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FLEX STAR PREMIUM PACKAGING SOLUTIONS

Established in $2022,$ Flex Star provides premium packaging solutions utilizing cutting$-$edge equipment, advanced processes, and rigorous quality control measures. Their vertically integrated manufacturing environment offers comprehensive engineering services, prepress and graphics capabilities, premium blown film production, high$-$resolution printing, solventless lamination, precise slitting, and state$-$of$-$the$-$art conversion equipment. Alex Korosky is the CEO of Flex Star; he convened a management meeting to discuss the financial performance of Flex Star along with the expansion plan that he has in mind. Alex led the meeting with his executive team and ensured the pressing important topics were discussed.

The sales manager started the meeting with credit risk management. According to the sales manager, Flex Star has an excellent credit$-$establishing process, a structured system for tracking credit periods which need to be established. Each credit application process starts with the sales manager requesting a credit application to be filled out by the customer, which the sales manager then approves for the credit limit request. The customer's application is then forwarded to the accounting team so it can set up the customer's account. At first glance, Alex believes this to be a good process but is wondering if improvements can be made and how progress might be measured by the executive team.

Being a manufacturing plant, Flex Star is quite concerned about direct labour costs, as they make up a major part of the cost of inventory. The recent union negotiation has caught Alex's attention, and after consulting with the HR manager, he has come to the realization that direct labour rate for his plant workers, along with the supervisor salaries, will soon be increased by $10\%.$ As many of the firm's sales contracts will be coming due in two months $($with the rate increases kicking in at about the same time$),$ it is important for the executive team to come up with a strategic plan to manage this increase.

As the labour cost conversation continued, the bill of the material topic was also brought up$.$ Alex showed the executive team Flex Star's typical bill$-$of$-$materials statement and outwardly wondered if there is any area, they should focus on to improve its cost. Packaging is a competitive industry, so the race of quality and pricing has always been critical in contributing to Flex Star's success. Below is a BOL to produce $1000$ bags, with margin of $2024$ reduced quite significantly due to unchanged pricing, an analysis needs to be done in order to help Flex Star achieve a $20\%$ margin future going forward, assuming cost of $2024$ will stay constant until the end of fiscal year $2024.$

$\backslash$table$[[$Component$,$Qty consume $2023,$Total Value consumed $2023,$Qty consume $2024,$Total Value consumed $2024],[$Testing$,5,40,6,$$

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