Introduction Company T is engaged in the manufacturing of toys and board games. The firm is known for its innovations and quality products. The company sales had declined during the past six months. Person ME, who is the production manager , attributed the economy for the decline in sales. He undertook some measures like cutting down production costs, and laying employees off in the design and product development departments, but all the efforts did not contribute to the growth in the profit. The vice president of sales has been concerned with the customer complaints. Person KM, the assistant of the vice president, suggested making a trade-off for the defective products by getting back the defective items from the customer and providing a new one, which would please the dissatisfied customer. The defective items can be repaired and could be sold at adiscounted price. Person SB, the production assistant, suggested to increase the level of inspection. With 100% level of inspection the number of defectives could be reduced. To determine : The recommendations to the company as a consultant.

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Chapter 10, Problem 1.1CQ

Summary Introduction

Introduction

Company T is engaged in the manufacturing of toys and board games. The firm is known for its innovations and quality products. The company sales had declined during the past six months. Person ME, who is the production manager, attributed the economy for the decline in sales. He undertook some measures like cutting down production costs, and laying employees off in the design and product development departments, but all the efforts did not contribute to the growth in the profit.

The vice president of sales has been concerned with the customer complaints. Person KM, the assistant of the vice president, suggested making a trade-off for the defective products by getting back the defective items from the customer and providing a new one, which would please the dissatisfied customer. The defective items can be repaired and could be sold at adiscounted price.

Person SB, the production assistant, suggested to increase the level of inspection. With 100% level of inspection the number of defectives could be reduced.

To determine: The recommendations to the company as a consultant.

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