Identifying and managing unused capacity Strategy, balanced scorecard, merchandising operation. Roberto & Sons buys T shirts in bulk, applies its own trendsetting silk screen designs, and then sells the T shirts to a number of retailers. Roberto wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Roberto T shirt. Roberto presents the following data for its first two years of operations, 2010 and 2011.
1. Is Roberto ‘s strategy one of product differentiation or cost leadership? Explain briefly.
2. Describe briefly the key measures Roberto should include in its balanced scorecard and the reasons it should do so.
1. Calculate the amount and cost of unused administrative capacity at the beginning of 2011, based on the actual number of customers Roberto served in 2011.
2. Suppose Roberto can only add or reduce administrative capacity in increments of 250 customers. What is the maximum amount of costs that Roberto can save in 2011 by downsizing administrative capacity?
3. What factors, other than cost, should Roberto consider before it downsizes administrative capacity?