The memo assignment describes the situation and request a recommendation to the problem at hand through an assignment document.

Shoes Shoes Clogging your Feet One Step at a Time foice of the President TO: Productions Manager Malaysia FRDM: Mark Eegich, COD SUBJECT: Limit production I've just arrived back from meetings with the president ofour company in Washington, DC. . you know the stock price ofour parent company has been suffering and the president is under pressure to boost profits. To this end, the company has decided to set internal rate of return targets on all US divisions and on all foreign subsidiaries. [ contacted our sales and logistics divisions on the plane trip back and the latest infom'lation l have is as follows: I. The negotiated wholesale distribution price is fixed at 5154 per pair. 2. Based on conversations l have had with our production engineers, they insist that the stand: factory design costs are quadratic. (specically, it follows the form total cost = a + sz functional form} 3. The accounting department has analyzed your production costs from an internal audit ofth: last 3 years and estimated that the cost function is C(Q} = l 15.1'2 + 0.0t'i3Q2 l have determined that based on this data, production has been exceeding your monthly quota 30,000 pairs in most months. Your average cost is also higher than the target 55 per pair established by headquarters. You need to limit your production, as it is too costly. 1 want you to implement these production changes in the Malaysia factory immediately, or gi' justication of why you should maintain higher production runs. Parent Company Demands Resultsll Regards, Mark cc: Lisa Murkowski, Chairman