Memo on ‘hot spot’ case
Analysis of the feasibility of installing cooling system
Dear president Dunne,
I have worked as production manager in this company for several years that familiar with the ways of how motivate employees to improve productivity and earn profit more. But, the dropping production resulting from the bad working condition hurts my feeling every now and then. As we know, the tube supporting by our department is important accessory of oscilloscope which contributing most to the profit.
Whereas, the production is declining owe to low morale standard hitting by the extremely high temperature. Since the temperature exceed 110 degrees in summer, the workers who suffer from the intense heat are complaining about the working condition that their capabilities fall from 50 tubes to 45 per day. The loss stems from low production in a summer is $3,000 each person. Even worse, while moaning the temperature, 7 workers leave and one worker should be replaced among the remainder per month. New hires produce 25 tubes each day for 5 days that result in loss of $26,250 every year while the loss of replacement reaches $7,500 high.
Three years ago, I had suggested to build up air conditioner and insulation device when the budget was $300,000 which much lower than current dollar of $450,000. Admittedly, I understand it was hard for Plant Manager Jerry Lopez to request dollar since financial shape was weak three years before. Fortunately, we have had new buyer who is rich and ambitious to grow up through investing money for profitable items with bright superiors. So, it is reasonable to install cooling system which cost $30,000 per year after setting, while the profit we would save from the heat exceeds the amount of the expenditure within 5 years. Now is late August that, obviously, we must start collecting bids and booking contractors within the next month for the setting of the system of next year.
As the managers concerned, including Jerry, we...