Final - each wholesale If we were to replace all 25000 DVD...

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Memorandum To: Ralph Martinez CC: From: David Lynch Date: 07:09:23 Re: Medusa SLX DVD Burner Flawed. It has been brought to my attention that after an investigation done by Consumer Magazine, the Medusa SLX computer has a flawed DVD burner that typically fails during the second year of operation. We have currently sold approximately 25,000 SLXs and about 8,000 of these face failure within the next six months. I have contacted Medusa INC about this issue and what options were available to correct the problems. I was told that a new line of Medusas have been designed and the DVD burner flaw was fixed. Medusa is operating on a tight profit margin and can only afford to replace the malfunctioning in-warranty DVD burners. New DVD burners can be obtained for $20.00
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Unformatted text preview: each, wholesale. If we were to replace all 25000 DVD burners it will cost approximately $565,000 over the next six months. Labor and parts for each unit would cost roughly $22.60 per unit. I propose that we notify each customer about the issue concerning their computer and offer them a deal of $35.00 to replace the DVD burner if unit is malfunctioning out of warranty. Those that are malfunctioning and are still under warranty will be replaced by Medusa INC under their warranty. Each unit that we service will profit $12.40. If we service all 25000 units then the profit would be $310,000. I feel that this would be in the best interest of the company by maintaining good customer relation and still maintaining a profit. 1 CONF I DE N T IAL...
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