8/8/2019 BSG Decisions & Reports

J Company D S Year 11
(Industry 27) (practice)

North America Europe-Africa Asia-Pacific Latin America

Workforce Compensation & Training Facility Facility Facility Facility
Compensation and Base Wage (% change from prior year) +2 % 0% +2 % 0%
Training of Incentive Pay ($ per non-rejected pair) $1.00 $0.00 $0.50 $0.00
Production Fringe Benefits ($ per year) $3,007 $0 $1,536 $0
Workers
Besy Practices Training ($ per worker) $600 $0 $400 $0
Supervisory Staff (ratio of production workers to supervisors) 40 to 1 0 to 1 40 to 1 0 to 1
Supervisory Compensation (% change in salary + benefits) 0% 0% 0% 0%

North America Europe-Africa Asia-Pacific Latin America

Branded Footwear Production Facility Facility Facility Facility
Branded Superior Materials Percentage 32 % 0% 54 % 0%
Production Number of Models / Styles (50 to 500 models) 200 models 0 models 200 models 0 models
Specs
Enhanced Styling / Features ($000s per model) $10 $0 $10 $0
TQM / 6-Sigma Program ($ per pair produced) $1.00 $0.00 $0.90 $0.00
Projected P/Q Rating (of pairs produced) 4.0 ★ 0.0 ★ 4.1 ★ 0.0 ★
Projected Reject Rate (of pairs produced) 7.1 % 0.0 % 10.0 % 0.0 %
Branded Pairs to be Manufactured in Year 11 (000s before rejects) 4,033 0 4,249 0
Anticipated Year 11 Materials Prices Standard Materials ($ per pair) $6.00 Superior Materials ($ per pair) $12.00

North America Europe-Africa Asia-Pacific Latin America

Production Facilities Facility Facility Facility Facility
Equipment Purchase of New (000s of pairs) 500 0 250 0
for Footwear Equipment Refurbished (000s of pairs) 250 0 250 0
Production
Sale of Equipment (000s of pairs, oldest sold first) 250 0 500 0
Production Option A (special equipment to reduce reject rate by 50%) Yes No Yes No
Improvement Option B (layout revisions to reduce setup cost by 50%) No No No No
Options Option C (special equipment to increase S/Q rating by 1★) No No No No
Option D (robotics to increase worker productivity by 50%) No No No No
Construction of New / Additional Facility Space (available in Y12) 0 0 0 0

North America Europe-Africa Asia-Pacific Latin America

Branded Distribution Facility Facility Facility Facility
Pairs to be Shipped from to North America Warehouse 2,496 0 0 0
Facility (000s of pairs) to Europe-Africa Warehouse 1,255 0 700 0
to Asia-Pacific Warehouse 0 0 1,660 0
to Latin America Warehouse 0 0 1,460 0

North America Europe-Africa Asia-Pacific Latin America

Warehouse Operations Warehouse Warehouse Warehouse Warehouse
Inventory Percentage of Pairs Cleared (prior to Y11 operations) 0% 0% 0% 0%
Clearance Number of Pairs Cleared (000s of pairs) 0 0 0 0

North America Europe-Africa Asia-Pacific Latin America

Internet Marketing Market Market Market Market
Internet Marketing Retail Price ($ per pair sold online) $68.50 $72.00 $67.00 $72.00
Decisions Search Engine Advertising (000s) $4,750 $4,500 $4,000 $4,000
Free Shipping (from warehouse to buyer) No No No No
Competitive Retail Price ($ per pair) $68.00 $71.00 $66.00 $73.00
Assumptions Search Engine Advertising (000s) $4,750 $4,250 $3,750 $3,250
Free Shipping None None None None

North America Europe-Africa Asia-Pacific Latin America

Wholesale Marketing Market Market Market Market
Wholesale Marketing Wholesale Price to Retailers ($ per pair) $49.00 $53.00 $48.00 $53.00
Decisions Brand Advertising (000s) $10,000 $8,500 $8,000 $7,500
Main-In Rebate ($0.00 to $15.00 per pair) $5.00 $5.00 $5.00 $4.00
Delivery Time (1 to 4 week delivery) 3 weeks 3 weeks 3 weeks 4 weeks
Retailer Support ($0 to $10,000 per outlet) $2,500 $2,500 $2,500 $2,250
Competitive S/Q Rating 4.0 ★ 4.0 ★ 4.0 ★ 4.0 ★
Assumptions Model Availability 200 models 200 models 200 models 200 models
Wholesale Price ($ per pair) $48.00 $53.00 $48.00 $53.00
Brand Advertising (000s) $10,000 $9,000 $8,000 $7,500
Rebate Offer ($ per pair) $5.00 $5.00 $5.00 $5.00
Delivery Time (weeks) 3 weeks 3 weeks 3 weeks 3 weeks
Retailer Support ($ per outlet) $4,000 $4,000 $2,750 $2,750

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8/8/2019 BSG Decisions & Reports
J Company D S Year 11
(Industry 27) (concluded) (practice)

North America Europe-Africa Asia-Pacific Latin America

Private-Label Production (proposed) Facility Facility Facility Facility
Private-Label Superior Materials Percentage 16 % 0% 26 % 0%
Specs Number of Models / Styles (global requirement) 100 models 0 models 100 models 0 models
Enhanced Styling / Features ($000s per model) $6 $0 $12 $0
S/Q Rating of Pairs to be Produced 3.0 ★ 0.0 ★ 3.1 ★ 0.0 ★
Private-Label Pairs to be to North America Warehouse 215 0 25 0
Produced and Shipped to Europe-Africa Warehouse 215 0 50 0
(000s of pairs)
to Asia-Pacific Warehouse 100 0 222 0
to Latin America Warehouse 100 0 222 0

North America Europe-Africa Asia-Pacific Latin America

Private-Label Contract Offers Market Market Market Market
Pairs Offered for Sale (to be produced and shipped if offer is accepted) 223 245 293 293
Price Offer (must be at least $10.00 below the Y11 regional average wholesale price) $33.00 $37.00 $33.00 $36.00
Incorporate Projected Outcomes into Year 11 Projections Yes Yes Yes Yes

Celebrity Endorsement Contracts CSRC Initiatives

Terminate Contract Use of Recycled Boxing/Packaging No
Contract Offer Offer Energy Efficiency Initiatives $400
Celebrity Early ($000s/yr.) Priority
Charitable Contributions $0 or 0% of pretax profit
Judy Judge 0 $1,200 3 Ethics Training / Enforcement No
Kimmie Jimmel 0 $600 2
Bud Birkenstock 0 $800 1 Improved Working Cafeteria / Child Care Yes
Jose Montana 0 $1,000 4 Contifions Vent. / Lighting / Safety Yes
Samuelle Jackson 0 $0 0 Institution of a Supplier Code of Conduct Yes
Bronko Mars 0 $0 0
Steff Caraway 0 $0 0
Jay XYZ 0 $0 0
Nunchuck Norris 0 $0 0
Roger Federation 0 $0 0
Nick Shavan 0 $0 0
Anderson Blooper 0 $0 0
Mic Jagermeister 0 $0 0
Jim Hardball 0 $0 0
LaBron Game 0 $0 0
Flint Westwood 0 $0 0

Finance and Cash Flow

Sources of 1-Year Loan $0 Uses for Early Repayment of #1
Additional Cash 5-Year Loan $25,000 Excess Cash Long-Term Loans None
($000s)
10-Year Loan $0 Dividend ($ per shares) $0.25
Stock Issue (000s of shares) 0 Stock Repurchase (000s of shares) 0

Y11 Financial Performance Projections Y11 Market Performance Projections N.A. E-A A-P L.A.
Total Revenues ($000s) $455,052 Internet Market Share 8.2% 8.2% 8.4% 8.9%
Net Profit ($000s) $50,520 Pairs Sold (000s) 394 337 269 279
Earnings Per Share (EPS) $2.53 Wholesale Market Share 7.9% 8.0% 8.3% 7.4%
Return on Average Equity (ROE) 21.7%
Credit Rating A Pairs Sold (000s) 1,994 1,618 1,386 1,190
Image Rating 72 Private-Label Market Share 8.4% 9.2% 10.8% 10.8%
Ending Cash Balance ($000s) $+7,903 Pairs Sold (000s) 223 245 293 293

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