Merloni Elettrodomestici SpA: The Transit Point Experiment 690-003

Exhibit 1 Merloni Elettrodomestici Advertising Theme for Built-In Appliances

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Exhibit 2 Merloni Elettrodomestici Partial Organization Chart, 1986

President
Vittorio Merloni

Vice President Vice President

Sales and Production and
Marketing Technology

Free- Built-In Sales Sales After- Advertising Marketing Purchasing Plant Technology Acco
Standing Sales Europe Overseas Sales Managers
Sales Italy Services
Italy

After Sales Warehousing Logistics & Sales Production Production

Service Distribution Planning Planning Department
Mr. Menichetti

Milano Internal
Warehouse Consultant
Mr. Bosi Dr. Uva
Merloni Elettrodomestici SpA: The Transit Point Experiment 690-003

Exhibit 3 Merloni Group Domestic Plants and Product Lines

Plant Location Product Lines

Merloni Elettrodomestici Acerra Freezers

Albacina Stoves
Bonferraro Dishwashers
Comunanza Washing Machines
Melano Refrigerators

Merloni Igienco Sanitari Arcevia Electrical Components

Borgo Tufico Bathtubs
Cerreto Small Waterheaters
Genga Waterheaters

Merloni Casa Rieti Kitchen Furniture

Exhibit 4 Merloni Elettrodomestici Annual Sales, 1980-1984 (in billions of lire)

Year Domestic Sales Foreign Sales Total Sales

1980 132 166 298

1981 155 237 392
1982 204 270 44
1983 223 298 521
1984 278 348 626

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Exhibit 5 Merloni Elettrodomestici Product Information
Merloni Elettrodomestici SpA: The Transit Point Experiment 690-003

Exhibit 6 Merloni Elettrodomestici Monthly Major Appliance Sales Levels (in thousands of units)
FREESTANDING PRODUCTS
Average of All Cucine Frigoriferi
Free Standing Products (Stoves) (Refrigerators)

Congelatori Lavabiancheria Lavastoviglie

(Freezers) (Washing Machines) (Dishwashers)

BUILT-IN-PRODUCTS
Average of All Cucine Frigoriferi
Built-In Products (Stoves) (Refrigerators)

Congelatori Lavabiancheria Lavastoviglie

(Freezers) (Washing Machines) (Dishwashers)

1987 Forecast ——— Average 1985-1986 (Est.) ––––

Note: The sharp decline in sales during the month of August reflects the fact that most retail stores in Italy close during
August for the summer holiday.

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690-003 Merloni Elettrodomestici SpA: The Transit Point Experiment

Exhibit 7 Merloni Elettrodomestici Italian Plants and Warehouses

Scale of Kilometers

0 100 200 300

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Merloni Elettrodomestici SpA: The Transit Point Experiment 690-003

Exhibit 8 Merloni Demand and Inventory Data for Freestanding Products (in units)

8a. Regional Warehouse Demand and Inventory Data (by Region)

Average
Daily
Total % Demand Demand
Average Served Served Average
Daily from from Inventory
Washing Demand Regional Regional in Regional
Region Stoves Refrigerators Freezers Machines Dishwashers in Region Warehousea Warehouse Warehouse

Ancona 17.4 19.7 9.5 25.5 2.9 75.0 100% 75.0 350
Bari 46.9 45.1 7.7 63.3 2.3 165.3 60% 99.2 950
Bologna 23.4 25.8 6.9 32.2 2.8 91.1 76% 69.2 670
Bolzano 7.6 8.3 3.5 9.8 0.8 30.0 92% 27.6 640
Cagliari 19.6 15.4 7.8 25.1 1.8 69.7 86% 59.9 750
Catania 15.3 23.2 6.9 46.1 1.9 93.4 57% 53.2 1,050
Catanzaro 13.4 13.1 8.4 28.6 1.7 65.2 90% 58.7 780
Firenze 23.9 31.5 7.4 41.0 5.1 108.9 62% 67.5 620
Genova 15.9 19.1 3.0 22.1 2.7 62.8 92% 57.8 450
Milano 35.4 63.6 11.6 87.3 5.6 203.5 55% 111.9 1,200
Napoli 55.8 40.5 16.9 67.7 2.2 183.1 42% 76.9 1,200
Padova 21.3 24.8 8.2 42.2 3.1 99.6 59% 58.8 820
Palermo 21.3 26.3 7.9 41.6 1.5 98.6 46% 45.4 1,200
Pescara 16.2 16.5 8.7 22.7 1.1 65.2 93% 60.6 450
Roma 30.6 48.6 13.0 66.9 5.6 164.7 94% 154.8 1,200
Torino 14.8 32.6 5.9 33.3 2.2 88.8 76% 67.5 1,050
Udine 4.7 7.1 1.2 7.9 0.8 21.7 98% 21.3 950
Total 383.5 461.2 134.5 663.3 44.1 1,686.6 69.1%b 1,165.3 14,330

aThe remaining products were sent (in truckload quantities) from the central warehouse directly to customers.

bWeighted average.

8b. Inventory Data (in Plants and in Central Warehouse, in units)

Inventory in Central
Product Type Plant Location Inventory in Plant Warehouse

Stoves Albacina 8,557 14,094

Refrigerators Acerra 3,567 14,300
Freezers Melano 940 6,033
Washing Machines Comunanza 4,480 7,830
Dishwashers Bonferraro 3,506 1,996
Total 21,050 44,253

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690-003 Merloni Elettrodomestici SpA: The Transit Point Experiment

Exhibit 9 Merloni Elettrodomestici Truck Capacities

Small Trucka Tractor-Trailer

Washing Machines 76 152

Dishwashers 60 112

Stoves 45 110

Refrigerators 50 100

Freezers 36 88

Mixed 45 120

aSmall truck single-product capacities were calculated by Mr. Menichetti’s staff for use in assessing
alternative distribution practices.

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Merloni Elettrodomestici SpA: The Transit Point Experiment 690-003

Exhibit 10 Merloni Elettrodomestici Representative Urban and Rural

Regional Warehouse Costs

Roma

Line Items

Operating Costsa 3,605 Lire/Piece/Month

Inventory Costsb 1,035 Lire/Piece/Month
Short-Haul Transportation Costs 4,300 Lire/Piece

Catanzaro

Line Items

Operating Costsa 3,324 Lire/Piece/Month

Inventory Costsb 1,721 Lire/Piece/Month
Short-Haul Transportation Costs 4,700 Lire/Piece/Month

aLease, utilities and labor.

bFinancial costs.

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690-003 Merloni Elettrodomestici SpA: The Transit Point Experiment

Exhibit 11 Merloni Elettrodomestici Long-Haul Transportation Costsa (in millions of lire)

(Millions)
TARIFF

aLong-haul transportation costs for small trucks were gathered by Mr. Menichetti’s staff for use in assessing alternative
distribution practices.

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Merloni Elettrodomestici SpA: The Transit Point Experiment 690-003

Exhibit 12 Merloni Elettrodomestici Transit Point Configuration

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