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Case 2 - Freedom Jeans Summary (4.22.08)

Case 2 - Freedom Jeans Summary (4.22.08) - Case 2 Freedom...

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Case 2: Freedom Jeans Background Freedom Jeans Inc. is a high quality manufacturer of jeans in the U.S. Its target customers include men, women and children. The company manufactures jeans in different facilities throughout the U.S and sells to its customers via department stores. In recent years, the company’s profits have been falling due to increased competition from overseas suppliers. Since production overseas is much cheaper than it is in the U.S, foreign suppliers can sell their jeans at a much lower price than Freedom Jeans can afford to sell at. Freedom Jeans has to sell at 25% higher than its competitors to keep making a profit on its shipments. Recently, the company has decided to change its previous policy of not selling through discount outlets. Freedom Jeans has established several outlet stores throughout the country selling its excess inventory or overstocked items. Since the cost of reworking poor quality products is too high, and carrying cost of the inventory is even higher, this seemed like the only feasible option for Freedom Jeans. However, due to the slumping economy, the outlet stores have failed to meet profitability targets as were originally envisioned by the management. 1. Diagram the production process for Freedom Jeans I. Raw Materials 1) The raw materials are delivered to the cutting area of the factory. 2) The fronts and backs go to separate sewing areas where pockets are applied. 3) Two halves of the front or back are sewn together on two rows of machines. 4) Zippers or other fasteners are attached to the fronts, while the backs wait in a storage area in sewing. 5) Completed fronts and backs are sewn together and fitted with waistbands, loops, and hemming. Additional steps may be required for trimming or topstitching. II. Collection 1) Completed items are stacked beside operator’s machine to be collected in bundles. 2) Materials handlers move the completed items to direct laborers, in which each direct laborer receives a ticket per bundle collected. 3) Direct laborers turn in the tickets to indicate quantity completed. Incomplete bundles are counted towards the following business day’s production quota.
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III. Package 1) Completed jeans are inspected for quality. 2) Jeans are steam pressed and folded.
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