Business in Action (8th Edition)
Business in Action (8th Edition)
8th Edition
ISBN: 9780134129952
Author: Courtland L. Bovee, John V. Thill
Publisher: PEARSON
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Question
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Chapter 9, Problem 1CTQ
Summary Introduction

Case summary:

Company K is a manufacturer of sound pickups for the instrument electric guitar. The company becomes more popular by filling the gap among the mass produced and the fully custom guitars. The secret of the company’s success is that it adapts the standardized services and products according to the taste and preference of the customers.

The company had a collaboration with the new technology and old craftsmanship. This technic made Company K to produce 1,000s of guitars in a year. This blend of human touch and automation made a huge success for Company K.

Characters in case:

  • Company K

To discuss: Whether Company K need to expand its production capacity to handle more demand in future.

Expert Solution & Answer
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Explanation of Solution

In general, companies need to have a monitor on the fluctuation of demands to decide on the production capacity.

It is hard to make discussions on the 2 weekly increase in demand and the production process is of automation and human touch. If there is any slack in the automation, the production capacity can be adjusted but when there is any slack in the human touch then it is difficult to adjust the product capacity.

Thus, a 2 weekly raise in order from the website cannot determine the increase in demand for a longer period.

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