ABSTRACT
Olympus, which consist of Olympus Optical Company, Ltd. its subsidiaries and affiliates manufactured and sold opto-electronic equipment and other related products. The firm's major product lines included cameras, video camcorders, microscopes, endoscopes, and clinical analyzers. Olympus also produced microcassette tape recorders, laser-optical pickup systems, and industrial lenses. Olympus had six divisions and a headquarters facility. Four divisions — consumer products, scientific equipment, endoscopes, and diagnostics — were responsible for generating revenues. The other two divisions were responsible for corporate research and production engineering. New products were introduced via the firm's extensive product planning process. During the design phase, the anticipated cost ratio of new products was monitored on a frequent basis, typically two to three times before launch. The product's target cost ratio was calculated by dividing the target cost by the Free of Board (FOB) price. Target costs were established by subtracting the product's target margin from its FOB price.
