Problem identification:

A fireplace was reported inside one of the Black and Decker Space maker Plus Coffee maker by one of
the customer. This key product is a new introduction for Black & Decker's Household Product Group
(HPG). Though it was not a potentially dangerous situation as the fire was limited to the coffee maker.
But the issue was probed further and it was found that the product had met the requirements of the
Underwriter’s laboratory, during the design test stage. The lab test showed that even though there were
two temperature control units fitted in the coffee makers, there was overheating when ever the feed
from the reservoir to the heater element was clamped which deprived the water unit and hence got
overheated. This was an implication of the substantial risk of a product hazard.

Pertaining to this the HPG’s president faced two problems and had to decide on:

1) Is there a need to recall the product, how to manage it and what are after-recall success factors?
2) Should a recall be done with respect to cash refund or a product replacement?

Should a product be recalled?

According to CPSC guidelines, the seriousness of the safety problem should be analyzed

 Product Usage: Significant scope of high product usage

 Likelihood of injury: High as electric item, if consumer is in close proximity it could be dangerous
 Physical environment or defect manifestation: Significant risk in multiple locations as coffee can
be consumed at multiple social locations at multiple times
 Legal enforcements on product liability, public health and safety: Under US Consumer health
safety act, knowledge of a health hazard places the onus upon the manufacturer for the
immediate recall
 Number of defective products and population group exposure: Number of the potential
defective products percentage wise is 100% of all units manufactured, while population
exposure involves families and households.

Sources of serious product defects:

According to CPSC guidelines a product would be recalled if a dangerous defect would arise in

 In functioning of the product

 In Design of the Product
 Contents, finish, instructions, materials etc. of the product

Cost Calculations for recalling a product: