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CASE
Kaduna Toy Company (KTC) views its primary task as making for
stock a standardized line of high quality, unique toys that last from publum to
puberty. As a rule, KTC introduces one or two new toys a year. In August, 1994,
the owner and manufacturing manager, Idris Jibrin, has been informed by his toy
inventors that they have designed a “Jackson doll”. This doll will stand two meters
high and is capable of break dancing and singing via an electronic voice
synthesizer. One of the company’s three manufacturing staff departments, design
engineering, states that the product can be made primarily from the molded
plastic using the firm’s new all purpose molders. KTC, in its previous initial
production of new toys, has relied heavily on its skilled workforce to debug the
product design as they make the product and to perform quality inspections on
the finished products. Production runs have been short runs to fill costumer
orders.
If the “Jackson doll” is to go into production, however, the
production run size will have to be large and assembly and testing procedures
will have to be more refined. Currently, each toy maker performs almost all
processing step at his or her work bench. The production engineering department
believes that the assembly of the new toy is well within the skill levels of
the current work force, but that the voice synthesizer and battery operated
movement mechanism will have to be sub-contracted.
KTC has always had good relations with sub-contractors,
primarily because the firm has placed its orders with sufficient lead-time so
that its vendors could optimally sequence. KTC’s orders with those of some
larger toy producers have always favored long range production planning so that
they can keep the toy business all year. The supervisors of the firm’s three
production departments (castles, puppets, and novelties) have been perceived to
be favorable to the new product. The novelty department supervisor, “Fred” has
stated, “My workers can make any toy – you give us an output incentive and we
will produce around the clock”.
The marketing department has forecast a demand of 5,000
“Jackson dolls” for the Christmas rush. The doll should sell for N28.50. A preliminary cost analysis made
by the process engineering department is that they will cost no more than N5.00 each to manufacture. The company is
currently operating at 60 percent capacity. Financing is available and there is
no problem with cash flow. Idris jibrin is wondering if he should go into
production of “Jackson dolls.”
QUESTION:
Indicate the correct and current policy choices on the
manufacturing policy. Based upon your
findings, should KTC introduce the “Jackson Doll?”
SOLUTION:
Kaduna Toy Company (KTC) correct and current policy choices
on the manufacturing policy is viewing its primary task as making for stock a
standardized line of high quality, unique toys that last from publum to puberty
and KTC introduces one or two new toys a year.
Currently, each toy maker performs almost all processing step at his or
her work bench.
Idris jibrin can go ahead to introduce the “ Jackson Doll” based
on the following findings and reasons:
1.
The
production engineering department believes that the assembly of the new toy is
well within the skill levels of the current work force.
2.
The
marketing department has forecast a demand of 5,000 “Jackson dolls” for the
Christmas rush.
3.
The
doll would sell for N28.50 as a
preliminary cost analysis made by the process engineering department was that
they will cost no more than N5.00 each
to manufacture. So KTC will profit from introducing the Jackson doll
4.
Financing
is available and there is no problem with cash flow
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