November 15, 2022 Magna CFO, 1234 Accounting Lab Ft Collins, CO 80512 Dear Magna CFO, Magna's strategy to compete for customers is producing a high volume of low-cost PCs and working with a strong quality assurance line to reduce the possibility of faulty units. Our main customers are large electronic retailers who then sell the PCs in their stores. Two years ago, we merged with one of our main competitors to become one of the largest private-label PC manufacturers. Attached is an Excel sheet that sorts and codes the assorted profitability and efficiency ratios that we used to create our analysis. Through this analysis, we have identified two problems that contributed to a 5.17% lower ROI than our next largest competitor, Data Max. 1. Many of the finished PCs had to be reworked prior to being sold 2. Employee turnover was 5.10% higher than budgeted In order to do a more thorough analysis into these problems and work to provide a solution, we would need access to the following departments in order to gather the missing information. 1. Supply Chain/Logistics: a. Why are so many supplier parts needing to be rejected? i. Answers will come from the screening teams b. Are our suppliers manufacturing parts to our specifications and standards as outlined in our contract? i. Answer will come from screening and legal teams c. Are there alternative suppliers that we can turn to that could be more reliable i. Answer will come from the purchasing team d. Are the computers being assembled to correct specifications before leaving our plant? i. Answer will come from the Line skills and quality assessment 2. Human Resources: a. Do exit interviews point to/tell of a consistent problem in the job environment? i. Answers will come from surveys to determine where employees feel the company needs to improve ii. Answers will come from hiring managers as they conduct exit interviews b. How much are we paying each employee compared to our competitors? i. Answer will come from industry trade salary average c. How can we incentivize employees to stay with the company? i. Answers will come from employee surveys to understand what will motivate them to stay d. How can we make the training process more efficient? i. Answers will come from Human Resources Team e. How do we incentivize employees to complete surveys, so we know areas that we need to fix to increase retention? i. Through bonuses for each batch of surveys completed by employees. Once this information is gathered, Team 36 will be able to provide a detailed solution for Magna to implement and improve their Return on Investments. Sincerely, Team 36 Managerial Accounting Analyst
