• The percentage of superior materials to be used in making-private-label shoes—There’s merit in
keeping this percentage as low as possible, subject to achieving the required S/Q rating.
• Expenditures for enhanced styling/features—Again, there’s merit in minimizing this expense, but
enough has to be spent, in tandem with superior materials usage, to achieve the required S/Q rating. It
is possible that it will be more economical to increase spending for TQM/Six Sigma programs (entered
on the branded production screen) to help get to the required S/Q rating than to spend more heavily for
superior materials or enhanced styling features.
• The tentative number of private-label pairs to be produced at regular time—Any plant capacity not used
for branded footwear production can be allocated to private-label production. All or part of the tentative
private-label production will not actually take place, however, unless the company wins sufficient bids
in the geographic region where you propose to ship the pairs.
• The tentative number of private-label pairs to be produced at overtime—Once plant capacity is
reached, all additional production involves paying workers overtime at the rate of 1½ times the regular
base pay. Overtime production will not occur to the extent that the company loses out in the bidding
process.
• The proposed shipments from a plant to each of the four geographic areas—These shipments will take
place only if you win enough contracts. Production and shipment of private-label footwear occurs
only in the event bids are won. However, the proposed volumes shipped to each geographic area,
all plants combined, represent firm commitments of the number of pairs you are willing to make
available to chain retailers in that region and are thus the maximum number of private-label pairs you
can hope to sell in that region.