Table 1 Demographic data
  Population (millions)GDP ($) per capita% Internet access
European Union (EU) 501 3422267.3
North American free trade area (Nafta)  453 3731565.7
Other major economies 3504   539023.8

Table 2Marketing costs
Information on market shares € 5000
Information on competitors' activities € 7500

Table 3 Costs for agents (EU), distributors (Nafta) and internet distributor
Minimum quarterly support cost per agent € 5000
Recruiting cost per agent € 7500
Termination cost per agent € 5000

Table 4Internet marketing costs
Service cost (based on internet sales value) 3%
Initial joining fee to Internet Service Provider € 7500
Quarterly cost per website port € 1000
Cost of closing down an internet operation € 5000

Table 5 Manufacturing parameters
  Product 1Product 2Product 3
Minimum machining time per unit 60 min. 75 min. 120 min.
Minimum assembly time per unit 100 min. 150 min. 300 min.
Material content per unit 1 unit 2 units 3 units

Table 6Maintenance costs
Contracted maintenance per machine€ 85 per hour
Uncontracted breakdown repairs
(over contracted hours per machine)		€ 175 per hour

Table 7 Maximum hours available per machine per quarter
relative to shift level worked
Shift Level Maximum hours per quarter that each machine can work, accumulating hours to each successive level of shift Unskilled workers needed for each machine
1 576 4
2 1068 8
3 160212

Table 8 Valuation of rejected products
  Product 1Product 2Product 3
Scrap value per product unit€ 40 € 80€ 120

Table 9 Guarantee servicing charges
Product 1Product 2Product 3
Servicing charge per product unit€ 60€ 150€ 250

Table 10Production costs
Cost of supervision per shift € 12,500
Production overheads, per machine€ 3500
Machine running cost per hour € 8
Production planning cost per unit€ 1
Variable cost of inspection per unit€ 1

Table 11 Container capacity
  Product 1Product 2Product 3
Container capacity in product units 500 250 125
Note: mixed loads may be carried

Table 12 Distribution parameters
Daily all-in hire cost of container and tractor€ 650
Distance to Nafta shipment port 250 km
Cost of container hire across North Atlantic € 8000
Distance to internet distribution agent 150 km
Legal distance limit per day on each vehicle 400 km

Table 13Purchasing and warehousing
Quarterly cost of purchasing administration € 7,500
Cost of unplanned material purchases spot price plus 10%
Cost of premium materials purchases spot price plus 50%
External storage cost per unit of material € 2.50
External storage cost per component unit € 3.00
Storage cost per product unit at EU agents and internet distributor € 3.50
Storage cost at Nafta distributor $US 4

Table 14 Calculation of average quarterly stocks
0.5 x (opening value + closing value)

Table 15Personnel department costs
  RecruitmentDismissalTraining
Skilled assembly worker € 2000€ 5000€ 8500
Unskilled machinist € 1000€ 2000 n/a
Staff training consultant€ 1000 per day

Table 16 Maximum hours per quarter for each production worker
plus shift pay premiums
Shift level Hours per worker
at basic rate		 Hours per worker
at Saturday rate (basic + 50%)		 Hours per worker
at Sunday rate
(basic + 100%)		 Machinists
shift premium
1. Single420+ 84+ 72 0
2. Double420+ 42+ 721/3
3. Treble420+ 42+ 722/3

Table 17Minimum hours and pay
Unskilled machinist's minimum paid hours per quarter 360
Skilled assembly worker's strike hours per week 48
Skilled assembly worker's minimum hours per quarter nil
Skilled assembly worker's minimum hourly wage rate € 9
Ratio of unskilled : skilled rate of pay 65 %

Table 18 Plant and equipment
Cost per machine (€) 300,000
Rate of depreciation per quarter 2.50 %
Decommissioning charge (€) 60,000

Table 19 Calculation of financial limits
Authorised overdraft limit 50% of property + inventories
plus 90% of trade receivables
less 100% of tax due and trade payables
Borrowing power 50% of (share price x number of shares)
less term loans and bank overdraft limit
Credit-worthiness borrowing power + cash and equivalents
Note: All of these values are taken from last quarter's management report
If any of the limits calculated above are negative, then that limit is set to 0

Table 20 Financial parameters
Credit control cost per unit sold in EU and Nafta € 1
Credit card rate per unit sold for internet sales € 1
Factory fixed expenses per quarter € 20 per sq m
Company tax rate per annum 30 %
Annual interest rates:  (based on the EU base rate announced last quarter)
  Term deposits base rate
  Authorised overdraft base rate plus 4%
  Unauthorised overdraft base rate plus 10%
  Term loans Fixed annual rate of 10%

Table 21 Inventory valuations
Materials stock 90% of the lowest of the spot, 3-month and 6-month prices quoted last quarter (converted into euros),
times the number of units in stock and on order
Component stocks These are valued at purchase cost, the ranges of which are shown in last quarter's management report.
(the actual costs can be derived by interpolation using the percentages of premium materials in each product)
Product stocksFor each product, 110% of the total cost calculated as:
  • The material content, valued as above but adjusted for premium material usage;
  • plus (65% of the basic wage rate + the % shift premium, if any) x 4 times the machining time;
  • plus the basic skilled wage rate times the assembly time for the product
Note: If any product stock is brought forward from the quarter before last, then the valuation will use the weighted average of the opening stocks plus new deliveries.

Table 22 Insurance Options
Insurance Plan NumberPrimary Risk Insurance Premium
0 100 % no insurance
1 0.1 % 0.60 %
2 0.2 % 0.35 %
3 0.3 % 0.20 %
4 0.4 % 0.10 %
Note: The monetary value of the primary risk is calculated as:
the quoted percentage of non-current assets and inventories,
taken from last quarter's balance sheet

Table 23Target customer credit periods
Internet 0 days (credit card)
EU agents 60 days
Nafta distributors 90 days

Table 24 Timing of payments to creditors
EXTERNAL COST ITEMS ONLY

(internal costs and pay omitted)
For goods delivered, or services provided next quarter the charged amount will be paid as follows -
Next quarter Quarter after next
Advertising   100 %
Internet Service Provider 100 %  
Agents and distributors 100 %  
Guarantee servicing   100 %
Web-site development   100 %
Personnel costs 100 % 
Maintenance   100 %
Warehousing costs   100 %
Business intelligence   100 %
Insurance 100 %  
Miscellaneous overheads 100 % 
Materials and components * 50 % 50 %
Hired transport costs   100 %
Capital expenditure 100 %  
Interest (paid or received)100 %  
* All materials and components ordered next quarter will be paid 50% next quarter and 50% in the quarter after next. The second payment will not be affected by any change in the exchange rate in the meanwhile.

Table 25 Website capacity
Note: Demand on your web-site varies from day to day and also from hour to hour.
If you are not able to provide a quick and efficient service to visitors at peak times, your marketing image can decline quite sharply. The capacity of your web-site (measured in visits per hour) depends on the number of ports that you have.
Number of ports in parallel 1 2 5 10 20 50
'Theoretical' capacity 122460120240600
Effective working capacity 2 731 81190537

Table 26 Space requirements
Land utilisation (maximum)80%
Factory space utilisation (maximum)75%
Machining (per machine) 25 sq m
Assembly (per assembly worker)10 sq m
Materials stock (per 1000 units)5 sq m
Work in progress stocks: Product 1Product 2Product 3
(sq m required per product unit) 0.25 0.5 1.0

Table 27 Carbon footprint (CO2e)
Factory heat and light (per sq m ) 50 kWh9.50 kg
Machining (per machine hour) 6 kWh 3.12 kg
Assembly (per skilled hour worked) 1 kWh 0.52 kg