Chad's Creative Concepts Chad's Creative Concepts desins and manufactures weed fritue. Founded by Chad Thomas onthe banks of Lake Exe in Sandusky, Ohi, the company began by producing custom-made wooden furitue fr vacaton cabins lo cated along the coast of Lake Erie and on nearby Kel’ Island and Bass sland, Bang an “outdoors type rimsel, Thomas eiginaly wanted to bring ‘abt ofthe outdoors" inside, Chad's Creative Concepts developed solid reputation tor create designs and high-quality workmanship. Sales even- tually encompastd the entre Great Lakes region. Along with growth came _2déitional opportunities. “Trattionaly, he company focused entirely on custom-made furniture, withthe customer specyig the kd of wood fram wtch the pice would be ‘made. As the companys repuaion grew and sles increased, th sales force began seling some ofthe mare papular feces to etal {urifure ous, This ‘move into etal outlets led Chats Creative Concepts into the production of ‘a move standard ne of future. Buys ofthis ine were much mare price ‘Sengitve and imposed more srngent elvry requirements than did clots {or the austom ine, Custam-deslgnod tutu, hex, conned to dom ale sales, accounting for 60 percent of woe and 75 percent of dl sales. Curent, the compary operates a single manufacturing pacessin Sandusky, ‘wher Boh custom furiture ard standard funiture are manufactured. The ‘equipment is manly genera purpse in nature to provide the Hoxbiy needed for procucng evstom pioes of furture. Te ayo puts gether ssn one section of te faci ates In anaes, and soon. The quality of the finished ‘product rellecs the quality othe wood chosan and the craftsmanship of in ‘ual woekos, Both custom and standard uriture compet for pressing time on the same oquirrent bythe same crttspeont During the past fow months, sales of the stancar line steacy in creased, leading te more regular Scheduling of this produc ine, However, when scheduling vado-otls had to be made custom funiture was always von prioty because of s higher sales and prof margins, Thus, scheduled fats of standard furiture pecs wore let sing eround the plant in various sages of compietn. ‘As he reigns the progress of Chad's Creatwe Concept, Thomas is pleas to note thatthe company has grown, Sales of custom future r= ‘main song, and sales of standard pieces are steadily increasing, Howe, finance and accounting indeae that profits are not what they should be Costs associated withthe standard ine are rising. Doars ae being tod up in ‘inventory both in aw materia and werk in-process. Expensive public ware house space his o be rented to accommodate the inventory volume. Thomas aso is concemed with increased load times for both custom and standard ‘des, which are causing lange promised eliery times. Gapacty is being pushod, and no space i eft inthe plant for expansion. Thomas beains 2 careful assassment ofthe vera impact thatthe new standard ine having con his manufactsing process. QUESTIONS +1. whet types of decisions must Chad Thomas make daily for hs com: pary's operations torun effectively? Over the fang run? 2. How id sales and marketing aft operations when they began to so stendard pieces to retail cutlets? 3 Haw has the move to producing standard furture affects the com- pany fnancal stuctre? 4. What might Chad Thomas have done citferenty to avoid some ofthe robles he nw faces? “Saris ase was prepared by Dx Bccke Salat, Wee Fees ners, tai for Casromdscsson. Capit © Brooke San pint by perms,