| Case Study | Mattel’s Toy Recall And Supply Chain Management | | | 5/11/2014 |

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1) Why do firms contract overseas for production of products they sell?
Answer: The firms contract overseas for production of the products they sell to gain certain advantages from the different countries. * One of the biggest advantages is cheap labor that cut down the cost of the products. * To get the advantage of the cheap fuel prices and raw materials to make the products at effective cost. * The companies can get the tax benefits and other government policy advantages by producing their products at overseas. * The companies can also get the lower cost suppliers from different countries. * The company can get the advantage of currency fluctuation to produce the products at lower currency rate.

2) What were the primary causes of Mattel’s recall problems?
Answer: There were several causes for Mattel’s toy recall. But the primary causes are problems in manufacturing, design and usage. * Manufacturing Problems: One primary problem is the use of excessive lead paint in toys. Lead was commonly used in paint. However, it is a neurotoxin and is harmful to developing brains in children. Repeated exposure can cause serious brain damage. * Design problems: A second cause for recall was defect in product design. That was the result of increasing use of small powerful magnets in children’s toys. If the designs of these toys were deficient and did not adequately encase the magnets, they could become dislodged and swallowed by the children. When a child ingested more than one magnet, the ingested magnet could be bind together across intestinal folds, eventually perforating the intestine and causing serious injury or death. * Product misuse: Some recalls were due to the potential for misuse. Some features of the toys