The New Heritage Doll Company : Capital Budgeting

Emily Harris is the Vice president of New Heritage Doll Company’s production division. In mid-September of 2010 she was trying to decide on project proposals for the company’s capital budget meeting in October. Of the proposals presented to her, two of them stood out based on their innovation and ability to strengthen the division’s product lines. The first project, Match My Doll Clothing Line Expansion (MMDC), would extend the warm weather products to an all-weather clothing line. The second project, Design your Own Doll (DYOD), would start with a website where customers would choose the doll’s features, color, etc. and then the dolls will be made to order. The

3. Barbie dolls came into existence in 1959. During that time all dolls were infant dolls and Ruth Handler creator of the barbie dolls saw that “children will enjoy giving the Barbie adult roles” because it is different than playing with infant dolls. It has evolved over time, due to the improving technology, the dolls these days look very realistic. The social impact it has made is that it gives children a chance to play with more advanced toys and gives them the ability to admire Barbie’s achievements through her various career

The New Heritage Doll Company offered a unique line of dolls as an alternative to its competitors, and it wanted to extend its brand for future growth. The company has three operating divisions: production, retailing and licensing. All three divisions planned to promote projects of their own to compete for the same limited resources. Emily Harris, vice president of the production division, had to be prepared to select one of the two project proposals from her division and come up with a compelling case to submit to the company’s capital budgeting committee.

On the morning of January 17, 1993, before the annual buying trip to Germany for the 1993 Christmas season, the toy buyer for the chain of Hightower Department Stores named Julia Brown was reviewing the performance of some models of stuffed animals tested for sales during 1992. Every time Julia’s on the trip, she would buy some stuffed animals for testing. Fifty was the minimum amount the manufacturers require. Based on Julia’s years of buying experience, the tested result would give Julia a clear estimation about how many new stuffed animals she needed to order. Figure 1 in below shows the timeline of how Julia buys the toys for the company:

Today, I can walk into almost any toy store in America and expect to get bombarded by plastic figures with extreme bodies. But if I were to play this same scenario out in previous time periods, I would find it difficult to encounter the same types of products. This is because children’s toy trends have shifted in America throughout the 20th century. I recently came across an article from TIME magazine that reflects this idea. In it, author Allie Townsend, managing editor of Facebook, ranks 100 of the most influential American toys since the 1920’s.25 I moved through the list from the beginning, and rarely did I come across a toy resembling a doll or action figure until decades later. The toys that populated the store shelves during the first

productivity per square foot double that of the retailer’s nearest competitor. 5 By 1988, Toys “R” Us

to be the same as the division’s existing business. However, to enter the clothing industry could be a

The second proposal, called Design Your Own Doll, is a new product line related to the heirloom line. It is one that will allow customers to customize the looks of the dolls they purchase through the New Heritage

Since the beginning of time, toys have often been an indicator of the way a society behaves, and how they interact with their children. For example, in ancient Greece, artifacts recovered there testify that children were simply not given toys to play with as in the modern world. The cruel ritual of leaving a sick child on a hillside for dead, seems to indicate a lack of attention to the young (Lord 16). The same is true of today’s society. As you can see with the number of toy stores in our society, we find toys of great value to our lives and enjoy giving them to children as gifts. Ask just about any young girl what she wants for Christmas and you’ll undoubtedly get the same answer: “A Barbie.” But what exactly has caused

However, the number of items was limited. The proposed expansion would create an “All Seasons Collection” of apparel and gear covering all four season of the year. It would expand the number of matching doll and girl clothing items available

Production was New Heritage's largest division as measured by total assets, and easily its most asset-intensive. Approximately 75% of the division's sales were made to the company's retailing division, with the remaining 25% comprising private label goods manufactured for other firms. Table 1 summarizes the division's various sources of revenue and operating income.

Barbie, at the age of 41, is one of the longest living toys in America. Analyzing her early history can give a person a look into the societal trends and culture of the late 1950's and early 1960's. There is evidence of fashion innovations in Barbie's wardrobe. Also, one can see the perception of females by society, such as what they should look like, how they should act and dress, as well as what their future goals could be. The following essay follows Barbie's history from 1959 to 1963, covering her development, her appeal to children, and her existence as a cultural artifact of the time period.

1. Compute the Free Cash Flows for the years 2010 to 2020 for both projects

There are different ways how Toys “R” Us can reach profitability by obtaining customers year-round. The company should appeal to its established historic customer base that will respond to its stores because of their loyalty to the company. The company can do this by opening new product lines. They can focus on obtaining products that are high in demand by their competitors. They can use their already established company popularity to obtain strong supplier relationships for the additional products. These will supply the company with an additional source of income and the

A. Ruth Handler, co-founder of Mattel, observed her daughter Barbara playing with paper dolls. This sparked Ruth's vision to create a 3-D doll for girls to play out their imagination.