Plastic Toys

As it mentioned in the case, plastic toys have short product lives because the design and price competition of theirs are very fierce in the manufacture industry. Toy World, Inc. needs to change toys' design frequently to keep its competitiveness and earn more margins. However, no one can predict the fashion trend accurately.

We learned from the case that Toy World's introduction of a line of super hero action figures in 1991 had contributed importantly to that year's profits. However, the factory price of the Toy World offering plummeted because 11 competitors marketed similar products, which influenced the sales of Toy World. In 1991, Toy World still used the strategy of seasonal production. What would happen if it adopted level production? It would have gotten huge storage fee and handling costs for the toys, much higher than the estimated price of $115,000 annually for the plummeting factory price.

Due to the short product lives of plastic toys, the market is sensitive to the popular trend changes, which means that production of toys should go with the needs of target market. For example, the firm should produce toys in features of Olympic Games in the time of Olympic Games. But in level production, the firm can't prepare in advance if designers even don't know what the mascot looks like. The production has to go with the season.