-Razor Incorporated Case study.
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 research, 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 (non-rechargeable) 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.
Questions:
Construct an aggregate project plan for this portfolio of projects and place the projects on the diagram with the diameters of the circles representing their projected costs.
Analyze the diagram for balance across the categories. Are there any gaps or excesses? What should the distribution of projects look like for a firm of this age?
The total budget for these projects is limited to $100,000. Which projects would you suggest implementing?