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Waqas Sher Zaman, Assignment: Brief 1, MBA 731-01(F14), Prf! "ger #isie$,Se%tem&er 1', 014

To: Prof. Roger Kisiel

From: Waqas Sher Zaman

Date: September 19, !1"S#b$e%t: &ha'(s &reati)e &on%epts

Introduction: &ha'(s &reati)e &on%epts is in)ol)e' in 'esign an' man#fa%t#ring of *oo'en

f#rnit#re. The %ompan+ *as fo#n'e' b+ &ha' Thomas on the bans of -ae rie in San'#s+,

/hio. 0n the beginning the %ompan+ onl+ pro'#%e' %#stom ma'e *oo'en f#rnit#re for )a%ation%abins. e%a#se of the %reati)e 'esign, high q#alit+ pro'#%t an' *ormanship the %ompan+

ma'e a soli' rep#tation in the *oo'en f#rnit#re in'#str+ an' their sales in%rease' b+ great

n#mber. 0n%rease in the sales bro#ght a''itional gro*th opport#nities an' instea' of $#st fo%#sing

on selling the %#stom ma'e *oo'en f#rnit#re &ha'(s &reati)e %on%ept starte' to sell its pop#larpie%es to the retail f#rnit#re o#tlets. )en tho#gh the %ompan+ has gro*n an' sales of %#stom

f#rnit#re remain strong *hereas, the sales of stan'ar' f#rnit#re *as in%reasing b#t, ho*e)er,

%ompan+ *as not able to obtain the profits as it *as e2pe%te'.

Analysis: &ha'(s &reati)e &on%ept has limite' %apabilities an' reso#r%es an' the %ompan+ *as

not able to %ope *ith in%rease' b#siness an' %#stomer 'eman's, an' therefore the operations ofthe %ompan+ *as affe%te' b+ sales an' mareting *hen the %ompan+ starte' to sell stan'ar'

pie%es to retail o#tlets. The %ompan+ pro'#%tion fa%ilit+ *as limite' an' *as not able to meet the

in%reasing sales an' mareting e2pansion *hi%h lea' to in%rease in the pro'#%t lea' time of both%#stom an' stan'ar' line f#rnit#re. This *ill lea' to re'#%tion in performan%e an' q#alit+ %ontrol

be%a#se of e2tra *or loa', rigi' pro'#%tion s%he'#le an' limite' h#man reso#r%es.

F#rthermore, the %ompan+ has to bear a''itional *areho#se %osts *hi%h *ere rente' to store

materials an' #nfinishe' pro'#%ts.

D#e to limite' %apabilities an' reso#r%es of &ha'(s &reati)e &on%ept *as #nable to meet the

in%reasing sales an' %#stomer 'eman'. This le' to in%rease in %osts be%a#se of in%rease inin)entor+, both in ra* material an' *or in pro%ess *hi%h ha' to be store' in e2pensi)e rente'

p#bli% *areho#ses that has le' to in%rease in 'eli)er+ times to the %#stomers. This res#lte' in the

gra'#al re'#%tion of %ompan+(s *oring %apital, in%rease' &/3S an' longer Da+(s Sales in0n)entor+, hen%e affe%ting the %ompan+(s finan%ial str#%t#re.

Conclusion: 0n or'er to a)oi' the problems *hi%h &ha'(s &reati)e &on%ept fa%es no* is at firstthe %ompan+ sho#l' ha)e i'entifie' the pro'#%tion %apa%it+ of the plant an' thereafter the+

sho#l' ha)e ma'e an' effi%ient an' effe%ti)e plan that in or'er to %ope *ith in%reasing sales an'

%#stomer 'eman's *itho#t negotiating *ith the performan%e, q#alit+ an' pro'#%t lea' time.4nother alternati)e is the e2pansion of b#siness *ith the in%rease in sales b+ p#r%hase of ne*

fa%ilities, eq#ipments an' hiring a''itional emplo+ees to an' thereafter the separating thestan'ar' f#rnit#re pro'#%tion from the %#stom ma'e f#rnit#re to meet the in%reasing sales an''eman's. F#rthermore, the %ompan+ sho#l' ha)e ma'e an effort to fin' %heaper *areho#ses to

store material an' *or in pro%ess.