Solved: Crescent Company an electronics firm buys circuit

boards and m
Crescent Company an electronics firm buys circuit boards and m

Crescent Company, an electronics firm, buys circuit boards and manually inserts various
electronic devices into the printed circuit board. Crescent sells its products to original equipment
manufacturers. Profits for the last two years have been less than expected. Mandy Confer,
owner of Crescent, was convinced that her firm needed to adopt a revenue growth and cost
reduction strategy to increase overall profits.
After a careful review of her firm’s condition, Mandy realized that the main obstacle for
increasing revenues and reducing costs was the high defect rate of her products (a 6 percent
reject rate). She was certain that revenues would grow if the defect rate was reduced
dramatically. Costs would also decline as there would be fewer rejects and less rework. By
decreasing the defect rate, customer satisfaction would increase, causing, in turn, an increase
in market share. Mandy also felt that the following actions were needed to help ensure the
success of the revenue growth and cost reduction strategy:
a. Improve the soldering capabilities by sending employees to an outside course.
b. Redesign the insertion process to eliminate some of the common mistakes.
c. Improve the procurement process by selecting suppliers that provide higher quality circuit
boards.

Required:
1. State the revenue growth and cost reduction strategy using a series of cause-and effect
relationships expressed as if-then statements.
2. Illustrate the strategy using a strategy map.
3. Explain how the revenue growth strategy can be tested. In your explanation, discuss the role
of lead and lag measures, targets, and double-loop feedback.

Crescent Company an electronics firm buys circuit boards and m

ANSWER
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