Research Simulation Memo

MEMO

To: Aquine Stakeholders

From: Howard Gray, CEO

Date: 9/1/11

Re: Quality Control Recommendations

Message:

The principle for this memo is to inform the stakeholders on the sales and research conducted within the organization for the last quarter on the Mechanical Watches.

Upon reviewing the sales figures and the number of rejections from the SOCC it is necessary to make adjustments to increase the sales and reduce the number of watches being rejected by the SOCC. The number of rejections by the SOCC has reached a high rate of 67%. Although Aquine has the smallest market shares of only 5%, it also has the highest rate of rejections. The response to our overall advertisements has been positive and is reaching 71% of the population. However, 61% of consumers will not purchase these watches even though they are priced lower than our competitors. In addition consumers are willing to pay between $1,001 and $1,500 for these watches. Based on the tests the following shows the percentages of rejections within the last quarter.

Horizontal and Vertical Difference 53%

Maximum Variation in Rate 68%

Mean Variation Rate 61%

Based on careful review, evaluations, and statistical research we find it necessary to invest in additional machinery to reach a level of quality watches and reduce the number watches being rejected. All factors have been carefully analyzed in reaching the conclusion that it is necessary to invest funds in creating a better quality product, reduce the number of rejections and increase sales.

Upon reviewing the data based on the evaluation of the research we believe it is best to purchasing or upgrading the following machinery to improve the quality of the mechanical watches we are producing.

Purchasing Customized Movement Holders

Upgrading the Poising Machine

Upgrading the Timing Machine

It is suggested that these adjustments be made immediately to ensure we can provide superior mechanical watches and increase the sales...