TRIM Inc. Case Study And Analysis Help With Solution

TRIM Inc. Case Study And Analysis Help With Solution

Taylor’s Reduction Improvement Machines Inc., (TRIM), produces exercise equipment. TRIM started in 1950 when
Henry Taylor decided to create a company to produce products that he could use and enjoy. As a navigator in the
Air Force during World War II Henry had released his anxiety by running and lifting weights. He had been trained
by the best the Air Force had to offer and wanted to build and provide equipment that anyone could use to build the body while maintaining the tranquility of the soul. Following that vision, Henry had gathered a few of his trainers and with the financial backing of some of his fellow officers and friends he started TRIM in the family garage.
In 2008 the company has a mature market line of reliable products. The TRIM line is regarded as high quality at a
reasonable price. Customers feel that they are paying for the product and not for the name. However, customer loyalty is high and some marketing consultants advised Henry to raise the prices of the TRIM line. Henry refused. As a result he increased the loyalty of his customers to an even higher level.
Recently the demand for robust exercise equipment for home and club use has dramatically increased. TRIM Inc.
has maintained their sales volume but they have been gradually losing market share of an ever expanding market
for exercise equipment as clubs and individuals turn to newer innovative machines outside of TRIM Inc.’s
repertoire. Therefore the new company president, Summer Taylor, a former swimsuit model, Miss America first runner
up, and Smith College alum has decided to try and develop new profitable products for the market. Henry turned over “his baby” to “his baby”. Summer was the first born child of Henry and Marie Taylor.
Summer’s Research and Development team, headed by Edward Smith, have recently developed a new product that
they feel will be well received. The product is a new exercise machine that in the testing phase dramatically reduced waistlines in as little as 14 days. The initial marketing results have indicated that the market is firm for this product and that a price of $100 would be well received. At that price, TRIM Inc. believes that 7,500 machines can be sold each year for the next two years. The material cost for each unit is $60. One of the major benefits of the new product line is that the new product can be produced on the existing equipment.

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Summer called a meeting of the management team. During the meeting Summer and Edward discussed the
production needs and sales potential of the Waist Line Reduction Machine, (WLRM), with Chris Kelly, the head of
production, Montgomery Bradford, the Vice President of Marketing and Joshua Sears, the Controller. Edward stated
that given the flexibility of the current equipment, and the skill of the setup personnel, the existing equipment could be used to produce the new machines.
In fact, Edward stated that he had designed the new product so that it could be produced using the existing processes and machines. The skill set of the current labor force is considered to be sufficient to
produce this new product. During the meeting the following discussion took place:
Based on the projections in Exhibits 1 – 4 for the total resource utilization of the WLRM and the BB products on their preexisting equipment, TRIM Inc. management is still trying to determine if the new exercise equipment should be produced.
a) Determine the Target Cost for the Waist Line Reduction Machine.
b) Determine what TRIM should do. Should they:
a. Make 7,500 WLRMs?
b. Make 10,000 WLRMs?
c. Make 20,000 BBs?
d. Make the full demand for both the Bicep Builder (20,000 units) and the Waist Line Reduction Machine (10,000 units).
f. Build the full demand for the Bicep Builder (20,000 units) and the original lower volume for the Waist Line
Reduction Machine (7,500 units).
g. Make some combination of the volumes of the WLRM and the BB based on a profit maximizing methodology.
And double check the optimal solution with Linear Programming
c) For each alternative in (b) include the impact on TRIM’s profit. Rank the alternatives and indicate your choice. Be sure to explain the rationale behind your choice.
d) What additional information would you like before making a decision about adding these new products?
e) How would you track the success of this or any new product line or lines?
f) How would you monitor production?
g) What information would sales need in order to promote the optimal level of product sales?
h) What would you like to know about the pre-existing product lines? How might this information change your
previous responses?

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