February 14, 2006
To: Our Valued Customers
From: John Arizumi – President, Carrier Hawaii
Subject: Carrier Hawaii’s Equipment & Parts Order Policy
This memo is to delineate our order policy for equipment and accessories that you order from our inventory here in Hawaii.
Beginning of 2006 we reviewed our strategic plan and business operations. Two things stood out: Poor cash-flow management and poor warehouse operations. We realized that we have been lax in enforcing our “will call” and ordering processes such that our main warehouse was being cluttered with customer orders as well as customers reserving equipment beyond a reasonable time period impacting our inventory cost. We felt the need to reiterate our policy with our customers.
All customer orders placed for equipment purchase from our inventory shall be picked up within 30 days of your purchase order date. Orders (or the portion thereof) that are cancelled beyond 14 calendar days will be subject to a 15% cancellation charge. Should there be job delays such that you choose not to pick up the order, you will be required to pay for the order in full and will also be charged a demurrage equivalent to 3% of the order amount (or portion thereof) per month. To avoid problems, we would appreciate it very much if you would please pick up your orders as soon as possible. Orders placed but pending submittal approval by the engineer shall be an exception such that the 30-day window starts from date from engineer’s approval.
Customers who inquire about equipment availability for projects can reserve equipment in our inventory for up to 5 working days maximum. After 5 working days, the equipment will be made available for general sale. Should you choose to hold the equipment beyond the 5 days, you must purchase the equipment and our standard terms shall apply.
We will be enforcing these guidelines to streamline our operations and reduce our inventory cost. There are many of you who have been very responsible customers and we thank you for your diligence. And there are those of you who took advantage of our lack of attention.
For any hardship cases, any waivers or exceptions to the aforementioned, has to be directly approved by myself or Michele Kaneshiro, CFO. No other employee will have authority.
Your cooperation in these matters will be greatly appreciated. Thank you.