Business News Period 1:

TOPSIM - Manufacturing Management 6 Periods 4.3

General Economic Situation

All things considered, the German economy is doing well and experts believe this won’t change in the next few years. Driven by the bright economic
outlook, many companies increase their investment levels in order to raise their sales potential. Thanks to this, the unemployment rate declines and the
wage level rises. This year, Germany’s GDP is expected to grow at 2.8% and investments at 3%.

Industry News
Evaluation of Markets
The good economic situation becomes especially apparent in the sporting and leisure goods industry. Thanks to the low unemployment rate und
increasing wage levels, consumers can put money aside and spend more money on sporting and leisure goods. Demand for bicycles is expected to
grow at 6% compared to the previous year.

Additional business with the bike bulk buyer “Biko” is possible. Biko is interested in buying up to 2,000 CityBikes for 330 EUR each. These bikes will be
sold under the bulk buyer’s brand and are not seen as competitors to your own market. Biko offers to take over all delivery costs.

Negotiations with the Workers’ Council

Your workers’ council reminds you that the last salary adjustment was some years ago, and demands an increase of 5% to allow your employees to
profit from the current economic upturn. Negotiations have been intense but you agreed to a pay raise of 2.5%. This new labor contract is valid for 2
years.

Procurement Markets
Your production line manufacturer lets you know that the type A line was relaunched. Its environmental sustainability index is now higher and other
fixed costs are lower. However, the capacity is lower, too. In addition, the line manufacturer has been working on two new line types: B and C. They are
designed to better fit the various needs of different bicycle manufacturers.

You receive the following overview about the 3 production lines:

Overview Production Line

Type
Unit Line Type A Line Type B Line Type C
Purchasing Price EUR 1,600,000 1,000,000 650,000
Operating Time Periods 12 10 8
Capacity Units 12,000 8,000 6,000
Other Fixed Costs EUR 20,000 10,000 7,000
Environmental Index Points 55 65 80
Residual Proceeds % of Residual Book Value 30 50 10

The new production lines surpass the original market expectations. Due to the high demand, your manufacturer is not able to produce more than two
lines per type for you.

The maintenance costs for all types of production lines are 40,000 EUR per period and production line.

Your supplier suffers from increasing labor costs and, in turn, raises the prices for input materials by approximately 2.7%.

- Page 1 Copyright (c) by TOPSIM GmbH

 Business News Period 1:
TOPSIM - Manufacturing Management 6 Periods 4.3

Purchase of Input Materials

Quantity Scale Unit Period 0 Period 1
0 to 25,999 units EUR/Unit 200 205
26,000 to 31,999 units EUR/Unit 193 198
32,000 to 37,999 units EUR/Unit 185 190
38,000 units and up EUR/Unit 178 183
Just-in-Time EUR/Unit 215 220

New Data for Period 1

Bulk Buyer
Unit Period 0 Period 1
Maximum Amount Units 2,000
Price EUR/Unit 330

Wages/Salaries
Unit Period 0 Period 1
Purchasing EUR 48,000 49,200
Production EUR 45,000 46,125
Sales EUR 50,000 51,250
R&D EUR 66,000 67,650
Administration EUR 48,000 49,200

Other Data
Unit Period 0 Period 1
Energy Costs per CityBike EUR 10 11
Interest Rate Overdraft Loan % p.a. 14
Interest Rate Short-Term Loan % p.a. 9

- Page 2 Copyright (c) by TOPSIM GmbH