Bridgeton Industries Essay

1. Describe the competitive environment for Bridgeton as well as the terms account system currently in use.When foreign competition and scarce, expensive gasoline began to play an important aim in the market, Bridgeton began to lose domestic market share. The ACF Bridgeton plant faced new challenges in their production that guide them to serious cutbacks like the closing of the ACF plant for manufacture of fuel-efficient diesel engines. By 1987, they classified their products in call of world class competitive position and potential. With four criteria (quality, customer service, technical capability and competitive cost position) they classified their products in Class I (remain), II (observe) and III (outsource). The classification allowed Bridgeton to take decisions on how to wagerer manage their products performance compared to their competitors. The cost accounting system was product costing, a mixed between personal credit line costing and process costing. 2. Explain why m anifolds moved from Class II to Class III after(prenominal) oil pans and muffler-exhaust systems had been outsourced from the ACF.Despite improvements in the production process manifolds were downgraded from Class II to III. The results were not sufficient, even though they increased the uptime from an average of 30% to 65% they were behind their Japanese competitors that reached a world class finish of 80% uptime. In addition, as seen in Exhibit 2, the direct material costs for manifolds (based on unstained steel) is extremely high as a percentage of sales (around 40%) compared to the other products manufactured at ACF and at a better Class level.However, there was a doubt on this move callable to the possibility of new market requirements for lighter weight (more efficient manifolds). This represented a good opportunity for ACF because as they manufactured manifolds with stainless steel, demand could increase and therefore selling price too.