Three Jay's Corporation

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Exhibit 3: Product Cost and Price Data Summary (dollars per case)

Strawberry Raspberry
Products Jam Jelly Peach Jam
Wholesale/Case (12) 32.45 35.40 31.26
Materials - Food Cost 15.92 18.10 14.44
Materials - Packaging (Jars) 6.60 6.60 6.60
Materials - Packaging (Carton) 0.53 0.53 0.53
Labor Cost 1.29 1.29 1.29
Variable Overhead 1.45 1.45 1.45
Total Variable Costs 25.79 27.97 24.31
Contribution to Overhead & Profit 6.66 7.43 6.95
Fixed Overhead Costs 2.55 2.55 2.55
Full Costs 28.34 30.52 26.86
Profit 4.11 4.88 4.40
Apple/Mint
Bluberry Jam Jelly
32.76 29.75
16.59 13.90
6.60 6.60
0.53 0.53
1.29 1.29
1.45 1.45
26.46 23.77
6.30 5.98
2.55 2.55
29.01 26.32
3.75 3.43
Exhibit 4: EOQ and ROP Calculation Using Existing Method

Total Set Annual %


Up Cost Demand Carrying Unit Cost ( EOQ
12 ounce Jar (S)* (D)** Cost (i) C )*** (Cases)
Strawberry Jam 63.70 2,993 9% 28.34 387
Raspberry Jelly 63.70 2,335 9% 30.52 329
Peach Jam 63.70 1,492 9% 26.86 280
Blueberry Jam 63.70 886 9% 29.01 208
Apple/Mint Jelly 63.70 625 9% 26.32 183

*= 5.75+30.25+4.70+23.50 (from Exhibit 3)


** 2010 Annual Demand
***Full cost from Exhibit 4
ROP
(Cases)
173
135
86
51
36
Exhibit 5: Monthly Sales Data

Label Type Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Year Total
3Js Strawberry Jam
2012 345 301 325 299 344 296 329 334 349 325 289 333 3,869
2013 566 671 384 631 616 2,868

Marran Markets Raspberry Jelly


2012 229 270 236 279 273 255 236 232 235 276 244 241 3,006
2013 744 737 425 379 571 2,856

Kerry's Marts Peach Jam


2012 156 176 174 144 160 178 155 159 178 166 176 148 1,970
2013 167 146 78 84 117 592

Dom's Food Stores Blueberry Jam


2012 92 109 98 99 102 111 103 99 94 104 107 93 1,211
2013 100 99 80 139 108 526

AAA Grocers Apple/Mint Jelly


2012 66 77 79 69 65 66 68 67 62 74 71 68 832
2013 73 63 110 146 88 480
EOQ and ROP Calculation Using Existing Method for 2012
Total Set Annual %
Carrying Unit( CCost EOQ ROP
12 ounce Jar Up Cost Demand ) (Cases) (Cases)
(S) (D) Cost (i)
Strawberry Jam 63.70 3,869 9% 28.34 440 223
Raspberry Jelly 63.70 3,006 9% 30.52 373 173
Peach Jam 63.70 1,970 9% 26.86 322 114
Blueberry Jam 63.70 1,211 9% 29.01 243 70
Apple/Mint Jelly 63.70 832 9% 26.32 212 48
Annual Annual Increase in
12 ounce Jar EOQ(2010)
Demand(2010) Demand(2012) Demand(%)
Strawberry Jam 2993 3,869 29.27% 387
Raspberry Jelly 2335 3,006 28.74% 329
Peach Jam 1492 1,970 32.04% 280
Blueberry Jam 886 1,211 36.68% 208
Apple/Mint Jelly 625 832 33.12% 183

Last month demand No. of Cases to be Safety Stock


12 ounce Jar Inventory
(May) Produced (June)
Strawberry Jam 616 134 750 268
Raspberry Jelly 571 76 670 175
Peach Jam 117 98 75 56
Blueberry Jam 108 55 110 57
Apple/Mint Jelly 88 39 100 51
Increase in Increase in
EOQ(2012) ROP(2010) ROP(2012)
EOQ(%) ROP(%)
440 13.70% 173 223 29.27%
373 13.46% 135 173 28.74%
322 14.91% 86 114 32.04%
243 16.91% 51 70 36.68%
212 15.38% 36 48 33.12%
Old vs New Cost Structure
Setup Setup Cost
Old $ 63.70
New $ 37.50
New Cost Structure
Penalty Cost Inventory Carrying Cost
0.09
X 0.29

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