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In expectation of cooperation with you.
John Dow, the adviser.
THE OFFER ON TRIPLE INCREASE IN MANUFACTURE FOR THE AMERICAN CORPORATION ON MANUFACTURE OF ORNAMENTS
The increase in manufacture of ornaments with 30.000 to 90.000 in a week should occur according to following conditions.
1. Cost of manufacture of 90.000 ornaments should be much less than triple expenses for manufacture of 30.000 ornaments.
2. Never it is necessary to suppose, that the manufacture increase exceeded a market demand and created thus excessive stocks; system KB installation (just in time) is for this purpose necessary.
3. The increase in the areas necessary for storage and manufacture, should be less than three times.
I suggest to break speeding up of these problems into three stages.
STAGE I – careful studying of methods of manufacture applied now in America, allowing to develop 30.000 ornaments in a week, on purpose:
1) Definitions of the equipment, now in use, for manufacture expansion;
2) Findings-out, whether it is possible to increase automation;
3) Checks, whether additional training, and if yes, which is required to workers of a current stream;
4) Revealings of the necessary industrial and warehouse additional areas;
5) Definitions of quantity of an additional labour (depending on efficiency and possibilities of the new automated equipment);
6) Studying of reports on sales for 1994, 1995 and 1996 for definition of seasonal peaks and falling, and also increases in percentage terms, observed during this period.
Such research should occupy approximately 4–6 weeks. The full report will be given you in the end of the specified period. My fee for it will make $15.000.
After discussion of results of the report you solve, whether wish to pass to a stage II.
STAGE II – recommendations and the project for expansion. Its big part will pass outside of your territory as it will be necessary:
?) To find the best, reliable and not so expensive equipment meeting requirements of expansion;
?) To design functions of the new equipment for the purpose of definition of requirements and scales of an additional labour;
?) Precisely to define, how much it is required the additional areas for the recommended equipment;
?) To make the schedule of the new expanded manufacture, having broken it into phases;
?) To design expenses on the expanded manufacture.
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