MANUFACTURING AND OPERATIONS PLAN

Operating Cycle

Although we do not have enough experience in the industry to predict exact

seasonal highs and lows in consumer demand, we are assuming that the demands
will go up during the summer season because of increase in tourism during the
summer months and will go low towards the end of the financial year as companies
(target market) refrain from conferences, international travel and startup of new
businesses towards the closing of the financial year. It can be argued that the
increase in demand in the summer will be compensated by closing of schools and
universities during this period, but schools and universities usually purchase such
products at the start of new academic years and will only add up to the demand
during the summer season.

The knowledge of highs and lows of consumer demand will be used to compensate
for production and distribution accordingly. With advance knowledge of demand,
production and shipping can be optimized for cost efficiency.

Geographical Location

Edmonton, Alberta will be the business location for TransVoText Inc. Being based in
Edmonton allows us to maintain a low overhead and make full use of our contacts of
friends and family, as all six of the group members are from Edmonton.

Although software development and prototype development will take place at our
office in Edmonton, once a design has been developed manufacturing/production
will be outsourced to one of the third world countries such as India or China to save
on production costs.

Facilities and Improvements

At the start of the business, all operations will take place at our office in Edmonton,
Alberta. This office will be a rented space and will have minimum furniture and
essentially only one computer per management team member. An impressive office
is not required at this point of time, as marketing of the product would be carried
out by visiting clients instead of inviting them to our facilities.
Once the prototype design is developed and the company moves on to the
production phase, manufacturing of the device would be subcontracted to a
company, which already has the required facilities.

As the company grows over the years and increase in staff takes place, we will have
to lease a bigger office space to run our management operations.

Strategy and Plans

The strategy for manufacturing is to subcontract to production companies in

developing countries such as china or India, in order to save on production costs
due to the availability of cheap labor. The company to contract to would be decided
during the design phase by pulling out a tender and the cheapest offer maintaining
our quality standards will be accepted. Mass production costs due to production in a
developing nation will bring down the expected cost of the device to our company
further down from the planned $50/unit.

The testing of software, which shall be conducted in the design phase, will be
subcontracted to software testing companies such as Infosys, TCS, Harbinger, etc. in
the developing nations.

Such a product always has to achieve the minimum standards of the particular
country it is being sold in. In order to avoid achieving separate standards for
separate countries, we fill file for international ISI standards and maintain these
standards during the manufacturing phase of our product. Quality control is very
important and this will avoid any returns or faulty devices to be produced. Periodic
unannounced inspection of production line will also be conducted.

Regulatory and Legal Issues

No Legal or Regulatory issues have been identified as of now. We should be able to

avoid these issues by following international ISI standards, which are usually higher
standards than any country’s requirement. Health permits may be needed and shall
be attained wherever needed. A legal advisor shall be hired to provide guidance for
any regulatory and legal issues that may be overlooked by the company.