Memo

To: Management Committee

From: Student, Vice President Controller

Date: June 6, 2012

Subject: Maintain Current Business Process vs. Modify Internal Business Process

Dear Professor,

As per your request, attached is the report that we have prepared, outlining the course of action Clearwater Small Appliances management team should adopt in designing and planning for the operation, given the opportunities and constraints faced at present. This report gives a complete analysis of the situation and different alternatives available, followed by a final recommendation using our criteria.

Please let us know should you have any questions or require further clarifications on this report.

Yours truly,

Student, Vice President Controller of Clearwater Small Appliances

Introduction and Problem Statement

Clearwater is a small appliance manufacturer that has been in existence for approximately 50 years. The company produces a large spectrum of small household appliances such as coffee makers, toaster ovens, microwaves and irons. Recent changes to the retailing industry by “power retailers” have required Clearwater to alter its way of doing business. The board of directors have developed a new strategy to become a profitable supplier to “power retailers” but do not have the means to monitor and evaluate the success or failure of the strategy.

Issues

1. Clearwater is suffering from declining sales. Category retailers have become powerful and are able to dictate practically all terms to suppliers. Large chain retail manufacturers are constantly squeezing costs forcing manufacturers to keep selling prices low in order to remain competitive. 2. Clearwater maintains a Cost of Quality report, but results of the report are not tracked or analyzed. 3. Clearwater does not currently have the required internal business