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Process Control at Polaroid A

Solution Id Length Case Author Case Publisher
2610 1389 Words (10 Pages) Steven C. Wheelwright, H. Kent Bowen, Brian Elliott Harvard Business School : 693047
This solution includes: A Word File A Word File

To summarize the case, initially, the company had a lot of problems related to defective products, and the expenses related to scrap were quite high. During the 70s the industry demand for Polaroid cameras was high, hence the company tried to reduce its prices and wanted to launch a new product. Also, in that very year, the company tried to curtail the sample testing. Due to the lower defect percentage, it was concluded that with lower sample size, the number of defective cartridges would not get impacted and will operate to increase operational efficiency. And as the sample size was getting bigger, the management was identifying more problems and a lot of batches were rejected. Then the company had thought about initiating a project called "Greenlight" which was introduced to make sure that costs of defected samples are reduced, secondly, the quality of the end products is improved and the overall organizational environment is upgraded. The workers were a bit hesitant to embrace the change, but the company should be able to motivate them and educate them about the importance of the new project in the organization.

Following questions are answered in this case study solution:

  1. What is the magnitude of the cost of quality problems at the R2 plant? How effective were its past procedures for quality management?

  2. Using the data in the exhibits and the note on process control charts, construct and analyze the appropriate SPC charts. What conclusions should Rolfs draw?

  3. What recommendations would you make to Rolfs in order to address both near- and longer-term issues?

Case Study Questions Answers

1. What is the magnitude of the cost of quality problems at the R2 plant? How effective were its past procedures for quality management?

From the case given, we could understand that about 67% of the cost of production at the plant site was characterized by the whole cost of supplies, and a few other costs include, the charge of labor, both the direct and indirect ones, fixed costs related to administration purposes and also the allocated one.  The actual monetary value of "quality control", the scrap produced through it, and the whole manufacturing procedure concerned were the key issues linked to the huge number of quality problems.

From the case, it can be seen that the plant had about 125 individuals dedicated just to monitoring and controlling the quality back in the year 1984 when they used to test the cartridges. The expense related to testing these cartridges was approximately about $540,000. The operative sample scraped additionally included about $740,000 in terms of the costs and the end products which had complete shopping "cartons" were refused due to extreme testing defects resulting in an extra almost $ 2 Mn in the scrap. And then if we try to sum all the relevant costs discussed above, we come up to the value of somewhere about $ 3.2 Mn, and the net profits, after deducting all the relevant costs, summed up to around $25.7 Mn in the year 1984. That means the company's expenditure on quality control and monitoring was approximately around 12.8% of the total profits, which is a very significant percentage. 

The company's past processes related to quality control were a bit effective. Firstly, the amount of testing done on the finished products was about 15 samples from every pile, in total consisting of more than 5000 cartridges. And in the year 1984, the researchers had declined more than 50 cartridges from every pile, which is around 1% of the total.

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