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E Company (practice) Branded Production Help Print Save Decisions DECISION ENTRIES - YEAR 11 Compensation & Training North America Europe-Africa Asia-Pacific Latin America Branded Production Branded Footwear Production Facility Facility Facility Facility Production Facilities Branded Production Materials Standard Materials % 60 % 0% 10% 0% Distribution & Warehouse Specs (see anticipated materials prices at bottom of page) Superior Materials % 40 0 v % 60 v % 0 % Internet Marketing Number of Models / Styles (50 to 500 models) 50 v 200 50 Wholesale Marketing k/model $ 0 k/model $ 10 k/model $ 0 v k/model Private-Label Operations Enhanced Styling / Features ($000s per model) Celebrity Endorsements TQM / 6-Sigma Quality Program ($/pr. produced) $ 10 per pair $ 0.00 per pair $ 0.90 ~ per pair 0.00 |per pair 12 Corporate Citizenship Projected S/Q Rating (the style/quality rating ranges from 0.5 to 10.0 stars) 14 0.0* 4.2* 0.0 16 Finance & Cash Flow Projected Reject Rate (percentage of pairs that will fail inspection) 0.0% 9.2% 1.0% 18 FOOTWEAR INDUSTRY REPORT Maximum Y11 Production Capability Without Overtime 20 airs 0 pairs 6,000 pairs 0 pairs (assuming all unused facility space is filled at the beginning of the year with 22 Page 1 (Scoreboard) production equipment) Maximum Overtime 7,200 pairs pairs 24 airs 0 pairs Page 2 (EPS, ROE, Stock Price) Total Branded Production Needed in Year 11 8,700 26 This figure is an approximation given entories, projected reject rates, and entries that currently reside on the Internet and Wholesale Marketing (before rejects) decision pages. The company must s 28 ction of about this many pairs to satisfy projected demand and inventory requirements. Page 3 (Credit Rating, Image, CSRC) (to satisfy projected demand in all four regions) 30 Note: To install production equipment at the beginning of the current year in a facility that cu Page 3b (Bonus Point Awards) 32 unused space, go to the Production Facilities decision entry page (the next item in the decision entries menu). 34 Page 4 (Industry Overview) 36 38 herica Europe-Africa Asia-Pacific Latin America 40 - ity Facility Facility Facility Projected Y11 Performance Year 11 Production Capability Regular-Time 4,000 pairs 0 pairs 4,000 pairs 0 pairs Scoring Measures Year 11 Investor Expect. (000s of pairs before rejects) 800 0 800 0 Earnings Per Share $2.15 $2.50 Overtime (20% maximum) Return On Equity 18.6% 21.0% Total Production Capability 4,800 pairs 0 pairs 4,800 pairs 0 pairs Credit Rating A- B+ Pairs to be Manufactured in Y11 (000s) Total = 8,282 4033 pairs 0 pairs 4249 pairs 0 pairs Image Rating 54 70 Branded Footwear Production Regular-Time Production 4,000 pairs 0 pairs 4,000 pairs 0 pairs Change from Other Measures Year 11 Y10 (000s of pairs) Overtime Production 33 0 249 0 Net Revenues (5000s) 450,740 -4.2% Rejected Pairs (and reject rate) 282 (7.0%) 0 (0.0%) 391 (9.2%) 0 (0.0%) Net Profit (5000s) 42,944 +7.4% Net Branded Production 3,751 3,858 0 Ending Cash (5000s) 45, 128 +39,054 Production Capability Remaining for Private-Label 767 pairs 0 pairs 551 pairs 0 pairs 2 16 70 Cost of Rejected Pairs (in $000s and $ per pair produced) $6,452 $1.72 $0.00 $7,793 $2.02 $0 $0.00 $000s $/pair $000s $/pair $000s $/pair $000s $/pair Costs Associated with the Production of Materials Cost 33,877 9.03 0.00 40, 791 10.57 0.00 Branded Footwear Labor Cost (including supervisory costs) 35, 714 9.52 0 0.00 22,020 5.71 0 0.00 Enhanced Styling/Features 2,000 0.53 0.00 2,000 0.52 0 0.0 TOM / 6-Sigma Quality Program 4,033 1.08 0.00 3,824 0.99 0.00 Production Run Set-Up 4,50 1.20 0.00 4.500 1.17 0.0 Maintenance (of facilities and equipment) 2,907 0.77 0.00 3, 755 0.97 0.00 o o o o Depreciation (of facilities and equipment) 9,402 2.51 0.00 7,792 2.02 0.0 Total Branded Production Cost 92,433 24.64 0.00 84,682 21.95 0.00 Anticipated Y11 Materials Prices Standard Materials | 6.00 |per pair Superior Materials ( 12.00 v per pair Beginning figures represent actual materials prices from the prior year.Branded Production Help Print Save Decisions North America Europe-Africa Asia-Pacific Latin America Branded Footwear Production Facility Facility Facility Facility Branded Production Materials Standard Materials % 60% 0% 40% 0% Specs (see anticipated materials prices at bottom of page) Superior Materials % 40 v % 0 % 60 0 v % Number of Models / Styles (50 to 500 models) 200 50 200 50 50 Enhanced Styling / Features ($000s per model) 5 100 k/model $ 0 k/model $ 10 v k/model $ 0 v k/model 150 TQM / 6-Sigma Quality Program ($/pr. produced) per pair $ 0.00 per pair $ 0.90 per pair $ 0.00 ~ per pair 200 Projected S/Q Rating (the style/quality rating ranges from 0.5 to 10.0 stars) 250 0.0* 4.2* 0.0* 300 Projected Reject Rate (percentage of pairs that will fail inspection) 350 0.0% 9.2% 0.0% Maximum Y11 Production Capability 400 Without Overtime 450 0 pairs 6,000 pairs 0 pairs (assuming all unused facility space is filled at the beginning of the year with production equipment) Maximum Overtime 500 airs 0 pairs 7,200 pairs 0 pairs Total Branded Production Needed in Year 11 8,700 This figure is an approximation given beginning inventories, projected reject rates, and entries that currently reside on the Internet and Wholesale Marketing (to satisfy projected demand in all four regions) (before rejects) decision pages. The company must schedule production of about this many pairs to satisfy projected demand and inventory requirements. Note. To install production equipment at the beginning of the current year in a facility that currently has unused space, go to the Production Facilities decision entry page (the next item in the decision entries menu). North America Europe-Africa Asia-Pacific Latin America Facility Facility Facility Facility Year 11 Production Capability Regular-Time 4,000 pairs 0 pairs 4,000 pairs 0 pairs (000s of pairs before rejects) Overtime (20% maximum) 800 0 800 Total Production Capability 4,800 pairs 0 pairs 4,800 pairs pairs Pairs to be Manufactured in Y11 (000s) Total = 8,282 4033 |pairs 0 pairs 4249 pairs 0 pairs Branded Footwear Production Regular-Time Production 4,000 pairs 0 pairs 4,000 pairs 0 pairs (000s of pairs) Overtime Production 33 0 249 Rejected Pairs (and reject rate) 282 (7.0%) 0 (0.0%) 391 (9.2% ) 0 (0.0%) Net Branded Production 3,751 3,858 0 Production Capability Remaining for Private-Label 767 pairs 0 pairs 551 pairs 0 pairs Cost of Rejected Pairs (in $000s and $ per pair produced) $6,452 $1.72 $0.00 $7,793 $2.02 $0 $0.00 $000s 5/pair $000s $/pair $000s $/pair $000s $/pair Costs Associated with the Production of Materials Cost 33,877 9.03 0.00 40,79 10.57 0.00 Branded Footwear Labor Cost (including supervisory costs) 35,714 9.52 O 0.00 22,020 5.71 0 0.00 Enhanced Styling/Features 2,000 0.53 0.00 2.000 0.52 0 0.00 TQM / 6-Sigma Quality Program 4,033 1.08 0.00 3,824 0.99 0.00 Production Run Set-Up 4,500 1.20 0.00 4,500 1.17 0.00 Maintenance (of facilities and equipment) 2,907 0.77 0.00 3,755 0.97 0.00 Depreciation (of facilities and equipment) 9,402 2.51 0.00 7,792 2.02 0.00 Total Branded Production Cost 92,433 24.64 0.00 84,682 21.95 0.00 Anticipated Y11 Materials Prices Standard Materials | 6.00 |per pair Superior Materials | 12.00 per pair Beginning figures represent actual materials prices from the prior year.Branded Production Help Print Save Decisions North America Europe-Africa Asia-Pacific Latin America Branded Footwear Production Facility Facility Facility Facility Branded Production Materials Standard Materials % 60% 0% 40 % 0% Specs (see anticipated materials prices at bottom of page) Superior Materials % 40 % 0 % 60 % 0 v % Number of Models / Styles (50 to 500 models) 200 50 200 50 Enhanced Styling / Features ($000s per model) 10 k/model $ 0 v k/mode $ 10 k/model $ 0 v k/model TQM / 6-Sigma Quality Program ($/pr. produced) per pair $ 0.00 ~ per pair $ 0.90 ~ per pair $ 0.00 per pair DO ANO Projected S/Q Rating (the style/quality rating ranges from 0.5 to 10.0 stars) 0.0* 4.2* 0.0* Projected Reject Rate (percentage of pairs that will fail inspection) 0.0% 9.2% 0.0% 10 Maximum Y11 Production Capability Without Overtime air 6,000 pairs (assuming all unused facility space is filled at the beginning of the year with 12 0 pairs 0 pairs production equipment) Maximum Overtime 14 lairs 0 pairs 7,200 pairs 0 pairs 16 Total Branded Production Needed in Year 11 8,700 This figure is an approximation given 18 entories, projected reject rates, and entries that currently reside on the Internet and Wholesale Marketing (to satisfy projected demand in all four regions) before rejects cision pages. The company must s 20 ction of about this many pairs to satisfy projected demand and inventory requirements. Note: To install production equipment at the beginning of the current year in a facility that cu 22 unused space, go to the Production Facilities decision entry page (the next item in the decision entries menu). 24 26 28 herica Europe-Africa Asia-Pacific Latin America 30 ity Facility Facility Facility 32 Year 11 Production Capability Regular-Time 34 pairs 0 pairs 4,000 pairs 0 pairs (000s of pairs before rejects) Overtime (20% maximum) 37 0 800 40 Total Production Capability pairs 0 pairs 4,800 pairs 0 pairs Pairs to be Manufactured in Y11 (000s) Total = 8,282 4033 pairs 0 pairs 4249 pairs 0 pairs Branded Footwear Production Regular-Time Production 4,000 pairs 0 pairs 4,000 pairs 0 pairs (000s of pairs Overtime Production 33 0 249 Rejected Pairs (and reject rate) 282 (7.0%) 0 (0.0%) 391 (9.2%) 0 (0.0%) Net Branded Production 3,751 3,858 Production Capability Remaining for Private-Label 767 pairs 0 pairs 551 pairs 0 pairs Cost of Rejected Pairs (in $000s and $ per pair produced) $6,452 $1.72 $0.00 $7,793 $2.02 $0.00 $000 s $/pair $000s $/pair $000s $/pair 6000s $/pair Costs Associated with the Production of Materials Cost 33,877 9.03 0.00 40,791 10.57 0.00 Branded Footwear Labor Cost (including supervisory costs) 35, 714 9.52 0.00 22,020 5.71 0 0.00 Enhanced Styling/Features 2,000 0.53 O 0.00 2,000 0.52 0.00 TQM / 6-Sigma Quality Program 4,033 1.08 0.00 3,824 0.99 0.00 Production Run Set-Up 4,500 1.20 0.00 4,500 1.17 0.00 Maintenance (of facilities and equipment) 2,907 0.77 0.00 3, 755 0.97 10 0.00 Depreciation (of facilities and equipment) 9,402 2.51 0.00 7,792 2.02 10 0.00 O Total Branded Production Cost 92,433 24.64 0.00 84,682 21.95 0.00 Anticipated Y11 Materials Prices Standard Materials | 6.00 per pair Superior Materials ( 12.00 per pair Beginning figures represent actual materials prices from the prior year.Branded Production Help Print Save Decisions North America Europe-Africa Asia-Pacific Latin America Branded Footwear Production Facility Facility Facility Facility Branded Production Materials Standard Materials % 60 % 0 % 40 % 0 % Specs (see anticipated materials prices at bottom of page) Superior Materials % 40 0 v % 60 0 v % Number of Models / Styles (50 to 500 models) 200 50 200 50 Enhanced Styling / Features ($000s per model) $ 10 v k/model $ 0 v k/model $ 10 |k/model $ 0 k/model TQM / 6-Sigma Quality Program ($/pr. produced) $ 1.00 per pair $ 0.00 per pair $ 0.90 per pair $ 0.00 ~ per pair 0.00 Projected S/Q Rating (the style/quality rating ranges from 0.5 to 10.0 stars) 0.10 0.0* 4.2* 0.0* Projected Reject Rate (percentage of pairs that will fail inspection) 0.20 1.0% 9.2% 0.0% 0.30 Maximum Y11 Production Capability Without Overtime 0.40 airs 0 pairs 6,000 pairs 0 pairs (assuming all unused facility space is filled at the beginning of the year with 0.50 production equipment) Maximum Overtime airs 0 pairs 7,200 pairs 0 pairs 0.60 Total Branded Production Needed in Year 11 8,700 This figure is an approximation given 0,70 entories, projected reject rates, and entries that currently reside on the Internet and Wholesale Marketing (to satisfy projected demand in all four regions) (before rejects) decision pages. The company must$ 0.80 ction of about this many pairs to satisfy projected demand and inventory requirements. Note: To install production equipment at the beginning of the current year in a facility that c 0.90 unused space, go to the Production Facilities decision entry page (the next item in the decision entries menu). 1.00 1.10 1.20 nerica Europe-Africa Asia-Pacific Latin America 1.30 ity Facility Facility Facility 1.40 Year 11 Production Capability Regular-Time 1.50 pairs 0 pairs 4,000 pairs 0 pairs (000s of pairs before rejects) Overtime (20% maximum) 1.60 0 800 0 1.70 Total Production Capability pairs 0 pairs 4,800 pairs 0 pairs 1.80 Pairs to be Manufactured in Y11 (000s) Total = 8,282 1.90 pairs 0 pairs 4249 pairs 0 pairs Branded Footwear Production Regular-Time Production 4,000 pairs 0 pairs 4,000 pairs 0 pairs (000s of pairs) Overtime Production 33 0 249 0 Rejected Pairs (and reject rate) 282 (7.0%) 0 (0.0%) 391 (9.2%) 0 (0.0%) Net Branded Production 3,751 3,858 Production Capability Remaining for Private-Label 767 pairs 0 pairs 551 pairs 0 pairs Cost of Rejected Pairs (in $000s and $ per pair produced) $6,452 $1.72 $0.00 $7,793 $2.02 $0 $0.00 $000s $/pair $000s $/pai $000s $/pair $000s $/pair Costs Associated with the Production of Materials Cost 33,877 9.03 0.00 40,791 10.57 0 0.00 Branded Footwear Labor Cost (including supervisory costs) 35, 714 9.52 0.00 22,020 5.71 O 0.00 O O Enhanced Styling/Features 2,000 0.53 0.00 2,000 0.52 0.00 TQM / 6-Sigma Quality Program 4,033 1.08 0.00 3,824 0.99 0.00 Production Run Set-Up 4,500 1.20 10 0.00 4,500 1.17 O 0.00 Maintenance (of facilities and equipment) 2,907 0.77 0.00 3,755 0.97 10 0.00 Depreciation (of facilities and equipment) 9.402 2.51 0.00 7.792 2.02 10 0.00 Total Branded Production Cost 92,433 24.64 0 0.00 84,682 21.95 0.00 Anticipated Y11 Materials Prices Standard Materials | 6.00 |per pair Superior Materials ( 12.00 per pair Beginning figures rep aterials prices from the prior year