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)