"Cry Baby" Complaints

EXECUTIVE SUMMARY

The Company had received a number of complaints about the product of “Cry Baby” doll after Christmas. The complaints were about the malfunction of the product that leakage of water and unable to cry when pressed the certain button, and the doll’s eyes were easily removed that harmful to children potentially. For that reason, an investigation into the incident was conducted.

After interviewed with staff, the 120 complainants and looked into the data, reports and guidelines, we found that:

1. The cause of the incident was the unqualified plastic materials used in production from a new supplier.

2. The quality control guidance and safety regulations were obsolete that no more suitable for the company.

3. A significant percentage of customers lost confidence on our products and considered not to buy our products anymore.

Thus, both the external and internal solutions are suggested to the company to react. In the external aspect, we recommend:

1. To recall products from distributors and customers actively.

2. To refund $300 and give $100 toy coupon to the affected customers as compensation.

3. To sponsor parent-child relationship activity to rebuild company reputation and regain customers’ confidence on our products.

In the internal aspect, we recommend:

1. To terminate the contract with the supplier and sign a new contract with supplier whose materials are already passed the international safety test.

2. To set up an independent laboratory with the implementation of new safety guideline and regular reporting, testing and reviewing are conducted.

TABLE OF CONTENTS

1) Executive Summary....................................................................P. 2

2) Introduction...........................

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...guideline and posted for all employees. A weekly meeting should be hold by the department to check every part of process.

“Prevention is better than cure” a Chinese idiom said. Prevention of fault occurrence is more important than the recovery acts, which saves cost on money, time and administrative procedures. Hence, the Company must adopt internal reforms to stop up all loopholes.

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If you have any questions, please contact the undersigned on ext. 101.

We would appreciate the opportunity to discuss the findings in more details with you and even give a presentation about it.

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LEE Hoi Tong CHENG Oi Ngor

Customer Service Officer Customer Service Officer

Date: 15th January, 2010