Decisions history 2 Years ago 1 Year ago Test Year Year 1 Year 2 Year 3 Year 4 Year 5 Performance Share Value 140 45 $ 131 78 $ 125 94 $ 158 33 $ 181 19 $ 217 52 $ 260 79 $ 311 13 $ Net Sales 2,333,850 $ 2,414,610 $ 2,503,208 $ 2,956,490 $ 4,340,284 $ 4,324,769 $ 4,475,069 $ 4,774,448 $ Net Earnings (loss) (95,512 $) (86,695 $) (58,376 $) 265,461 $ 228,653 $ 363,320 $ 432,659 $ 503,426 $ Kayaks Produced 6,947 6,947 6,947 6,947 9,642 9,642 9,642 9,642 Number of employees 30 29 30 30 46 43 43 43 Director of Marketing Territories Canada Yes Yes Yes Yes Yes Yes Yes Yes USA Eastern No No No No No No No No USA Western No No No No Yes Yes Yes Yes Mexico No No No No No No No Yes Promotion Traditional media Television 9 9 5 5 5 5 5 5 Magazines 12 12 30 20 20 20 20 20 Publicity Billboards 18 18 1 0 0 0 0 0 Catalogues, brochures, flyers 12 12 13 13 13 13 13 13 New Media Corporate Web Site 9 9 3 3 3 3 3 3 Social Media, blogs, newsletters 4 4 10 22 22 22 17 17 Telemarketing 4 4 1 0 0 0 0 0 Other Trade Shows 12 12 15 15 15 15 20 20 Contests 10 10 12 12 15 15 15 15 Promotional Articles 10 10 10 10 7 7 7 7 Products Name of product K1 K1 Agile A1 Agile A1 Agile A1 Agile A1 Agile A1 Agile A1 Targeted segment Leisure (Sit In) Leisure (Sit In) Leisure (Sit In) Leisure (Sit In) Leisure (Sit In) Leisure (Sit In) Leisure (Sit In) Leisure (Sit In) Material Low density polyethylene Low density polyethylene Low density polyethylene High density polyethylene High density polyethylene High density polyethylene High density polyethylene High density polyethylene Rudders Yes Yes Yes Yes Yes Yes Yes Yes Stickers Yes Yes Yes Yes Yes Yes Yes Yes Packaging Canvas bag Canvas bag Canvas bag Canvas bag Canvas bag Canvas bag Canvas bag Canvas bag Warranty 2 years 2 years 2 years 4 years 4 years 4 years 4 years 4 years Retail price Canada 481 $ CAD 495 $ CAD 510 $ CAD 632 $ CAD 632 $ CAD 632 $ CAD 632 $ CAD 632 $ CAD USA Eastern USA Western 591 $ USD 591 $ USD 640 $ USD 666 $ USD Mexico 9,848 $ MXN Retailers' Discount 28 00 28 00 27 50 27 50 27 50 27 50 27 50 27 50 Promotion 35,000 $ 40,000 $ 40,000 $ 45,000 $ 45,000 $ 50,000 $ 55,000 $ 55,000 $ Production Manager Production of theoretical capacity utilization 67 67 67 67 62 62 62 62 Determine the budget for preventive maintenance (by oven) 8,501 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 14,000 $ Supply and Delivery Rudder Suppliers Kayak Direction Kayak Direction Kayak Direction Kayak Direction Kayak Direction Kayak Direction Kayak Direction Kayak Direction Supplier for Kayak Stickers Sticker Kayak Sticker Kayak Sticker Kayak Sticker Kayak Style Impression Style Impression Style Impression Style Impression Transport Provider Total Transport Total Transport Total Transport Total Transport Total Transport Total Transport Total Transport Total Transport Industrial Engineering Improvement Projects null null None Just In Time method None None None None Director of Human Resources Personnel Engineer (Product Development) Do not recruit new employees Recruit a new employee Recruit a new employee Recruit a new employee Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Supervisor (Production Line) Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Recruit a new employee Do not recruit new employees Do not recruit new employees Secretary Accounting Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Do not recruit new employees Salary Hourly wage Engineers (Product Development) 28 00 $ 28 50 $ 28 50 $ 29 10 $ 29 10 $ 29 10 $ 31 20 $ 34 95 $ Supervisors (Production Line) 17 50 $ 17 65 $ 18 70 $ 19 10 $ 19 75 $ 20 25 $ 20 25 $ 20 25 $ Labourers 10 25 $ 10 50 $ 10 50 $ 11 50 $ 11 50 $ 12 45 $ 12 45 $ 12 45 $ Secretary Accounting 18 50 $ 18 70 $ 18 70 $ 18 45 $ 18 45 $ 18 45 $ 18 45 $ 18 45 $ Other Sales Representative 50,500 $ 51,500 $ 51,500 $ 51,500 $ 51,500 $ 51,500 $ 51,500 $ 53,000 $ Commission for Sales Representative 1 50 1 50 1 50 1 50 1 50 2 00 2 50 3 00 Participation to benefits by upper management Profit sharing for upper management staff 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 Benefits New benefits granted null null None None Gifts and Awards Life Insurance Plan Cell phone plan Employee Assistance Program Training Training and development 2 00 1 00 1 00 1 25 1 50 2 00 2 00 2 25 Director of Finance Capital Factory Expansion Project None None None None Add one oven None None None Financial Services Cash Management No investments No investments No investments Investment Variable rate Insurances Water and Ice Damage Insurance No No No No No No No No Theft No No No No No No No No Broken Machinery and Equipment No No Yes Yes Yes Yes Yes Yes Damaged Finished Products No No Yes Yes Yes Yes Yes Yes Damaged Office Material No No No No No No No No Legal Protection No No Yes Yes Yes Yes Yes Yes Market study Purchase of a market analysis No No No No No No No No Cases decisions Consumer Discounts Yes New Colours Yes Defective Products Give a discount and continue to sell kayaks to this client Unexpected Expenses Offer a lower amount than the asked price without any discussion with insurance company Retailer Bankruptcy Continue to sell to distributors in financial difficulty CRM Software Fundraising Campaign Social Media Patents Wage Negotiations Projected Income Statement Real Projected Variation Year 5 Year 6 Sales forecast (in units) 9,441 9,931 Sales forecast (in units) Inventory Beginning of year 289 289 Production target 9,642 9,642 Kayaks available for sale 9,931 9,931 Less Sales forecast 9,441 9,931 Less Return of goods 201 211 Inventory End of year 289 0 Revenue Sales of kayaks at regular price 6 585 445 6 926 289 5 2 Less Retail Discount 1 810 997 1 904 729 Net sales 4 774 448 5 021 559 5 2 Cost of goods sold Finished products stock Beginning of year 78 897 77 169 Add Cost of finished products 2 574 599 2 573 698 Goods available for sale 2 653 496 2 650 867 Less Finished products stock End of year 77 169 0 Cost of goods manufactured 2 576 327 2 650 867 Add Freight 395 155 399 846 Cost of goods sold 2 971 482 3 050 713 2 7 Gross Profit (loss) 1 802 966 1 970 847 9 3 Operating Expenses Sales Expenses Salaries and Benefits 181 371 181 371 0 0 Commission 143 233 150 647 5 2 Travel and Hospitality 20 225 20 511 1 4 Advertising and Promotion 55 000 55 000 0 0 Selling expenses 399 830 407 529 1 9 Administration General Expenses Salaries and Benefits 506 483 526 922 4 0 Profit sharing for upper management 0 0 Layoffs 0 0 Donations 4 157 4 157 0 0 Taxes and Licences 26 190 26 561 1 4 Training Expenses 33 897 34 301 1 2 Insurances Administration 4 144 4 203 1 4 Other Expenses 45 553 46 198 1 4 Total Administration General Expenses 620 426 642 342 3 5 Financial Expenses Banking Charges 5 061 5 398 Interest expense Short term 5 252 6 114 Penalty for exceeding banking line of credit 0 0 Interest expense Long term 17 200 13 477 Total Financial Expenses 27 513 24 990 9 2 Total Operating Expenses 1 047 768 1 074 861 2 6 Operating Income (loss) 755 198 895 986 18 6 Other Revenue (expenses) Investments Income 3 264 0 Earnings (loss) on disposable assets 0 0 Contingencies ( 18 130) 0 Total Other Revenue (expenses) ( 14 866) 0 Income (loss) before taxes 740 333 895 986 Income taxes ( 236 906) ( 286 715) Tax credit for past losses 0 0 Intervention by the instructor 0 0 Net Profit (loss) 503 426 609 270 21 0 Net Profit Margin 10 5 12 1 Instructions Develop the Aggregate Plan using the information above and the company forecast What strategy should you decide to apply Why Use Excel (Please show the steps)

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Decisions history 2 Years ago 1 Year ago Test Year Year 1 Year 2 Year 3 Year 4 Year 5 Performance Share Value 140.45 $

Decisions history

	2 Years ago	1 Year ago	Test Year	Year 1	Year 2	Year 3	Year 4	Year 5
Performance
Share Value	140.45 $	131.78 $	125.94 $	158.33 $	181.19 $	217.52 $	260.79 $	311.13 $
Net Sales	2,333,850 $	2,414,610 $	2,503,208 $	2,956,490 $	4,340,284 $	4,324,769 $	4,475,069 $	4,774,448 $
Net Earnings (loss)	(95,512 $)	(86,695 $)	(58,376 $)	265,461 $	228,653 $	363,320 $	432,659 $	503,426 $
Kayaks Produced	6,947	6,947	6,947	6,947	9,642	9,642	9,642	9,642
Number of employees	30	29	30	30	46	43	43	43


Director of Marketing
Territories
Canada	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
USA-Eastern	No	No	No	No	No	No	No	No
USA-Western	No	No	No	No	Yes	Yes	Yes	Yes
Mexico	No	No	No	No	No	No	No	Yes
Promotion
Traditional media
Television	9%	9%	5%	5%	5%	5%	5%	5%
Magazines	12%	12%	30%	20%	20%	20%	20%	20%
Publicity Billboards	18%	18%	1%	0%	0%	0%	0%	0%
Catalogues, brochures, flyers	12%	12%	13%	13%	13%	13%	13%	13%
New Media
Corporate Web Site	9%	9%	3%	3%	3%	3%	3%	3%
Social Media, blogs, newsletters	4%	4%	10%	22%	22%	22%	17%	17%
Telemarketing	4%	4%	1%	0%	0%	0%	0%	0%
Other
Trade Shows	12%	12%	15%	15%	15%	15%	20%	20%
Contests	10%	10%	12%	12%	15%	15%	15%	15%
Promotional Articles	10%	10%	10%	10%	7%	7%	7%	7%
Products
Name of product	K1	K1	Agile A1	Agile A1	Agile A1	Agile A1	Agile A1	Agile A1
Targeted segment	Leisure (Sit-In)	Leisure (Sit-In)	Leisure (Sit-In)	Leisure (Sit-In)	Leisure (Sit-In)	Leisure (Sit-In)	Leisure (Sit-In)	Leisure (Sit-In)
Material	Low-density polyethylene	Low-density polyethylene	Low-density polyethylene	High-density polyethylene	High-density polyethylene	High-density polyethylene	High-density polyethylene	High-density polyethylene
Rudders	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Stickers	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Packaging	Canvas bag	Canvas bag	Canvas bag	Canvas bag	Canvas bag	Canvas bag	Canvas bag	Canvas bag
Warranty	2 years	2 years	2 years	4 years	4 years	4 years	4 years	4 years
Retail price
Canada	481 $ CAD	495 $ CAD	510 $ CAD	632 $ CAD	632 $ CAD	632 $ CAD	632 $ CAD	632 $ CAD
USA-Eastern	-	-	-	-	-	-	-	-
USA-Western	-	-	-	-	591 $ USD	591 $ USD	640 $ USD	666 $ USD
Mexico	-	-	-	-	-	-	-	9,848 $ MXN
Retailers' Discount	28.00%	28.00%	27.50%	27.50%	27.50%	27.50%	27.50%	27.50%
Promotion	35,000 $	40,000 $	40,000 $	45,000 $	45,000 $	50,000 $	55,000 $	55,000 $


Production Manager
Production
% of theoretical capacity utilization	67	67	67	67	62	62	62	62
Determine the budget for preventive maintenance (by oven)	8,501 $	10,000 $	10,000 $	10,000 $	10,000 $	10,000 $	10,000 $	14,000 $
Supply and Delivery
Rudder Suppliers	Kayak Direction	Kayak Direction	Kayak Direction	Kayak Direction	Kayak Direction	Kayak Direction	Kayak Direction	Kayak Direction
Supplier for Kayak Stickers	Sticker-Kayak	Sticker-Kayak	Sticker-Kayak	Sticker-Kayak	Style Impression	Style Impression	Style Impression	Style Impression
Transport Provider	Total Transport	Total Transport	Total Transport	Total Transport	Total Transport	Total Transport	Total Transport	Total Transport
Industrial Engineering
Improvement Projects	???null???	???null???	None	Just In Time method	None	None	None	None


Director of Human Resources
Personnel
Engineer (Product Development)	Do not recruit new employees	Recruit a new employee	Recruit a new employee	Recruit a new employee	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees
Supervisor (Production Line)	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Recruit a new employee	Do not recruit new employees	Do not recruit new employees
Secretary/Accounting	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees	Do not recruit new employees
Salary
Hourly wage
Engineers (Product Development)	28.00 $	28.50 $	28.50 $	29.10 $	29.10 $	29.10 $	31.20 $	34.95 $
Supervisors (Production Line)	17.50 $	17.65 $	18.70 $	19.10 $	19.75 $	20.25 $	20.25 $	20.25 $
Labourers	10.25 $	10.50 $	10.50 $	11.50 $	11.50 $	12.45 $	12.45 $	12.45 $
Secretary/Accounting	18.50 $	18.70 $	18.70 $	18.45 $	18.45 $	18.45 $	18.45 $	18.45 $
Other
Sales Representative	50,500 $	51,500 $	51,500 $	51,500 $	51,500 $	51,500 $	51,500 $	53,000 $
Commission for Sales Representative	1.50%	1.50%	1.50%	1.50%	1.50%	2.00%	2.50%	3.00%
Participation to benefits by upper management
Profit sharing for upper management staff	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Benefits
New benefits granted	???null???	???null???	None	None	Gifts and Awards	Life Insurance Plan	Cell phone plan	Employee Assistance Program
Training
Training and development	2.00 %	1.00 %	1.00 %	1.25 %	1.50 %	2.00 %	2.00 %	2.25 %


Director of Finance
Capital
Factory Expansion Project	None	None	None	None	Add one oven	None	None	None
Financial Services
Cash Management	No investments	-	-	-	-	No investments	No investments	Investment Variable rate
Insurances
Water and Ice Damage Insurance	No	No	No	No	No	No	No	No
Theft	No	No	No	No	No	No	No	No
Broken Machinery and Equipment	No	No	Yes	Yes	Yes	Yes	Yes	Yes
Damaged Finished Products	No	No	Yes	Yes	Yes	Yes	Yes	Yes
Damaged Office Material	No	No	No	No	No	No	No	No
Legal Protection	No	No	Yes	Yes	Yes	Yes	Yes	Yes


Market study
Purchase of a market analysis	No	No	No	No	No	No	No	No


Cases decisions
Consumer Discounts	-	-	-	Yes	-	-	-	-
New Colours	-	-	-	-	Yes	-	-	-
Defective Products	-	-	-	-	-	Give a discount and continue to sell kayaks to this client	-	-
Unexpected Expenses	-	-	-	-	-	-	Offer a lower amount than the asked price without any discussion with insurance company	-
Retailer Bankruptcy	-	-	-	-	-	-	-	Continue to sell to distributors in financial difficulty
CRM Software	-	-	-	-	-	-	-	-
Fundraising Campaign	-	-	-	-	-	-	-	-
Social Media	-	-	-	-	-	-	-	-
Patents	-	-	-	-	-	-	-	-
Wage Negotiations	-	-	-	-	-	-	-	-

Projected Income Statement

	Real	Projected	Variation
	Year 5	Year 6

Sales forecast (in units)	9,441	9,931
Sales forecast (in units)
Inventory - Beginning of year	289	289
Production target	9,642	9,642
Kayaks available for sale	9,931	9,931
Less: Sales forecast	9,441	9,931
Less: Return of goods	201	211
Inventory - End of year	289	0

Revenue
Sales of kayaks at regular price	6 585 445	6 926 289	+ 5.2%
Less: Retail Discount	1 810 997	1 904 729
Net sales	4 774 448	5 021 559	+ 5.2%

Cost of goods sold
Finished products stock - Beginning of year	78 897	77 169
Add: Cost of finished products	2 574 599	2 573 698
Goods available for sale	2 653 496	2 650 867
Less: Finished products stock - End of year	77 169	0
Cost of goods manufactured	2 576 327	2 650 867
Add: Freight	395 155	399 846
Cost of goods sold	2 971 482	3 050 713	+ 2.7%

Gross Profit (loss)	1 802 966	1 970 847	+ 9.3%

Operating Expenses
Sales Expenses
Salaries and Benefits	181 371	181 371	0.0%
Commission	143 233	150 647	+ 5.2%
Travel and Hospitality	20 225	20 511	+ 1.4%
Advertising and Promotion	55 000	55 000	0.0%
Selling expenses	399 830	407 529	+ 1.9%

Administration / General Expenses
Salaries and Benefits	506 483	526 922	+ 4.0%
Profit-sharing for upper management	0	0	-
Layoffs	0	0	-
Donations	4 157	4 157	0.0%
Taxes and Licences	26 190	26 561	+ 1.4%
Training Expenses	33 897	34 301	+ 1.2%
Insurances - Administration	4 144	4 203	+ 1.4%
Other Expenses	45 553	46 198	+ 1.4%
Total Administration / General Expenses	620 426	642 342	+ 3.5%

Financial Expenses
Banking Charges	5 061	5 398
Interest expense - Short term	5 252	6 114
Penalty for exceeding banking line of credit	0	0
Interest expense - Long term	17 200	13 477
Total Financial Expenses	27 513	24 990	- 9.2%

Total Operating Expenses	1 047 768	1 074 861	+ 2.6%

Operating Income (loss)	755 198	895 986	+ 18.6%

Other Revenue (expenses)
Investments Income	3 264	0
Earnings (loss) on disposable assets	0	0
Contingencies	( 18 130)	0
Total Other Revenue (expenses)	( 14 866)	0	-

Income (loss) before taxes	740 333	895 986
Income taxes	( 236 906)	( 286 715)
Tax credit for past losses	0	0
Intervention by the instructor	0	0
Net Profit (loss)	503 426	609 270	+ 21.0%

Net Profit Margin	10.5 %	12.1 %

Instructions:

Develop the Aggregate Plan using the information above and the company forecast. What strategy should you decide to apply? Why? Use Excel (Please show the steps)