February 7, 2011
Business Proposal for Clear Hear Inc.
As Vice President at Clear Hear, I would like to address some issues that have come to light with our manufacturing of cell phones here at Clear Hear. I have taken economic conditions into consideration and will offer my recommendation that will increase revenues for our company while hopefully adding a new client to our distribution list.
Clear Hear is a manufacturer …show more content…
In order for Clear Hear to complete this order, Lisa and department heads will have to address profitability issues and will have to decide how to proceed to fill this order that will benefit our company needs, while still achieving profits for our company. If we agree to accept the contract from the 100,000 Alpha model units Clear Hear would be manufacturing each phone at a loss of $6 per units which I feel would be a bad business decision. A key contributor to our decision lies among our Clear Hear statement of values which consist of: (1) Keep our employees working; (2) Provide our customers with products on time and that reliably meet or exceed their expectation; (3) Treat our business partners the same as we want to be treated (UOP, …show more content…
If Clear Hear agreed to accept the phone contract and decides to produce the phones in house, I believe the company would have to make some adjustment to variable cost input if the company wants to make a profit on the phone contract. Clear Hear would have to devise a strategy to produce the phones below the $15 range to earn a profit. Clear Hear could improve production rate and shorten the phone production time. Clear Hear could implement the change by instituting overtime or hire a second shift of part-time workers for the duration of the contract. Cutting the duration time for producing the phones would also cut the all fixed cost associated with the production of the phone. Clear Hear cutting the fixed cost could allow the company to meet the desire contract price.
Clear Hear could also produce the phones using a less costly material while providing the same level of functions the Alpha model phones provides. Nevertheless, Clear Hear changing the standard Alpha phone could put the company reputation at risk. Thus causes our name to be ruined from the manufacturing and supplying of an inferior product leading to reviews that are not reputable to our company by consumer advocates. Big Box may not agree to accept the new phone as part of the contract leading to a voided contract thus losing revenue for Clear