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Group 6 Case Analysis

The document is a case analysis submitted by students to their professor regarding production strategy recommendations for Better Fitness Inc. It summarizes that BFI manufactures home exercise equipment but is not generating much revenue with its current retail and non-retail sales strategy. The students analyzed the product cost and sale price data and used Excel to determine the optimal production mix to maximize profits. Their main recommendation is for BFI to partner with gyms to sell its exercise equipment in order to increase sales volumes and revenue streams beyond only the BodyPlus 100 and 200 machines.

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Nevan Nova
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85 views

Group 6 Case Analysis

The document is a case analysis submitted by students to their professor regarding production strategy recommendations for Better Fitness Inc. It summarizes that BFI manufactures home exercise equipment but is not generating much revenue with its current retail and non-retail sales strategy. The students analyzed the product cost and sale price data and used Excel to determine the optimal production mix to maximize profits. Their main recommendation is for BFI to partner with gyms to sell its exercise equipment in order to increase sales volumes and revenue streams beyond only the BodyPlus 100 and 200 machines.

Uploaded by

Nevan Nova
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Presented to the Decision Sciences & Innovation Department

Ramon V. del Rosario College of Business


De La Salle University - Manila
Term 1, A.Y. 2020-2021

In partial fulfillment
of the course
DSIMGTS (C33)
Case Analysis:
Production Strategy

Submitted by:
Lungay, Bea
Mamaril, Kristian Angelo
Nova, Nevan
Oh, Haein

Submitted to:
Sir. Lim, John Elvin

January 6, 2021
I. Overview
Better Fitness, Inc. (BFI) manufactures exercise equipment and recently released
two universal weight machines for the home exercise market, the BodyPlus 100 and the
BodyPlus 200. BFI has two price points which are; Retail and Non-Retail. Retail prices
are $ 1,680 for the BodyPlus 100 and $ 2,450 for the BodyPlus 200. While the Non-
Retail prices are $ 2,400 for the BodyPlus 100, it is $ 3,500 for the BodyPlus 200.

II. Objective
The primary objective is to determine how the company can maximize their
profit. The group used the equation 1141 BPa + 1511 BPb. Where “BPa” is assigned to
BodyPlus 100 and “BPb” is assigned to BodyPlus 200. The values 1141 and 1511 were
obtained by subtracting BPa and BPb’s non-retail selling price from its cost.

III. Problem
The main problem of this case is that Better Fitness, Inc. is not generating much
revenue, and therefore a new strategy should be recommended on how the company can
sell their products at the non-retail price to increase profits efficiently.

IV. Methodology
Microsoft Excel’s solver tool was used to determine the optimal amount of
products needed to maximize profit and production.
Table 1 - Given information

1
Table 2 - Non-Retail

Table 3 - Retail

2
V. Recommendation
The group recommends BFI to partner up with gyms and provide their
exercise equipment.

To arrive at the recommendation, the group has considered various factors.


One of them is the nature of gym operations since most gyms partner with one or a
few brands for their exercise equipment. As a result, it may be hard for BFI to sell
individual equipment and/or break into the competitive market. Another thing to be
considered is the alternative’s cost efficiency. Alternative 1 (to open their own shop)
is costly and does not guarantee the same volume of sales like a partnership does.
With the recommended partnership, BFI will be able to sell their other exercise
equipment, increasing revenue streams. They will not have to limit it to the
BodyPlus100 and BodyPlus200 machines. In doing so, profits can be maximized.

BFI can start this by first partnering with new gyms in order to break into the
market and build credibility and awareness. Thereafter, the company can try to build
relationships with other gyms that are bigger and more established. Likewise,
schools, condominiums, private gyms, sports clubs, etc. will also be possible
opportunities for partnerships.

In addition to this, BFI can offer better warranty deals and customization
options for customers (ex: color, specific types of equipment, and small
adjustments). These will provide BFI a competitive advantage in the exercise
manufacturing industry.

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