With a maximum plant warehouse capacity of 900,000 we feel it would be beneficial to stock our warehouse to max capacity for

the launch to ensure product is available and ready to reach the customer within the required time frame. We do not feel at this time that we will need to purchase extra warehousing as the cost to value ratio for the launch does not seem profitable. We are unsure of the demand for the product launch, but will go with max warehouse capacity with the option to purchase more space to hold extra product if needed in the future. If 90,000 parts weigh 45,000lbs this would mean that each completed game should weight 4lbs. With an exact number of how many trucks went to each customer and the weight each truck would carry we could determine the necessary amount almost exactly, however we do not have information necessary to properly forecast the demand. We do know that each skid will hold 562.5 games. 1) For the initial product launch we have selected to purchase parts from Mexico. This is the cheapest choice that still allows the products to be made and distributed in time. For 900,000 pieces it will cost $3,195,000 from Mexico. The lead time is 4 weeks which will leave us 12 weeks to produce the games. With a production time of 9,000 packages every 4 hours we will need 400 hours to turn all the pieces into finished games. In order to produces them all we will need 16.67 full 24 hour days or close to 4 weeks. With the lead and production time in consideration, this will leave us with approximately 8 weeks to distribute the goods to all of our consumers. 2) For long term production we will obtain our product from China. While the lead time is high, with our initial batch in warehouse we have some extra time to absorb the 3 month shipping and pre order in advanced for the future. China is the most cost efficient choice for supplying the product costing only $1,865,000 for 900,000 pieces.

China- (90,000X$2+$6,500)10 cans/parts packages = $1,865,000 Lead time- 3 months Mexico- (90,000X$3.50+$4,500)10 cans/parts packages =$3,195,000 Lead time-4 weeks Chicago-(100,000X$6+1,450)9 cans/parts packages = $5,413,050 Lead time- Overnight Kansas-(100,000X$4.50+$1,700)9 cans/parts packages= $4,065,300 Lead time- 1week for every 10,000 + 3days for delivery