The idea struck Mark Salmon, vice president of academic affairs for Otis College of Art and Design, one day in late 1994.

The prestigious arts school was contemplating a move from its cramped facilities on Wilshire Boulevard near MacArthur Park. One possible site for a new campus, Salmon discovered, was just two miles from Mattel, the nation's largest toy manufacturer.

"I just connected the dots," Salmon said. And the West Coast's first degree program in toy design was on its way to becoming a reality.

This fall the school, whose graduates form a veritable who's who of the fashion and fine arts worlds, will select 25 to 30 students for its first class of toy makers-in-training.

Students will spend their first year in general art and liberal arts courses--what Otis calls foundation classes. The next three years will concentrate on the various aspects of toy design, from model making to child psychology.

The program eventually will enroll no more than 100 students, Otis President Neil Hoffman said.

"Our ultimate goal is to keep it small and selective," he said.

The program will be launched on Otis' new campus in Westchester, which will open in time for the 1996-97 academic year.

The proximity of the campus to Mattel was not the only reason that a toy design major was so compelling, Otis officials say.

The toy industry produced U.S. sales of $18 billion in 1994. Los Angeles County, which is home to 500 toy companies employing 6,000 workers, can take credit for almost one-quarter of that sales total, or $4.3 billion.

Demographics suggest a rosy outlook for the toy market for years to come. According to Hoffman, the number of youngsters age 14 and under is projected to increase through 2005 before it begins to level off.

"That kind of demographic increase has implications for an expanding market and expanding job opportunities," he said.

A number of schools have offered courses in toy making, usually as part of an industrial- or product-design program. But toy design experts say that toy inventors need specialized training to meet the industry's needs.

The first--and until Otis, the only--school in the country to offer a degree in toy development was Manhattan's Fashion Institute of Technology, part of the State University of New York.

The New York program, founded in 1989, is small but highly competitive, producing 15 to 20 graduates a year.