Welcome to KL3, Inc. Were glad that youve decided to come onboard with us. A few of our departments are working on their S&OP discussions and need some help coming up the final commitments. Were looking forward to you bringing in your skills to help us make solid, data-driven decisions.

Marketing

Its time to plan how to spend the next years Marketing budget. Currently, we use a mix of web ads (a combination of banner ads and social media), print ads in trade publications, and booths at trade shows to gain new customers. We plan to spend $250,000 next year on these marketing venues, and wed like you to put together a recommendation on how to distribute these funds. We have historically seen a 100% return from web ads, 150% return from print ads, and 75% return from trade booths. Trade show booths are expensive and have our lowest returns, but they help us build and maintain relationships that can make the efforts of our sales team easier in the long run. The minimum we would usually invest here is 25% of our budget. Print ads are surprisingly lucrative, but there are only so many publications in which our ads would be useful. We like to keep this budget tied to our web advertising budget. We dont want to spend more then two-thirds of our web budget on print ads.

All that said, we would like some input from you. Our Sales team has indicated that we might be underestimating the ROI for trade shows given the number of times theyve made deals based on continuous conversations over the course of several trade shows, which is admittedly a complicating factor. Based on their figuring, we could be getting as much as 100% return on trade shows. They argue that we should be spending more here. What are your thoughts on this?

We are considering changing our ratio of print to web spending. How much would we need to refigure this ratio for it make a difference to your recommendation?

Finally, weve been speaking with a consulting firm about our web ads. We think that we should be getting a better return, and they agree. They think that they can increase our web ROI to 125%. We were wondering if this would change how we allocate our budget. Also, do you think that their price of $25,000 a year is worth it?

Marketing Venue	ROI
Web	100%
Print	150%
Booths	75%

Operations

We currently have six plants that we use to produce our product, KL3 Product 3000. Below is a chart of how much it costs to use each factory and how many units each plant can produce each month. We need to produce at least 1,000,000 units a month to keep a smooth experience for our suppliers, and we want to keep our costs low. What would you recommend as the best plan for production?

Also, we want to look at the results of a test wed run. For plants 3 and 4, we tried to find either a high fixed cost - low unit cost model or a low fixed cost - high unit cost model. Now that weve settled all the arrangements, we finally know what the exact costs are going to be. We only want to continue with one of these plants, and we would like your guidance on which one we should move forward with as part of your recommendation.

	Plants
	1	2	3	4	5	6
Fixed Costs	$ 225,000	$ 300,000	$ 455,750	$ 100,000	$ 275,000	$ 325,000
Per Unit Cost	$ 25	$ 20	$ 10	$ 50	$ 20	$ 15
Potential Output	225,000	245,000	400,000	400,000	230,000	300,000