Julie Hilger Started New Treads to Combine Fashion and Sustainability

question 70

Essay

Julie Hilger started New Treads to combine fashion and sustainability. The original production of sandals made from recycled plastic has expanded to a complete line of casual footwear. Current sales total over $2 million. Julie hired the firm's first controller early this year, and has asked him to detail suggestions for ways to increase profits. Adrian Warring, the new controller, has compiled a list of recommended changes that focus on quality improvements. New Treads customers expect high quality at a low price, a "value" product. So the company must simultaneously watch costs and quality. After receiving his list of suggestions, Julie calls Adrian to her office and says, "I don't see how improving quality can increase productivity. In fact, it seems to me that efforts to improve quality will slow down production and decrease productivity."
Required:
Using specific examples, help Adrian explain to Julie why efforts to improve quality can also boost productivity. How does productivity play a role in the firm's strategy and competitive environment?

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Definitions:

Marginal Tax Rate

The rate at which your last dollar of income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Income Security

Government programs designed to protect individuals from economic hardships and ensure a minimum level of income.

Administrative Burden

The workload and costs associated with bureaucratic procedures and regulations, often mentioned in the context of criticisms of government or organizational inefficiency.

U.S. Income Tax

The federal tax levied by the Internal Revenue Service on the annual earnings of individuals, corporations, trusts, and other legal entities.