Operation Essay

AN INSTANCE STUDY

IN

Production and Operations Administration

" PACCAR TRUCK LEASING”

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I actually. Background

➢ PACCAR Inc. can be described as freight car and lumbering equipment maker. Its main business can be building heavy-duty trucks (Class 8) diesel trucks underneath trade labels of Peterbilt and Kenworh. ➢ PACCAR manufactures the particular tractor a part of a tractor-trailer rig which excludes the trailer component. ➢ PACCAR's competitors not only manufacture School 8 trucks but also make smaller sized trucks. They are: o Worldwide Harvester that makes different kinds of vehicles, construction gear and all sorts of gardening equipment. Previously the largest producer but knowledgeable severe financial crisis due to labor strike difficulty o Mack Trucks which can be second to PACCAR, Inc. in terms of offering the Class almost 8 trucks. This provider also makes middle-weight trucks and in handled by international conglomerate ➢ Other companies that provide more standardized trucks aside from the three (3) leaders namely: Ford, GENERAL MOTORS and Mercedes. ➢ Edge of PACCAR's Class eight trucks compared to others: u Built-in merchandise quality and priced at reduced over competition o Referred to as " Cadillac” of the industry

o Strong distribution and services network around 250 retailers ( After sales service which offer full protection and restore service o It has a strong financial position, virtually no long term debt and its current ratio is definitely 2 . six o One of the few companies in automobile and truck sector to have continuous profits during the last 10 years.

2. Statement from the Problem

Should PACCAR get into a full-service truck rental business to boosts its dwindling salary?

➢ Depression more than 30 years ago showed steepest decline (56% of 78 total) in car revenue volume of the full truck manufacturing industry which includes PACCAR. Due to this, net income of PACCAR dropped sharply. ➢ One of the major factors behind the drop in pickup truck sales is high rates of interest which attempts purchase of all capital merchandise which include vans. ➢ Rather than buying trucks by firms that want to hold their products, that they resort to " full-service leasing”. ➢ In accordance to senior marketing exec, PACCAR " should go in to leasing for defensive reasons and to knowledge an opportunity”. He added that in the event PACCAR don't, as the leasing businesses (competitors) turn into stronger, they will take over PACCAR's relationships while using present clients.

III. Regions of consideration

This areas of concern which will be examined and assessed in relation to the possible strategy to the problem are:

A. PACCAR's Financial Resources

Availability of money had a superb impact on several courses of action to be performed in order to encounter the problem that PACCAR is usually experiencing. This also includes the costs of raw materials sourcing and extra expenditures from the company for the realization of the plan of action, its monetary viability and PACCAR's fluid.

B. PACCAR's Operation

Strategic planning is an important part of survivability associated with an organization. This will dictate PACCAR's direction and operational objectives. Different programs and targets will be created leading to organization's profitability.

C. Human resources (Availability and Capability)

Going to a start up business will place PACCAR in a test of operational ability and openness. Are the personnel technically able, properly educated and is right now there enough availability of able manpower for the modern leasing organization?

D. Operating Cost

Cost of operation is the key profit indicator in any organization....



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