Mr. Toshinari Oka, president Shiga Factory of Daikin Industries Residential Air Conditioning, was confronted by the prospect of unseasonably cold summer.

The Shiga Factory had large quantities of its products inventory in anticipation of strong summer sales.

Mr. Oka was concern not only about losses in the current year but also about the factory’s long-term survival

Options described in the case include (1)product consolidation (reducing the number of models), (2)build a lower cost factory outside Japan, or (3)exit the business.

Mr. Oka wondered whether there were other options.

1. What is your assessment of the problems confronting the Shiga Factory of Daikin Industries?

2. What are the strengths and weaknesses of Shiga Factory relative to the competitors?

3. As Mr. Oka, what short-term and long-term actions would you recommend to your board of directors? How would you justified them?

4. Which step in the supply chain, if any, would you like to tighten up or eliminate? If so, how would you proceed?

5. Would a move to a low-cost country such as China be in your plan?

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Monthly POs1-31 days

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