e-Razor, Incorporated After four years as a new start-up, e-Razor has expanded i
ID: 414155 • Letter: E
Question
e-Razor, Incorporated
After four years as a new start-up, e-Razor has expanded its line of programmable razors to include both linear and rotary models, as well as women’s and teenagers’ versions. Programming is simply done by the user through icons that adjust the speed of the cutting head, adjust the distance from the skin (to avoid ingrown hairs or give the sexy look of a day’s growth), activate the trimmer, and so on. All the razors use the same electronics module to keep costs down. e-Razor is now planning their budget for next year, including their investment in razor re- search, development, and product improvement, as well as investments in their production process to improve quality and lower costs. Eight projects have been proposed for top management’s consideration, as follows:
A. Marketing would like to see the programmable functions extended to stay ahead of the competition, which might involve a new electronics module, the brain of the razor. Projected cost: $25,000.
B. Manufacturing believes a mixed-model flow line would reduce costs and improve quality at the same time. To a large extent, the same production equipment as currently used in their job shop process could be reconfigured for the line and only a few new items would be needed. Projected cost: $11,000.
C. Marketing would also like to see the programmable feature extended to other health/ beauty products, such as hair dryers, facial saunas, and such. Projected cost to investigate and report: $16,000.
D. Sales has received feedback from customers that an engineering modification to the razor head allowing the razor to be used in the shower would make it much more useful. The production process would need to be modified somewhat. Projected cost: $9000.
E. Engineering has been evaluating a new user interface that would allow many new functions to be easily added. Moreover, it is faster and easier for the user to program. The current production process can be used. Projected cost: $17,000.
F. A consultant in chemistry who has been investigating the properties of tiny strands of cut hair for the firm believes there may be a way to keep the shaving head clean without opening the head enclosure and emptying or rinsing the head—a distasteful task for most people. Such a change would substantially change the production process. Projected cost: $22,000.
G. Sales has had inquiries from customers about whether a cheap, limited-use version of the razor is available for business trips and vacations. A new production line would be required. Projected cost: $28,000.
H. Along the same line, customers have asked if a purely battery-driven (nonchargeable) razor is available. This would primarily involve a change in the type of battery being used; the production process would be only slightly affected. Projected cost: $8000.
I need a Summary of the Facts for this case. ( 1 Page)
Explanation / Answer
E-razor , a four year old start up whose product is programmable razors , wants to plan its budget for the coming year. Eight projects have been considered and their purpose , value addition and investments required have been discussed. The project details are as below.
Project Proposed
Purpose of the project
Projected cost
New electronics module
Stay ahead of competition
$25000
Mixed- model flow line
Reduce costs and improve quality
$11000
New products like programmable healthy/beauty products such as hair dryers, facial saunas
New products
$16000
An engineering modification to allow razor to be used in shower too.
To make razors much more useful.
$9000
New user interface
Faster and easier for user to program and many new functions can be easily added
$17000
Change in the production process
To keep the shaving head clean without opening the head enclosure and emptying or rinsing the head
$22000
A new production line
To introduce cheap, limited use razor for travel purpose
$28000
A new type of battery and a slight change in production process
To develop a purely battery driven razor.
$8000
Project Proposed
Purpose of the project
Projected cost
New electronics module
Stay ahead of competition
$25000
Mixed- model flow line
Reduce costs and improve quality
$11000
New products like programmable healthy/beauty products such as hair dryers, facial saunas
New products
$16000
An engineering modification to allow razor to be used in shower too.
To make razors much more useful.
$9000
New user interface
Faster and easier for user to program and many new functions can be easily added
$17000
Change in the production process
To keep the shaving head clean without opening the head enclosure and emptying or rinsing the head
$22000
A new production line
To introduce cheap, limited use razor for travel purpose
$28000
A new type of battery and a slight change in production process
To develop a purely battery driven razor.
$8000
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