1. Strategy & Tactics Review

2. Evaluating Products Customer Buying Criteria - 2008 Low TechHigh Tech Price$15 – 35$25 – 45 Age3.00.0 Reliability14000- 20000 17000– 23000 Positioning6.3 / 13.79.5 / 10.5 NameSeg Units Sold Unit Inv Revision Date Age Dec. 31 MTBFPfmSizePrice Able1,094378May-082.1190006.813.2 AppleJun-080.62200010.5 9.5 AntsHigh413191Mar-080.722000109.7$45.00 BakerHigh76062Aug-081.5215001010.7$35.49 BestLow7250May-082.216500713.2$33.99 BoldHigh22176Jul-080.522000119.8$44.99 CakeLow1,292195Aug-082.1200007.811.3$32.25 CandyLow54211Oct-081.5140006.813.0$30.25 CornHigh50846Aug-080.9213459.79.3$43.25

3. Product Strategies… Low Tech products - Keep it in the fine cut circle - ONLY revise to manage the age (ideal = 3) - If the age over the year is 2-3 or 3-4- best - MTBF - never above 20,000 (<-best) High Tech products - Revise every year to keep on ideal spot - Revise every year to manage AGE (ideal = 0)

4. Production and Inventory You have a great low tech product You think you can sell about 2,400 units What does that mean for inventory management? Don’t stock out ( at least 1 unit left) Not more than 60 days of inventory What is the most you can sell and the least you can sell and still meet your inventory goals?

5. janfebmaraprilmayjunejulyaugseptoctnovdec 200 Produce 2,400 in a year… The Timing …

6. Timing … janfebmaraprilmayjunejulyaugseptoctnovdec Produce 2,400 in a year… 60 days= 1/6 year= (2400/6) = 400 units 200

7. Timing … janfebmaraprilmayjunejulyaugseptoctnovdec Produce 2,400 in a year… 60 days= 1/6 year= (2400/6) = 400 units INVENTORY GOALS… If you produce 2,400 units; You want at least 1 unit left (sales = 2,399 & units inventory = 1) You want no more than 400 units left (sales= 2,000 & units inventory = 400) 200

8. You have a new product coming out 1-Sept. ideal size (11.2), performance (8.8), MTBF (23,000), age (0 years) (it’s perfect) Factory with production capacity of 900 (auto=3) You think you can sell 33% of market Market size = 2,160 * 1.2 = 2,592 2,592 * 33% = 863… so you decide to produce 900. Can you sell 863? Why or why not? Can you make 900? Why or why not? New Product – 1 September

9. janfebmaraprilmayjunejulyaugseptoctnovdec 75 Produce 900 in a year… Timing … 75

10. janfebmaraprilmayjunejulyaugseptoctnovdec 75 Produce 900 in a year… Timing … 1 September... Sales begin Production begins

11. janfebmaraprilmayjunejulyaugseptoctnovdec 75 Produce 900 in a year… IF YOU HAD A WHOLE YEAR But you only have 1/3 year for… Sales and Production Timing … 1 September... Sales begin Production begins

12. janfebmaraprilmayjunejulyaugseptoctnovdec 75 Produce 900 in a year… IF YOU HAD A WHOLE YEAR But you only have 1/3 year for… Sales and Production Sales forecast= 300 Production schedule = 300 (600 would be 100% overtime) Timing … 1 September... Sales begin Production begins

13. jfmamjjasond Timing … jfmamjjasond 20062007 Run the company you have a.Product revisions- that happen quickly b.Set price, production, promo &sales Create the company you want to manage in the future a.Add new products b.Add capacity, increase automation, build new factory Create your “worst case scenario” and finance your vision Check your projected performance “pro-formas” “old” able“new” able new automation new product new factory

14. Business Plan & Process General- Mission R&D Marketing Production Finance Specific (tactical)- what are you going to do when are you going to do it how (specifically) will it get done

15. Low Tech Product strategy MTBF close to 20,000 revise to keep acceptable revise ONLY to manage age Marketing build awareness & accessibility aggressively NOT lowest price; highest price & meet sales Production automate aggressively and early OT is OK add capacity as needed Finance as you like

16. High Tech Product strategy revise every year- ideal spot and age add new products as you wish MTBF close to 23,000 Marketing build awareness & accessibility aggressively Market is not price sensitive Production automation- low…speeds R&D times add capacity as needed Finance as you like

17. Tactics Operate your current company Make decisions for the product you have now …(short term repositioning, price, promotion, sales, SALES FORECAST and PRODUCTION SCHEDULE) Make investments in the company you want to be in the future (new products- repositioning greater than a year, increased capacity or automation) Finance current operation and future growth