Page 364 - Business Principles and Management

C HAPTER 13 A SSESSMENT

CASE IN POINT

CASE 13-1: Solving Planning Conflicts
The ToyTime Company makes and sells a line of popular children’s toys.
In six months, retail stores will begin buying the company’s products in
large quantities in preparation for the holiday shopping season. Every
year, ToyTime introduces one or two new toys designed to attract the
attention and interest of children and their parents and get them into the
stores at holiday time. Then they design in-store displays and promotions
of the company’s toys that have been popular for many years, bringing in
a high volume of sales of both new and traditional toys.
Jacob Marks, the marketing manager, has recently reviewed the results
of research on this year’s newest toy. The toy received the most positive
customer response of any toy they have introduced in the past five years.
Based on that research, Mr. Marks is confident that sales will be 15 per-
cent higher this year than last. As a result of these estimates, he plans to
implement an advertising blitz to introduce the new toy. Several additional
salespeople have been hired to work with retail stores to make sure both
the national chains and independent retailers are prepared with adequate
inventory for the upcoming holiday sales period.
At the same time Jacob Marks has been working on the expanded mar-
keting efforts, Janice McConklin, the production manager, has been run-
ning into problems. She has had difficulty getting an adequate supply of
one of the key raw materials from the firm’s only supplier. Production
levels for the new toy have been 20 percent below plans during the last
two months. It would be possible for Ms. McConklin to devote additional
production time to increasing the inventory of the company’s traditional
products. However, she was not aware of the recent marketing research or
marketing plans. The production plans, developed three months ago, were
to keep inventory levels of those toys just slightly above last year’s level.
In discussions with the raw-materials supplier, it appears that the supply
problem may be solved in two weeks. If so, she might be able to meet the
production goals for the new toys but product deliveries will be two weeks
later than usual to retailers. She knows that retailers like to have the new
toys early, but there is little she can do about it right now.

THINK CRITICALLY
1. What management problems are apparent in the ToyTime Company?
Why have these problems occurred? Are the reasons related more to
planning issues or to organizing issues in the company?
2. What is likely to happen to the company this year and in future years
if the problem is not resolved quickly?
3. Using the management tools discussed in the chapter, give examples
of how each could be used to help solve the company’s problems.
4. What would you recommend right now that can help resolve the
problems being faced by ToyTime? What should they do to avoid
the same type of problem in the future?

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