eplacement parts for each part used to assemble the
turbines will be housed asinventory atthe four Assembly and Maintenance plants. A base-stock
system of inventory will be implemented at each Assembly and Maintenance plant. Within the
base-stocksystem, anytime that a partistaken from inventory, it willimmediately be replaced
by oursteelsupplier, ArcelorMittal. This will ensure that anytime maintenance is needed, parts
willimmediately be available and that nottoo much inventory is being held. Also, because ofthe
information sharing capabilities of the | } ~ , every employee will be able to see real-time
numbersin inventory.
Total Quality Management Systems
Green lectric will implement a lean Total Quality Management (TQM) system. This lean
system will: help reduce waste and increase productivity; emphasize employee and departmental
interaction; encourage innovative ideas from all employees; enable strong supplier partnerships;
and aid in a low inventory maintenance. We will implement the Five S (5S) method which
consists of the five practices of sorting, straightening, shining, standardizing, and sustaining(Krajewski 2010). These practices must be done systematically and across the entire
organization. As a result, all employees will become more productive and begin to see their work
in a new a more focused manner.
We will also incorporate Total
roductive Maintenance, especially within the four Assembly and
Maintenance lants. ecause the Greene Turbine will need so little maintenance, once initial
production is complete, the engineers may have surplus time. Through T M we will establish
routine preventative maintenance times on the turbines ratherthan wait for a mechanicalissue to
arise. The engineers will also keep detailed standardized maintenance logs which will aid us post
pilot program.
Value stream mapping (VSM) will also be introduced within the lean system as a qualitative tool
t
o ai
di
nl
oweri
ng wast
e producti
on. This
will
bei
nt
roduced once operati
ons
have beeni
n pl
acefor at least six months. At that point, we will evaluate our process and practices and compare
them to a future model. The benefits of applying thistoolto the waste-removal processinclude
Formatted: No underline, Font color: Auto,
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13
reduced lead times and work-in-processinventories, reduced rework and scrap rates, and lowerindirectlabor costs (Krajewski 2010).
Thislean system will work well with our green supply chain, , and MS.
Operations Strategy
Today, environmental pollution is an issue which has the potential to lead to the extinction of
mankind on earth. Of the various kinds of pollution, air pollution needs the most immediate
attention. Global warming, an effect due to the increase in amount s ofthe green-house gases
presentin airis a very severe problem mankind is facing ( The Coastal Business JournalSpring
2009: Volume 8,
umber 1).
In order to curtail these greenhouse gas emissions, our company, Green
lectric, will
manufacture, distribute, and maintain hydrokinetic turbines. They will be sold to utility
companies forinstallation in deep flowing U.S. r
ivers. The turbines will constantly generate
energy to the nations electrical grids, thereby reducing pollutants by providing reliable
renewable electricity.
Green
lectric will partner with concrete and steel producers for the procurement of the raw
materialsto constructthe hydrokinetic machines. Our business venture will not only achieve an
ecological benefit, but also gain an economical advantage by avoiding the costly and time-
consuming effort of building a dam or power plant. Green lectric providesinnovative energy
solutions that are most affordable and maintains our commitment to a clean and safe
environment.
Competitive Priorities
A production process hasto support an organization's competitive priorities: cost, quality, time,
and flexibility. Competitive priorities are importantto the design of new services or products,
the processes that will deliver them, and the operations strategy that will develop the firms
capabilities to full them (Krajewski, 2010). Competitive priorities guide decisions on the
production system, and they must be considered when translating strategy into specific
manufacturing processes (Krajewski, 2010). Green lectrics key competitive priority is quality.
The performance and features ofthe turbine and its hydrokinetic energy are superior. They are
durable, lasting approximately 30 years and requiring little maintenance. The construction ofthe
turbines must conform to governmentspecificationsto avoid detrimentalimpactsto the marine
environmen
t. In an e-ma
ilre
spond
ing
to que
stion
sfrom The A
ssoc
ia
ted
ress
,the
nergy epartmentsaid there are more than 100 marine and hydrokinetic devices under developmentin
the United States and the world. However, due to the complexity ofthe device, most are in the
early stages of readiness, the
nergy
epartmentsaid. Furthermore, strictspecifications ofthe
Comment [A20]: is this supposed to becapitalized?
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14
product lengthensstrictspecifications ofthe product lengthenthe time thatitis at risk before itbecomes obsolete.
Investment cost amountsto $6 million. However, the hydrokinetic equipment offers a lucrative
return on the investment, potentially capitalizing $60 million in revenues ($2 million in revenue
per year over a 30 yearlife cycle).
Quality is also consistent.
rocesses are designed and monitored to reduce errors, prevent
defects and achieve similar outcomes over time (Krajewski, 2010). Quality is measured using
key performance metrics and a target level of quality has been established for our product and
service. mployees are involved in quality of productions, operations, processes, and customer
service,service and efforts will be evaluated on a quarterly basis. Systems are set up to ensure
quality. Quality awareness is maintained, and it is the driver of decisions in other functional
areas.
Competitive priorities are assigned to core processesto achieve the service required to provide
complete customer satisfaction. Four core processes include: customer relationship, new
service/product development, order fulfillment, and supplier relationship (Krajewski, 2010).
Quality is key to our core processes. Itis assigned to the core processes as follows:
y Customer Relationship. The quality is consistent; information and service areerror free.
y New Service Development. Top quality is achieved because new servicesmust be carefully designed.
y Order Fulfillment. The service provided must be top notch and quality isconsistent. Once the quality level is set, it is important to achieve it everytime.
y Supplier Relationship. The quality of the inputs must adhere to the requiredspecifications. In addition, the information provided to the suppliers must beaccurate.
Core Competencies
The core competencies will allow our company to succeed in the marketplace with a competitive
advantage. One core competency is having a patent for new technology. Other competencies
include our workforce, facilities, and knowledge ofthe market.
We have a workforce thatis highly skilled and well-trained. mployees are flexible to handle
equipment arranged by function on the assembly line. Our engineers have the knowledge and
expertise necessary for installing the machinery within the turbines.
xpert mariners will
perform a vari
et
y oft
as
ks
t
o meas
ure and mai
nt
ai
nt
he wat
erways
. Thel
ogisti
cs
t
eam will
oversee the flow of goods and resources between the point of origin and the point of
consumption in orderto meetthe requirements of consumers, as well as manage the integration
of the supply chain. The logistics team will also play an intintegralracle role in producing
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15
auditable documents regarding our environmental policies and our green supply chain. Anequipped workforce will allow our organization to respond to the market needs.
Facilities are ideally located to reduce lead time from our facilitiesto the installation sites. Our
facilities are flexible and able tohandle a variety ofservicesincluding manufacturing, assembly,
distribution, warehousing, and maintenance ofthe hydrokinetic turbines.
Our company has a competitive edge in regards to marketing our service.
ocal, state and
federal lawmakers and even countries abroad have a better perspective on supporting and
nurturing the green sectorthan they did in the past. They have embraced the notion of going
green more holistically and thissupport hastranslated into stimulating the green sector and the
overall economy as well. ozens ofstates are making laws requiring industriesto use renewable
energy. For example, Ohio and Iowa requires utilitiesto buy some ofits power from renewable
sources and
ew Hampshire will require itsstate to buy fuelthat contains atleastsome biodiesel(The Coastal Business JournalSpring 2009: Volume 8,
umber 1). Firms are also incorporating
green practicesinto their business models, and consumers are seeking waysto contribute to the
preservation of the environment. Thereby enabling capital to be attained more easily to market
and distribute ourservices.
Our product can be differentiated from similar products. The design of the turbine makes it
novel. Typical turbines are like underwater windmills. Their blades must knife through the
water fast enough to spin the turbine to produce electricity. The performance deteriorates when
barnacles attach to the blades, slowing them down. They are also expensive to maintain.
(http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-turbine/)
The Greene hydro-turbine is different. It usesthe force of falling waterinside the bladesto turn
the turbine, which issealed in the middle ofthe structure. The torrent of water within this closed
system continuously spinsthe turbine. The valve system re-circulatesthe water from one tanktothe next. (http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-
turbine/). Furthermore, the Greene turbine avoids some mechanical power transmission
problems because it does not rely on the usual gear box and transmission shaft. It can be built
using simple materials and Commercial-Off-the-Shelf (COTS) parts. It can also be scaled up to
provide multiple megawatts per unit which leads to increased durability and more energy
produced.
o one, to date, has created a hydrokinetic turbine aslarge asthe Greene Turbine, the
largest being 250 feetin diameter (Greene, 2010).
Order Winner
The design of our product and an integrated supply chain are the criterions that make our
company an order winner. A couple of key attributes ofthe Greene Turbine design isthatitis
does not rely on the rotations per minute (
M) of a generator, and itisscalable, which greatlyreduces costs. Another feature is that it requires low maintenance with the valve lasting
approximately 30 years. Another unique attribute is that the turbine does not need traditional
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gear boxes ortransmission shafts to harness the energy, eliminating problems with torque andstress ofsnapping. Finally, the size of the mechanism makes it unrivaled. The conventional
design becomes harder to implement as size increases, whereas, our invention actually works
more efficiently the largerthe scale (Greene, 2010).
Ourintegrated value chain gives us a competitive advantage.
mbedded in our operations will
be the capabilities to manufacture raw materials into specialized parts, assemble the parts to
construct the turbines, transport the turbines to be installed into the rivers, and provide
maintenance services. Furthermore, in contrast to a traditional supply chain, we have
incorporated a green supply chain. Our green supply chain gives significant considerations to
ecological as well as economic objectives and values.
Order Qualifier
Our business will achieve a level of performance for it to become an order qualifier. The
hydrokinetic apparatus can be a huge benefit. ivers are in close proximity to the majority ofthe
population, allowing easy accessto utility companies who can offer clean energy servicesto its
consumers. An advantage that hydrokinetic energy has is that it's available 24-7 unlike other
sourceslike solar and wind powerthat can't work around the clock be cause they depend on the
sun being up and the wind blowing hard enough... [Furthermore], the hydrokinetic turbines
have the ability to generate a significant amount of power with zero carbon footprint-- a big
selling point for people, companies and governments dealing with the effectthat burning fossil
fuels has on the arth's atmosphere. "The [ nergy] epartment is optimistic that marine and
hydrokinetic resources can provide another valuable option to our nation's portfolio of clean
renewable energy sources" (http://www.businessweek.com/ap/financialnews/
9I73F3O0.htm).
Positioning the Firm
Green
lectric will compete in the renewable energy sector ofthe energy & utility industry, as a
limited liability corporation ( C). Our innovative and efficient, low speed turbines create
hydrokinetic energy which allows our company to provide a reliable service to utility companies
at rates of 4-5 cents per kilowatts. The utility companies will then supply electricity to its
consumers.
Manufacturing & Costs
ue to the fact that the only materials needed for manufacturing are steel and concrete, we
anticipate these turbines to be very cost efficient. We have created a very simple model of
production, which makes it reliable and durable.
ecause these devices have low raw materialcosts, they can be produced for approximately $6 million. Hydrokinetic turbines also are
economically viable, with installation costs approximately $1,500/kW. There will also be costs
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associated with the maintenance of the equipment because they must be routinely cleaned toensure thatthey are fully functional. As far as costs of usage, we will charge either an annual fee
or a fee associated with the kilowatts of energy produced. The Greene Turbine qualifies forthe
Section 45 incremental hydropower production tax credit (1 cent per kWh) in the United States.
Process Choice
Green lectric operates within the process design as both a product-process structure and a
service-process structure. With a product-process position, the hydrokinetic turbine is
manufactured as a job process coupled with a make-to-order strategy. With a service-process
position, energy is a commodity available continuously to customers, and services are highly
standardized to assure uniformity.
The optimal process choice forthe product-processisthe job process. Customization is high and
volume for any one product is low. The workforce and equipment are flexible to handle
considerable task divergence. ids are submitted for work orders, and each new orderis handled
as a single unit (Krajewski, 2010).
A job process primarily organizes alllike resources around itself (ratherthan allocating them out
to specific products); equipment and workers capable of certain types of work are located
together. These resources process all jobs requiring thattype of work.
ecause customization is
high and most jobs have a differentsequence ofstep, this process choice creates flexible flows
through the operations ratherthan a line flow (Krajewski, 2010).
The job processis coupled with the make-to-orderstrategy in orderto satisfy the unique needs of
customers. Green lectric will employ the make-to-order approach to customer orders. This
strategy is considered suitable because of the turbine being highly configured and holding
inventory would be very expensive. The product is manufactured in low volume after the
customer order is received. Afterwards, each specialized partis assembled to build the turbine
according to governmentspecifications.
Our resource flexibility isspecialized. esource flexibility isthe ease with which employees and
equipment can handle a wide variety of products, outputlevels, duties, and functions. Members
of our workforce are highly skilled and capable of performing many tasks. Flexible, general-
purpose equipmentis used in our operations.
Our capitalintensity containslow automation. Generally, capital-intensive operations must havehigh utilization to be justifiable. Automation does not align with our competitive priority. Our
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firm offers a unique product and high-quality service that require a skilled workforce andindividual attention, causing automation to become ineffective.
Capacity Determination
In-stream river and ocean current energy projects have the highes t capacity factor of all
renewables, which can be above 98%. They operate in continuous fashion, which isimportant
for electric grid reliability and better helps the U.S. meet its growing demand for new power.
Current-based hydrokinetic energy is predictable, dependable and forecastable
(http://www.hgenergy.com/benefits.html). ecause of demand and supply uncertainty, process -
focused plants cannot do an effective job ifthey operate near their full equipment capacity. In
fact, they operate best with a comfortable level of capacity cushion.
Itis criticalthatthe turbines conform to specifications mandated by the governmentso thatthe
ecosystem remains environmentally safe. The size and quantity ofturbines are then built based
on the order that will meetthe customers need. Therefore, we will wait until more demand is
more certain before expanding capacity ofthe turbines.
Asit relatesto providing a service of hydrokinetic energy, a 250 footturbine wheel produces 23
megawatts (MW) and can power 1,000 homes at a time. A 100-foot wheel makes 1.8 million
watts. The power generated from a 30 foot diameterturbine hasthe capacity to produce 140,000
watts, which is equivalentto 1,400 100-wattlightbulbslight bulbs (Greene, 2010). Our firm has
the capacity to meet current and future demand that will enable usto make profits and growth. If
demand increases overtime, capacity willincrease also.
The capacity level forthe production ofthe turbines and harvesting hydrokinetic energy requires
a one-shift operation. If our firm were to encounter a temporary peak in demand, our process
can operate above its capacity level using employee overtime as its marginal method of
production. educing costs of purchased materials can help economies ofscale drive costs down
and make operations more efficient. Our company can take advantage of a better bargaining
position and reduced costs ofsteel by purchasing from othersupplierssuch as Wal -Mart, Home
epot, or
owes. This will be possible due to the design ofthe Greene Turbine; it wasinvented
with cost effectivenessin mind. Our firm can also reap benefits from speeding up the learning
curve of employees and improving process and job designs (Krajewski, 2010).
The capacity cushion forthe turbinesis minimal, amounting to 5%, with it being highly capital-
intensive. Our less capital-intensive energy service experiences a 30% cushion. Our current
demand isto produce 4 turbinesin a year.
emand is expected to increase to 6 turbinesin a yearoverthe next five years. Ifthe desired capacity cushion is 5%, we will plan for enough capacity
to serve 6 customersin five years [6/(/ (1-0.05)
6].
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We will adopt the conservative wait-and see strategy. This strategy follows demand andexpansion is planned in smallerincrements, such as by renovating existing facilities ratherthan
building new ones. In addition, expansion will be carefully planned with leasing land from the
government in order to place the turbines. The wait-and-see strategy reduces the risk of
overexpansion based on overly optimistic demand forecasts, obsolete technology, or inaccurate
assumptions (Krajewski, 2010).
Conclusion
References
www.redorbit.com/news/display/?id 1321709
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www.mvm.usace.army.mil
http://whitepapers.technologyevaluation.com/vendor/96/ifs.html
www.worldsteel.org/?action programs&id 53
www.arcelormittal .com/index.php?lang=en&page=8
www.arcelormittal.com/environment/us/cleveland
Krajewski,
ee J., Operations management /
ee J. Krajewski,
arry
.
itzman, Manoj K.Malhotra.9 ed. p. cm. ISBN-13:978-0-13-606576-0
The Coastal Business JournalSpring 2009: Volume 8, Number 1
http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-turbine
Greene, Jeffrey. Interview atGreene Turbine offices 12/1/2010.
http://www.hgenergy.com/benefits.html
http://www.coastal.edu/business/cbj/pdfs/articles/spring2009/ho_shalishali_tseng_ang.pdf
http://greeneturbine.com/index.html
http://www.businessweek.com/ap/financialnews/
9I73F3O0.htm
http://www.commercialappeal.com/news/2010/mar/21/inventor-finds-right-spin-on-turbine/
http://findarticles.com/p/articles/mi_qa3796/is_199901/ai_n8837740/pg_3/
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Comment [A21]: Is this the full citation?Full citation isin the list(http://www.coastal.edu/business/cbj/pdfs/articlering2009/ho_shalishali_tseng_ang.pdf)