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Memo-paper #2 - Memo To From Date Re Rick Smith President...

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Memo To: Rick Smith, President & CEO, Molded Plastics, Inc. From: Alex Gase, Quality Assurance Manager, Molded Plastics, Inc. Date: 10/5/11 Re: Blue Flame Customer and quality of product, Blue Flame part # 1A395 A week ago our company was made aware of a threatening and potentially devastating event that could dismantle our down-wind supply chain and greatly diminish future sales. One of top 5 biggest customers, BlueFlame, has recently informed us that due to consistent reports of a defective part that is supplied by us in their product, “Violin Nerd”, we may potentially be dropped as a vendor. This is a substantial blow to our company and must be rectified if we intend to continue our operations in the current magnitude and success that we strive to achieve. BlueFlame, buys $5,000,000 worth of our parts that includes the defective part they have mentioned. BlueFlame is such a valued and pivotal customer that if we don’t reconcile this relationship not only will our revenue drop by $5 million, but our profitability margin will decrease by 7% (see attached ‘Sales and Profitability Report’).
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