1. Analysis and Interim Report Valeria Balseca Sales & Marketing Manager Claudia Prada MM Manager Jhonattan Polo CEO

2. 1. Strategies of Companies Company DDCompany EECompany FF PriceAvg Price Decreasing (constant rate) Avg Price Constant (oscillating variations) Avg Price Decreasing (constant rate) MarginIncreasing (-29% to 21%) Decreasing (1% to -4%) Increasing (-47% to -3%) MarketingNo Marketing Strategy $0 Low Marketing investment $865 High Marketing investment in Q4, but not representative $4170 InventoryLow Inventory Levels (Avg 199,084 un/day) Medium Inv. levels (Avg 205,109 un/day) High Inventory levels (Avg 228,691 un/day) ProductionNo new product lines2 New Product lines of 500g (Blueberry & Original) 2 New Product lines of 500g (Strawberry & Mixed) ProcurementHigh order quantities (>200,000KG) Low order quantities (>200,000KG) InvestmentsNoneReduce set up time ($200,000: from 12hr to 7.5hr approx.) None

3. 2. Profit and revenues

5. 3. Investment for reducing setup time

6. 5. Investment for increasing capacity No company invested for increasing capacity

7. 5. Sold quantities and revenue – DC 10 Highest: Company DD

8. 5. Sold quantities and revenue – DC 12 Highest: Company DD

9. 5. Sold quantities and revenue – DC 14 Highest in Units: Company EE Highest in Revenue: Company FF

10. 6. % of Sold quantities of new products

12. 7. % of revenue from new products

14. 8. % of Revenue of each Distribution Channel

15. 9. Sold quantities and prices of each product FF-F011 Kg Nut Muesli

16. 9. Sold quantities and prices of each product FF-F021 Kg Blueberry Muesli

17. 9. Sold quantities and prices of each product FF-F031 Kg Strawberry Muesli

18. 9. Sold quantities and prices of each product FF-F041 Kg Raisin Muesli

19. 9. Sold quantities and prices of each product FF-F051 Kg Original Muesli

20. 9. Sold quantities and prices of each product FF-F061 Kg Mixed Fruit Muesli

21. 9. Sold quantities and prices of each product FF-F02500 Kg Blueberry Muesli

22. 9. Sold quantities and prices of each product FF-F03500 Kg Strawberry Muesli

23. 9. Sold quantities and prices of each product FF-F05500 Kg Original Muesli

24. 9. Sold quantities and prices of each product FF-F06500 Kg Mixed Fruit Muesli

25. 10. Prices changes of each product FF-F011 Kg Nut Muesli

26. 10. Prices changes of each product FF-F021 Kg Blueberry Muesli

27. 10. Prices changes of each product FF-F031 Kg Strawberry Muesli

28. 10. Prices changes of each product FF-F041 Kg Raisin Muesli

29. 10. Prices changes of each product FF-F051 Kg Original Muesli

30. 10. Prices changes of each product FF-F061 Kg Mixed Fruit Muesli

31. 11. Marketing Expense

32. 12. Production

33. 12. Daily Production (continued) 25000 22500 20000 17500 15000 12500 10000 7500 5000 2500 0 25000 22500 20000 17500 15000 12500 10000 7500 5000 2500 0 25000 22500 20000 17500 15000 12500 10000 7500 5000 2500 0 37%64%75%64% 48%53%71%16% 28%62%45%47%

34. 13. Fixed costs (daily) for company FF

35. 14. Production Capacity Planned production Capacity – 21,000 units per day Average Productivity – 75% Production capacity allocation basis – 15,750 units per day Allocated fixed costs per unit – €1.71

36. 14. Production Capacity (continued)

37. 15. Raw Materials Cost Average raw material cost per company (from operations table):

38. 15. BOM (end of simulation)

39. 15. Planned Manufacturing Cost Company FF

40. 15. Planned Manufacturing Costs

41. 16. Purchase Vendors List (Company FF)

42. 16. Purchase (table ekpo)

43. 16. Purchase

44. 17. Inventory Changes

45. 18. Days out of stock

46. 19. Days without Production

47. 20. Production Utilization Rate 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

48. 21. Prices and profit correlation. Company FF Correlations: 1) Prices and profit 2) Price and revenue 3) Inventory and profit 4) Inventory and revenue 5) Profit/revenue and marketing expenses 6) Profit/revenue and utilization rate of production 7) Profit/revenue and investment What factor do you think is more critical?

49. 21. Prices and profit correlation. Company EE Correlations: 1) Prices and profit 2) Price and revenue 3) Inventory and profit 4) Inventory and revenue 5) Profit/revenue and marketing expenses 6) Profit/revenue and utilization rate of production 7) Profit/revenue and investment What factor do you think is more critical?

50. 21. Prices and profit correlation. Company DD Correlations: 1) Prices and profit 2) Price and revenue 3) Inventory and profit 4) Inventory and revenue 5) Profit/revenue and marketing expenses 6) Profit/revenue and utilization rate of production 7) Profit/revenue and investment What factor do you think is more critical?

51. 21. Prices and profit correlation. Company DD, EE, FF Correlations: 1) Prices and profit 2) Price and revenue 3) Inventory and profit 4) Inventory and revenue 5) Profit/revenue and marketing expenses 6) Profit/revenue and utilization rate of production 7) Profit/revenue and investment What factor do you think is more critical?

52. 22. Lessons Learned Consider not only raw materials cost when making decisions about setting up product prices. Take into account fixed costs!!! Produce in bigger lot sizes, as there are costs and times associated to changing products. Track of the inventory at all times and don’t run out of stock. Every day there can be significant changes and this could be determinant in the winning/loosing of the simulation. – It takes around 2 days to get raw materials once they are ordered – There is also setup time and production time Marketing does not seem to have impact on sales. If the company adopted a marketing strategy, it is important to determine the representative amount of marketing for each area an product to get an effect in sales. The decision of changing prices should be well analyzed, based on the available inventory and the sales. Prioritize production keeping inventory levels of products that have high sales In this simulation, sales where not influenced by marketing, and it was not very sensitive to price changes: even though we reduced prices to push our sales, our markets did not respond as expected