Fox Mats manufactures custom replacement floor mats for automobiles. The floor mats are made of spun nylon on highly automated, expensive machinery. Fox manufactures two mat styles: Plush and Deluxe. Fox's unionized work force makes it difficult for Fox to compete on price. So far, it has been able to successfully compete on quality, innovative design, and delivery schedule. However, the leaders of Fox's union are aggressive and are seeking additional work-related job guarantees. Fox management would like to reduce its dependence on unionized labor.

Fox's manufacturing process is overhead-driven: most of the overhead-driven arises from the common machinery that produces the Plush and Deluxe floor mats. Nonunionized engineers and technicians maintain the equipment. Expensive lubricants and filters are required to operate the machines, which require large amounts of electricity and natural gas. Each mat style is produced in batches that consist of 10 mats per batch. Plush and Deluxe do not put differential demands on the equipment other than through the amount of machine time required to produce each batch of mats. The following table summarized the operating data for each mat style.