Clear Hear Business Proposal

Clear Hear Business Proposal

As Business Economic Director at Clear Hear, we would like to address a few issues that exist between our companies’ need to operate at optimal capacity in our in store production lines and with the current issue with one of our customer Big Box. We hope to offer suggestions with explanations and supporting information for each strategy to help decide the best route for Clear Hear to take.

Clear Hear currently has two different production lines, the Alpha line and the Beta line, with both of those lines we strive to stay a manufacturer with the highest regard to standards for ourselves, our business partners, and consumers by offering the best quality products. With this said we have exciting news that comes along with decisions to be made. Kendra Sherman, Business Development Specialist here at Clear Hear has been anxiously waiting to speak with Lisa Norman, Production Manager to discuss a recent order of 100,000 cell phones. She indicated that she secured this order, and this would support the ongoing order that our biggest customer, Big Box, has with one of their customers which is a major telephone service provider. This is where we run into a few issues; Big Box has demanded a delivery date of 90 days. The reason for the excitement on Lisa’s part is this order will use the excess capacity of around 70,000 units that her team will have over the next three months. Lisa’s main priority in her position is to ensure the factory is running at full capacity and full profitability, so of course she is concerned that Big Box stated they will not pay more than $15 per unit.

This is where the issues arise; we currently offer two lines as stated above, the alpha and beta models. The Alpha’s price per unit cost is $20, and the Beta’s price per unit cost is $30. We will be losing profit by taking this route to produce the units needed.

There is another option, Original Equipment Manufacturer (OEM), which has extensive experience...