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Five star tools is a small family owned firm that manufactures diamond coated cutting tools used by jewelers. Production involves three major processes, 1 st
Five star tools is a small family owned firm that manufactures diamond coated cutting tools used by jewelers. Production involves three major processes, st steel blanks are cut to size. nd the blanks are sent to chemical bath that prepares the tools for the coat in process. Then the rd major process, the blanks are coated with diamond ships and a proprietary process that simultaneously coats and sharpens three blades of each tool following the coating process. Each tool is inspected and defects are repaired or scraped. The pen. two years the company has experienced significant growth and growing pains. The company is at capacity and the coating and sharpening process, which requires highly skilled workers and expensive equipment because of the bottleneck created by this operation. The company has missed deadlines on orders from several important customers. Maxfield Turner, the son of Frederick Turner, founder of the Five Star Tools, is the president of the company over lunch. He had Betty Spence, vice president of marketing, discussed the situation. We've got to do something. Betty began. If we don't, we think we can meet at customers order deadline. We should turn down the business We can't simply keep customers waiting for product or will develop a reputation as an utter reliable supplier. You know as well as I do that I would be devastating to our business. End quote. I think there would be another approach Betty replied Max some of our products are exceptionally profitable. Maybe we should concentrate on them and drop some of the less profitable ones that would free up our production resources. Or maybe we can figure out a way to run more products through the coding process. If we could just loosen that constraint. I know we could improve our response time and profitability. I'll tell you what I'll do I'll get the accounting department to prepare analysis of product profitability that should help us figure which products to concentrate on and I'll get the production people thinking about how to free some time encoding. We'll meet early next month and try to get a handle on how to deal with our productions and strains. Consider Model C and model D chisels. Which product should be emphasized in the straighten coding and sharpening cannot be loosened. The correct answer is the model C chisel should be emphasized. Focusing on the Model C to chisel on the Model D chisel. What would be the benefit from the fern gaining one more hour of production time and coating and sharpening?
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