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deal of power supply. This is not exactly a short process, so you can just imagine the
amount of money we are spending on this particular stage of manufacturing.

1. You are addressing the production team. Explain why manufacturing costs
have to be cut down by presenting the reasons below.
a. rise in the prices of supplies
b. possible rise of item prices if manufacturing costs don’t go down

Sample answer:
The lowering of manufacturing costs is imperative in our situation now. Recently, the prices of
our main resources have gone up. We hoped that the rise in prices will only be temporary. It
was a good thing that we had a good supply of resources in our warehouses. We used these
stocks, so we didn’t have to purchase more expensive resources. However, our stocks have
been used up and we have started buying supplies. The high prices still remain and it seems
that they will not go down but rise instead. We need to think of ways to lower manufactur-
ing costs, or else we will be forced to increase our product price. This will not be good for our
product because our competitors seem to be so stable at the current price that they have. Any
increase in our product price will then make us the most expensive brand in the market. This is
not favorable to us, and the finance team has already predicted that this may negatively affect
our profits if we don’t cut down manufacturing costs. Please give some strategies on how we
can lower our manufacturing costs.

2. You are briefing the managers in charge of production and manufacturing.
Cite the points below as reasons why you want them to stick to a certain
manufacturing budget.
a. Low manufacturing costs lead to low item price
b. Buyers are attracted to low prices.
c. More buyers lead to bigger profits

Sample answer:
Based on the production report that we have discussed the other week, we all agreed to come
up with strategies on how to minimize manufacturing costs. I came up with a proposal for
the management’s approval. We need to focus on manufacturing products that would cater
to the needs of more consumers. Our distributors informed us that sales go up when there
are more affordable brands in the market. We should create several models of inexpensive
items that could compete with other brands. Other companies would just be having a single
model for the same price while we can offer consumers several choices. That could lead to
better patronage of our products. While manufacturing more of these affordable products, we
should still sustain the production of sophisticated and expensive models. To accomplish this
plan, we need to outsource less expensive source of raw materials for next year’s production. A
new supplier would be dealing with us, once our partnership with Texas Instruments ends this
November. Second, our plant would move to a new location, where we could manufacture in
a bigger building and wider lot area. I have spoken with several property owners who are of-
fering to lease their property at a lower rental. We can discuss later, which property to choose.
Lastly, we should also consider more contractual workers and lesser number of regular em-
ployees in our workforce. The HR Manager could think of a suggestion on how we could deal
with this. These are the main points for our agenda today.

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