MEMORANDUM

Date:

October 16, 2015

To:

John Kubler, President

From:

Eduardo Mercado, Manager

Subject:

Solutions to Improve Global Fabric Solutions, LLC

Our company has grown to have one of the best customer service reputations of all companies in
the business and our ability to deliver has given us the lead in special events casual wear.
However, due to recent events, our reputation has suffered. Our customers complained that we
were unable to fulfill orders on time, and as a result, Global Fabric Solutions had a loss. Our
previous suppliers, being unable to fulfill our orders, played a major factor to our loss, as did a
few mishaps during production.
To ensure these problems no longer happen, I suggest we make the following changes. The new
supplier I found, Textile Images, Inc. has a reputation that is on par with Global Fabric Solutions,
making a good fit for our business partners.
Productions and Shipping Department Solutions:
Textile Images, Inc. as new supplier
Hire additional production employees
New delivery company
Our Current Operating Cost
Buying 1000 t-shirts from current supplier - $4/t-shirt = $4,000
Cost of delivery from current deliverer- $200
Cost in wages- 10 employees at $10/hour-40 hours/week =
$4,000. +$1,000 overtime = $5,000 in wages/week
Total operating cost = $9,200
Suggested Operating Solutions
Buying $1000 t-shirts from Textile Images, Inc. - $2.50/t-shirt =
$2,500
Cost of new delivery company - $125
Hiring 2 additional workers- 12 employees at $10/hour 40
hours/week
= $4,800
Total operating cost = $7,425
Although hiring two additional workers raises the initial cost of wages from $4000 to $4800, due
to our average overtime cost, it would actually decrease the cost of wages. By hiring two
additional workers, these workers will be able to make up that additional overtime cost because

they will be able to work more efficiently than workers who have already worked a full eighthour day. Also by cutting expenses by switching to Textile Images, Inc. is the most successful
way to reduce cost for out company. Simply put, our former delivery company was expensive
thankfully I found a delivery company who is able to deliver for us at a much lower rate.
These suggestions will indefinitely reduce the cost of our business. But more importantly it will
improve our companys reputation. Our recent failures will soon be a thing of the past, as we
take the initiative to improve Global Fabric Solutions, LLC to a whole new level.
Please call me at EXT.113 with your opinion on these solutions and any questions you may have.
I hope to create a meeting this week to discuss these solutions so please let me know when you
are available to meet. Once again, I hope to see you this week so we can discuss the appropriate
way of tackling these problems.