Toys Inc.

TOYS, Inc. is a 20 year old company engaged in the manufacture and sale of board games. The Company has build a reputation on quality and innovation. Although the company is one of the leaders in its field, sales have leveled off in the recent years. For the most recent six month period, sales actually declined compared 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 moving parts on certain models have become disengaged and fails to operate erratically. His assistant, Keith McNally, has proposed a trade-in program by which customers could replace malfunctioning models with new ones.

McNally believes that this will demonstrate goodwill, and appease dissatisfied customers. He also proposes rebuilding the trade-ins and selling them at discounted prices in the company's retails outlet store. He doesn't think that this will take away from sales of new models. Under McNally's program, no new staff would be needed. Regular workers would perform needed repair during periods of seasonal slowdowns, thus keeping production level.

When Steve Bukowski, a production assistant, heard Keith's proposal, he said that a better option would be to increase inspection of finished models before they were shipped. "With 100% inspection, we can weed not 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... [continues]

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