Academic journal article Journal of the International Academy for Case Studies

New Product Innovation at Chet's Fan Manufacturing, Inc. (Cfm)

Academic journal article Journal of the International Academy for Case Studies

New Product Innovation at Chet's Fan Manufacturing, Inc. (Cfm)

Article excerpt

CASE DESCRIPTION

The primary subject matter of this case concerns the application of target costing, an accounting approach applied during product or process design. Secondary issues examined include using activity based costing data during product and process design, applying entrepreneurial thought and action principles, and pursuing entrepreneurial opportunities within an established organization. The case has a difficulty level of three. The case is designed either to be taught in one and a half class hours and is expected to require about 3 hours of outside preparation by students or in two 75 minute classes with less than 2 hours of outside class preparation.

CASE SYNOPSIS

CFM, established to manufacture and distribute ventilation equipment, was known for superior products, dependable service, competitive pricing, and custom fans. Initially CFM's sales were to original equipment manufacturers of industrial and commercial fans. Seeking growth, CFM entered the residential market with standard fans and blowers to exhaust bathrooms, laundries and kitchens. These products were sold to builders through major wholesalers in Canada and the US. The quality of CFM's products caused Home Depot to offer the company a two year contract for 40,000 basement ceiling fans, sold under Home Depot 's brand, and exclusively in their stores. …

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