Case No.4

Case Study

No.4

Submitted by:

Sierra, Vincent

Hidalgo, John

Santiago, Kenneth

Amante, Janela

Lagura, Alic

Babiera, Diocel

Central Problem

Sales of standard line is increasing steadily, so it requires more regular scheduling, but custom made furniture is given priority because of its higher sales and profit margins. Thus, scheduled lots of standard furniture pieces are idle around the plant in various stages of completion such as raw materials or work-in-process stage.

Objectives:

1. To come up with the best solution of the company’s accounting problems.
2. To ensure the company’s financial stability in line with its new diversification from its traditional method of manufacturing.
3. To further develop the company’s products that best reflects the company’s current image.

SWOT Analysis:

Strengths:

1. The company has built a firm reputation for its custom made furniture products as having both a creative design and high-quality workmanship.
2. Additional business from standard furniture sold at outlet stores.
3. The founder’s passion reflects his company’s mission.

Weaknesses:

1. The same craftspeople assemble both standard and custom made furniture, which may lead to inefficiency and inconsistency cost by confusion.
2. The custom and standard furniture being produced are located in the same assembly line, which could lead to confusion as well.
3. Lack of space in manufacturing would lead to disorganization among assemble workers and craftspeople.

Opportunities:

1. An ideal location for selling outdoor furniture indoors.
2. A high demand for furniture causing the company to diversify and add standard furniture manufacturing in its assembly line.
3. Outlet stores provide a good subsidiary or middle person towards selling and advertising the company’s products.

Threats:

1. Sudden change in the economy may affect manufacturing schedule of the company even more.
2. The constant threat of outside competition should the company fail to solve its accounting problems.
3. The high demand from outlet stores for consistent and time efficient delivery of standard furniture.

Alternative Course of Action:

1. Separate out production lines after increasing capacity.