1. Business
  2. Operations Management
  3. please read this article and answer 14 8 and 9...

Question: please read this article and answer 14 8 and 9...

Question details
Please read this article and answer 1-4, 8, and 9 don’t copy from previous post please 👍
CASE CASE 5.1 Johnson Toy Company Located in Biloxd, Mississippl, the Johnson Toy Company Lori, those present included Carolyn Coggins, the firmis is celebrating its seventy-fifth year of business. Amy sales manager; Cheryl Guridi, the logistics manager Johnson, who is president, and Lori Johnson, who is vice Greg Sullivan, the controller; and Kevin Vidal, the plant president, are sisters and are the third generation of their engineer. Coggins had just reported that she believed family to be involved in the toy business. The firm man there were between 1.5 million and 2 million Jungle Jim ufactures and sells toys throughout the United States. the Jogger dolls in retail stores, and Sullivan had indi The toy business is very seasonal, with the majority of cated there were 2,567,112 complete units in various sales occurring before Christmas. A smaller peak occurs public warehouses in Biloxi. Vidal sald that he was stil in the late spring-early summer period, when sales of trying to count all the unassembled component parts, outdoor items are good. adding that one problem was that they were still being The firm reles on several basic designs of toys- received from suppliers, despite the cancellation. ich have low profit margins but are steady sellers Amy said, Lets wait a few weeks to get a complete and on new designs of unconventional toys, whose count of all the dolls and all the unassembled compo- introduction is always risky but promises high profits if nent parts. Lori, Im naming you to work with Carolyn the item becomes popular. The firm advertises regularly and Kevin to develop recommendations as to how we on Saturday morning television shows for children.can recycle the Jungle Jim item into something we can Late last year, just before Christmas, the Johnson sell Given the numbers involved, Im willing to turn out Toy Company introduced Jungle Jim the Jogger doll, mod- some innocuous doll and sell it for a little more than the eled after a popular television show. Sales skyrocketed, cost of recycling because we cant take a complete loss and every retailers stock of lungle lim the Jogger dols wasnall these damned Jungle Jim dolls Greg says we have sold out in mid-December, the Johnson Company could early 2.6 million of them to play with, so lets think orf have sold several million more units if they had been something available before Christmas. Based on the sales success of Your 2.6-million figure may be low, said Coggins this doll, Amy and Lori made commitments to manufac Dont forget that there may be nearly 2 million in the ture 10 million Jungle Jim the Jogger dolls this year and to hands of the dealers and that they will return them. introduce a wide line of accessory items, which they hoped every doll owner would also want to have. Production was defective. Thats the only reason we accept returns ell under way, and many retailers were happy to accept The retailers made a poor choice. Its the same as if Return them? questioned Amy. Theyre not dolls in January and February because they were still a they ordered sleds and then had a winter with no snow fast-selling item, even though the toy business itsef was We sluggish during these months. are no more responsible for Jungle Jims they are! sex life than Cheryl Guridi spoke up: You may be underes. Unfortunately, in the aftermath of a Valentines Day party in Hollywood, the television actor who por timating the problem, Amy. One of our policies is to trayed Jungle Jim the Jogger became involved in a widely accept the dealers word as to what is defective, and right publicized sexual misadventure, the details of which now there are a lot of dealers out there claiming defects shocked and disgusted many readers and TV viewers, in the Jungle Jim dolls. One reason that Kevin cant get and we would be embarrassed to describe them. Ratings an accurate count is that returned dolls are showing up of the television series plummeted, and within a month it on our receiving dock and getting mixed up with our in- had been dropped from the air. On March 1, the Johnson stock inventory Company had canceled further production of the Jungle Jim the Jogger dolls, although it had to pay penalties to Were not paying the freight, also, are we? some of its suppliers because of the cancellation. The company had little choice because it was obvious that paying the freight just to get rid of them sales had stopped How can that happen? asked Amy, angrily So far, no, responded Guridi. The retailers are Weve received several bills in which the retailer On April 1, a gloomy group assembled in the has deducted the costs of the Jungle Jim dolls and of the Johnson Company conference room. Besides Amy and freight for shipping them back from what he owes
assume that risk, the retailer is willing to take more of Informal ones, was Cogginss response. It How do the goods get back to us under these cir The salespeople either keep them and shuffle Greg, said Amy, do our records reflect these Oh, fairly well, was his response. We lose track said Sullivan. That was one item I wanted to raise while we were together. our merchandis Are there no limits to this policy? asked Amy. We cant allow that! exclaimed Amy Dont be so sure, responded Sullivan. The account in question has paid every bill hes owed us on depends on the salesperson and the account. I dont time for 40 years. Do you want me to tell him we wont think there is much abuse, although there is some. reimburse him? This is worse than I imagined, said Amy. Just cumstances? asked Amy. what are our return policies, Lori? Well, until today, I thought we had only two, said them about to other customers or-if its a real loser they ask us what to do, replied Coggins. Lori. One for our small accounts involves having our salespeople inspect the merchandise when they make a sales call. They can pick it up and give the retailer credit off the next order returns and transfers? Sometimes they pick up more than defective mer- of individual items and quantities, but if the salesperson chandise, added Coggins. Often, theyll take the slow is honest-and I think ours are-we can follow the dol movers out of the retailers hands. We have to do that as lar amount of the return to the salespersons inventory a sales tool to another retailer, or back here to us. We do not have Thats not quite right, interjected Vidal. good controls on the actual items that are allowed for Sometimes, the returned items are just plain shop returns. Kevin and I have difficulty in reconciling the worn-scratched, dented, and damaged. That makes it value of returned items that wind up back here. Carolyns hard for us because we have to inspect every item and records say theyre okay for resale, and Kevin says theyre decide whether it can be put back into stock. When we too badly damaged. think a particular salesperson is accepting too many shopworn items, we tell Carolyn, although its not clear to goods back into our working inventory, said Guridi. me that the message reaches the salespeople in the field. That way I know exactly what I have here, ready to ship. I insist on the reconciliation before we allow the I wish I had an easy solution, said Coggins. We You know, Im finding out more information used to let our salespeople give credit for defects and about inventories and returns than I thought existed Too many trips to Paris, dearest, said Lori, and Amy decided to ignore Loris remark, and she then destroy everything out in the field. Unfortunately, said Amy some abused the system and resold the toys to discount stores. At least now we can see everything were buying the others all suppressed smiles back. I agree we are stuck with some shopworn items, but our salespeople are out there to sell, and nothing looked at Guridi and asked, Are you satisfied with your would ruin a big sale quicker than for our salespeople to start arguing with the retailer, on an item-by-item basis, control over inventories, Cheryl? I have no problem with the ones here in Biloxi, was to whether something being returned happens to be Guridis response,but Ihave an awful time with the inven tories of return items that salespeople carry about with is there a limit to what a salesperson is permitted them, waiting to place them with another retailer. Im not always certain theyre getting us top dollar, and each sales- Well, not until now; responded Coggins. But person knows only his or her own territory. When Carolyn with this Jungle Jim snafu we can expect the issue to and I are trying to monitor the sales of some new item, we occur. In fact, I have several phone queries on my desk never know whether its bombing in some areas and riding to allow a retailer to return? asked Amy concerning this 1 thought Id wait until after this meet around in salespeoples cars as they try to sell it again. ing to return them Have you now described our returns policy, such Well, I think wed better establish limits-right as it is? asked Amy, looking at everybody in the room. now, said Amy No, was the response murmured by all. Sullivan Be careful.said Lori. When I was out with the spoke: For large accounts we deduct a straight 2 percent salespeople last year, I gathered the impression that off wholesale selling price to cover defectives, and then some were able to write bigger orders by implying that we never want to hear about the defectives from these wed take the unsold merchandise back, if need be. If we accounts at all
That sounds like a better policy, said Amy. How knowledge about volume or patterns of returns well is it working? until its too late. Thats their very nature Up until Jungle Jim jogged where he shouldnt, it Guridi asked, Could we have field representatives worked fine. Now a number of large accounts are plead- who do nothing but deal with this problem? The retail- ing special circumstances or threatening to sue if we ers would be told to hang onto the defectives until our dont take back the dolls. claims reps arrive They have no grounds for suit, declared Amy Coggins replied, That would be expensive, right, said Coggins, but several of their buyers are refusing to see our sales staff until the matter is resolved. I just heard about this yesterday and meant to bring it up in todays meeting. I consider this very because most retailers have little storage space for any thing and would expect our claims rep to be there imme- diately. Besides, it might undermine our selling efforts if retailers could no longer use returns to negotiate with as serious they talked about new orders. Damn it! shouted Amy, pounding the table with That may be, interjected Amy, but we cann her fist. I hope that damned jogger dies of jungle rot! continue having each salesperson tailoring a return pol Were going to lose money this year, and now youre all icy for each retailer. Thats why were in such a mess with telling me how the return policy works, or doesnt work, the jogger doll. We have to get our return policy estab- as the case may be! Why cant we just have a policy of all lished, made more uniform, and enforced. We cannot go being final and telling retailers that if there is an honest defect they should send the goods back here to us in good old Biloxi? through another fiasco like Jungle Jim the Jogger for a long time. Were going to lose money this year, no mat ter what, and I have already told Kevin that there will be Most of the small accounts know nothing about virtually no money available for retooling for next years shipping, responded Vidal. They dont know how to new products pack, they dont know how to prepare shipping docu ments, and they cant choose the right carriers. You Questions ought to see the hodgepodge of shipments we receive 1. Prom the standpoint of an individual concerned with from them. In more cases than not, they pay more in accounting controls, discuss and evaluate Johnson Toy shipping charges than the products are worth to us. ld Companys present policies for handing returned tems rather see them destroyed in the field. 2. Answer Question 1, but from the standpoint of an indi Sullivan spoke up. Id object to that. We would vidual interested in marketing. need some pretty tight controls to make certain the 3. Propose a policy for handling returns that should be goods were actually destroyed. What if they are truly adopted by the Johnson Toy Company. Be certain to list defective, but improperly disposed of, then fall into the circumstances under which exceptions would be allowed. hands of children who play with them and the defect Should it apply to the Jungle Jim dolls? causes an injury? Our name may still be on the product, and the childs parents will no doubt claim the item was purchased from one of our retailers. Will we be liable? to them, who should receive coplest Why cant we have everything come back here? We have 5. Assume that it is decided to prepare a statement on returns enough volume of some returned items that we could to be distributed to all retailers and that it should be less think in terms of recycling parts. 4. Should this policy, if adopted, be printed and distributed to all of the retailers who handle Johnson Toy Company products? Why or why not? If it should not be distributed than a single double-spaced page. Prepare such a statement 6. On the basis of the policy in your answer to Question 3 Vidal responded, Recycling is a theoretical solu- tion to such a problem, but only in rare instances will it develop instructions for the Johnson Toy Company distri- pay. In most instances the volume is too small and the bution and accounting departments with respect to thelr cost of taking toys apart is usually very high. However, roles and procedures in the handling of returns. the Jungle Jim product involves such a large volume that 7. Assume that you are Cheryl Guridi, the firms I it is prudent and reasonable to think up another product manager. Do you think that the returns policy favored by the logistics manager would differ from what would be utilizes many of the parts. It would even pay to modify some machines for disassembling the Jungle & Until the im doll best for the firm? Why or why not? Question 3 takes effect, how would you handle the imme diate problem of retailers wanting to return unsold jungle discussion,: said Lori, one obvious: We will never have very good im the Jogger dolls
Questions 1. From the standpoint of an individual concerned with accounting controls, discuss and evaluate Johnson Toy Companys present policies for handling returned items. 2. Answer Question 1, but from the standpoint of an indi- vidual interested in marketing. 3. Propose a policy for handling returns that should be adopted by the Johnson Toy Company. Be certain to list circumstances under which exceptions would be allowed. Should it apply to the Jungle Jim dolls? 4. Should this policy, if adopted, be printed and distributed to all of the retailers who handle Johnson Toy Company products? Why or why not? If it should not be distributed to them, who should receive copies? 5. Assume that it is decided to prepare a statement on returns to be distributed to all retailers and that it should be less than a single double-spaced page. Prepare such a statement. 6. On the basis of the policy in your answer to Question 3, develop instructions for the Johnson Toy Company distri- bution and accounting departments with respect to their roles and procedures in the handling of returns. 7. Assume that you are Cheryl Guridi, the firms logistics manager. Do you think that the returns policy favored by the logistics manager would differ from what would be best for the firm? Why or why not? 8. Until the policy you recommend in your answer to Question 3 takes effect, how would you handle the imme- diate problem of retailers wanting to return unsold Jungle Jim the Jogger dolls?
Read, summarize and answer chapter questions 1-4; 8, regarding the Johnsons Toy case. (number and explain your answers so someone reading it will know what you are talking about without going to the book to read the question). Due Feb 1 Always number your responses. Also answer the following question; 9. Give a complete overview of how you would handle the entire situation. This does not need to follow any of the suggestions from the case. Be sure to include logistics, messaging, pricing, contracting, timing and any assumptions that would be required to execute your plan.
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution