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Cost Centers

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Submitted By ebkraeuter
Words 424
Pages 2
6 Cost Centers
(Boot Division) A. Problem Statement
We have been experiencing an issue with our boot division and it has caused the Company to allocate additional resources to this Division. The additional resources are costing the Company an excessive amount of money. The purpose of this meeting is to determine what is causing the need for these resources and will serve as an aid to resolving this need, thus saving the Company’s finances. We feel that with the right solutions in place, we can resolve the problems the boot division is experiencing immediately. B. Cost Centers

Customer Complaints in the Boot Division Costs the Company money Creates a Negative Reputation 6 Cost Centers Resulting from the Complaints

1. Supplier Materials
-The recent change of suppliers to a vendor that uses cheaper materials is actually the cause of the complaints. The cheaper materials are causing the boots to fall apart when they come in contact with rain. This affects the manufacturing department negatively. 2. Labor to Field Complaints. -The extra complaints are coming from our Sales Center. Our sales agents are fielding these complaints causing a majority of their time to be focused away from sales. This effects the Sales Center department negatively. 3. Customer Refunds -The sales center has been issuing excessive refunds to solve customer complaints, thus costing the Company money. This effects the Accounting Department as it’s causing more labor funds needed for the extra refund transactions. 4. Employee Turnover -The additional complaints are causing the employee satisfaction and moral to drop, resulting in frequent employee turnover. The Company is having to allocate additional funds to recruit more talent. This effects the Human Resources department as they are constantly working

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