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Discopress Case Solution

Solution Id Length Case Author Case Publisher
1705 387 Words (3 Pages) Matt Fischer Darden Business Publishing : UV3565
This solution includes: A Word File A Word File and An Excel File An Excel File

A breakeven analysis on the two-production methods also favors MOD type of production. For manufacturing on demand, the company is breaking even on its investment of $10,000 at around 7300 units whereas for mass production the breakeven point occurs at around 16400 units of production. The stark difference between the two breakeven points is due to the larger profit margin of MOD. (Exhibit 3)

Following questions are answered in this case study solution

  1. Analysis

  2. Recommendations

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Case Analysis for Discopress Case Solution

1. Analysis

Looking at the Maximum units per title for the individual titles provided by FFE we can see that none of the titles of FFE reach the minimum unit level capacity before it’s license expiry for Mass production, which is 500. From this perspective it is better to use the MOD method than Mass production. (Exhibit 1)

Furthermore, the per unit profit margins for MOD and Mass production are $1.37 and $0.61 respectively for Discorpes. Therefore, it makes sense for the company to go ahead with MOD. On the other hand, FFE may want to go for Mass production since the per unit cost for FFE is lower ($2.36) for Mass production than for MOD ($3.87). But it should be considered that, as mentioned before, none of the titles reach the requirement for minimum Mass production and therefore the per unit price will likely be more than $2.36. It is better for FFE to opt for MOD as well. (Exhibit 2)

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