Percentage of superior material 55%
Number of models 250
Enhanced styling and feature $12/$14
TQM/six sigma quality $1.00
S/Q rating for standard pairs produced 5 stars (let’s not go for more or less)
Annual wages Be the same (+1%)
Incentive pay $1.30 (N-A), 0.70 (A-P)
Training $1300 (N-A), $700 (A-P)
Branded pairs to be manufactured in year 11 (not sure)
Reasons
Percentage of superior material- The going market price of superior (or standard) materials will rise 2% above the base for each 1% that worldwide use of superior (or standard) materials exceeds 50%. Simultaneously, the global market price of standard (or superior) materials will fall 0.5% for each 1% that the global usage of standard (or superior) materials falls below 50%. Thus, worldwide materials usage of 60% superior materials and 40% standard materials will result in a global market price for superior materials that is 20% above the prevailing $12 base price for superior materials and a global market price for standard materials that is 5% below the prevailing $6 base price for standard materials. Similarly, worldwide usage of 55% standard materials and 45% superior materials will result in a global market price for standard materials that is 10% above the $6 base price and a global market price for superior materials that is 2.5% below the prevailing $12 base.(seems to be good option because we decided to produce superior quality footwear but we still have to consider market price of material and obviously we can’t really go for too expensive one otherwise we will be struggling in setting price, as we can’t just straight away set high price for product) In other words, greater than 50% usage of superior materials widens the price gap between superior and standard materials, and greater than 50% usage of standard materials narrows the price gap
Number of models- increased so that we can offer variety not same products selling every year.
Incentives and training- again important to increase productivity and reduce rejected pieces. Training production workers in the use of best practice procedures at each step of the manufacturing process has recently become important to minimizing the reject rates on pairs produced. (This is just as per my understanding ….You are always more than welcome to criticise my opinion………because we need to choose best option )
For biding we can definitely go for Ronaldo assigning for 5 years in (4-6)m bid
