Toys, Inc., is a 20-year-old company engaged in the manufacture and sale of toys and board games. The company has built a rep- utation on quality and innovation. Although the company is one of the leaders in its field, sales have leveled off in recent years. For the most recent six-month period, sales actually declined com- pared with the same period last year. The production manager, Ed Murphy, attributed the lack of sales growth to "the economy." He was prompted to undertake a number of belt-tightening moves that included cuts in production costs and layoffs in the design and product development departments. Although profits are still flat, he believes that within the next six months, the results of his decisions will be reflected in increased profits. The vice president of sales, Joe Martin, has been concerned with customer complaints about the company's realistic line of working-model factories, farms, and service stations. The mov- ing parts on certain models have become disengaged and fail to operate or they operate erratically. His assistant, Keith McNally, has proposed a trade-in program through which customers can replace malfunctioning models with new ones. McNally believes this will demonstrate goodwill and appease dissatisfied custom- ers. He has also proposed rebuilding the trade-ins and selling them at discounted prices in the company's retail outlet store. He doesn't think this will take away from sales of new models. Under McNally's program, no new staff would be needed. Regular workers would perform needed repairs during periods of seasonal slowdowns, thus keeping production at current levels. When Steve Bukowski, a production assistant, heard Keith's pro- posal, he said that a better option would be to increase inspection of finished models before they were shipped. "With 100 percent inspection, we can weed out any defective models and avoid the problem entirely." Take the role of a consultant who has been called in for advice by the company president, Marybeth Corbella. What do you recommend?
Toys, Inc., is a 20-year-old company engaged in the manufacture and sale of toys and board games. The company has built a rep- utation on quality and innovation. Although the company is one of the leaders in its field, sales have leveled off in recent years. For the most recent six-month period, sales actually declined com- pared with the same period last year. The production manager, Ed Murphy, attributed the lack of sales growth to "the economy." He was prompted to undertake a number of belt-tightening moves that included cuts in production costs and layoffs in the design and product development departments. Although profits are still flat, he believes that within the next six months, the results of his decisions will be reflected in increased profits. The vice president of sales, Joe Martin, has been concerned with customer complaints about the company's realistic line of working-model factories, farms, and service stations. The mov- ing parts on certain models have become disengaged and fail to operate or they operate erratically. His assistant, Keith McNally, has proposed a trade-in program through which customers can replace malfunctioning models with new ones. McNally believes this will demonstrate goodwill and appease dissatisfied custom- ers. He has also proposed rebuilding the trade-ins and selling them at discounted prices in the company's retail outlet store. He doesn't think this will take away from sales of new models. Under McNally's program, no new staff would be needed. Regular workers would perform needed repairs during periods of seasonal slowdowns, thus keeping production at current levels. When Steve Bukowski, a production assistant, heard Keith's pro- posal, he said that a better option would be to increase inspection of finished models before they were shipped. "With 100 percent inspection, we can weed out any defective models and avoid the problem entirely." Take the role of a consultant who has been called in for advice by the company president, Marybeth Corbella. What do you recommend?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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what should be recommended for the case study Toys Inc..
Transcribed Image Text:CASE
TOYS, INC.
Toys, Inc., is a 20-year-old company engaged in the manufacture
and sale of toys and board games. The company has built a rep-
utation on quality and innovation. Although the company is one
of the leaders in its field, sales have leveled off in recent years.
For the most recent six-month period, sales actually declined com-
pared with the same period last year. The production manager,
Ed Murphy, attributed the lack of sales growth to "the economy."
He was prompted to undertake a number of belt-tightening moves
that included cuts in production costs and layoffs in the design
and product development departments. Although profits are still
flat, he believes that within the next six months, the results of his
decisions will be reflected in increased profits.
The vice president of sales, Joe Martin, has been concerned
with customer complaints about the company's realistic line of
working-model factories, farms, and service stations. The mov-
ing parts on certain models have become disengaged and fail to
operate or they operate erratically. His assistant, Keith McNally,
has proposed a trade-in program through which customers can
replace malfunctioning models with new ones. McNally believes
this will demonstrate goodwill and appease dissatisfied custom-
ers. He has also proposed rebuilding the trade-ins and selling
them at discounted prices in the company's retail outlet store.
He doesn't think this will take away from sales of new models.
Under McNally's program, no new staff would be needed. Regular
workers would perform needed repairs during periods of seasonal
slowdowns, thus keeping production at current levels.
When Steve Bukowski, a production assistant, heard Keith's pro-
posal, he said that a better option would be to increase inspection
of finished models before they were shipped. "With 100 percent
inspection, we can weed out any defective models and avoid the
problem entirely."
Take the role of a consultant who has been called in for advice
by the company president, Marybeth Corbella. What do you
recommend?
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