This document proposes options to reduce costs and increase productivity at a copy center. It summarizes the current situation of overcapacity, high utilization rates, and a manual ordering process. It then outlines goals like reducing expenses, improving workflow and communication. Specific proposals are made to reduce vended jobs and costs through a web-based print-on-demand system to replace bulk literature printing, fulfill orders on demand and eliminate obsolete inventory. Projected savings and ROI are provided showing costs recouped within 8 months.

1. Xerox Copy Center Renewal
Proposal
Presentation
Proposed Options
Mark Pudlitzke
November 05, 2004

2. Goal and Objective
• Reduce overall document management expenses.
• Reduce number of off-site vended jobs.
• Anticipate and Plan for future growth
• Improve performance in production center.
• Improve overall cycle time (work-flow)/tracking
process.
• Improve communication to Honeywell on print job
status and turn around time (TAT) of high priority,
time sensitive jobs.
Reduce overall costs while increasing productivity
2 File Number-

3. Today’s Situation
• Over Capacity and Increased costs.
- DC6060P color equipment is at 247% Utilization
- Without adding new equipment, level of vended jobs will
remain high for color print.
- Vended color jobs would add an additional 1224% utilization
rate to the DC6060P if included with the Copy Center jobs.
- Lean Document Production (LDP) study found up to 63 jobs
in WIP at any given time.
• Limited In-House Capabilities.
- 40% of Production Staff were over 100% Utilization.
- LDP showed there was as many as 301 jobs representing 50
job types.
 (Over time period of Mar 26-04 to Apr 27-04)
• Manual Order, Fulfillment, and Tracking process.
Reduce overall costs while increasing productivity
3 File Number-

4. How Did We Get Here?
• Right Sized operation March 2003 per current
black&white/color volumes.
- Annual spend reduction of $500,000.
• Indirect Sourcing lead brought color volume in
house to recognize cost savings.
Reduce overall costs while increasing productivity
4 File Number-

5. Monthly YTD vended color print demand
Monthly Summary of Off site Color Impression Processing by Xerox
By Month of Year
Jan 04 Sum of Impressions Apr 04 Sum of Impressions
Requestor Total % total Requestor Total % total
Georgia Thomas 130,090 89.4% Georgia Thomas 649,320 70.9%
Justin McCurnin 12,100 8.3% Justin McCurnin 266,000 29.1%
Kathy Cullen 1,600 1.1% Grand Total 915,320 100.0%
Requestor 1,200 0.8%
Audra Biesterfeld 560 0.4%
Audra / Georgia 25 0.0% May 04 Sum of Impressions
Grand Total 145,575 100.0% Requestor Total % total
Camille Gallagher 322,900 47.1%
Georgia Thomas 314,000 45.8%
Feb 04 Sum of Impressions Shari Paul 24,000 3.5%
Requestor Total % total Audra Biesterfeld 24,000 3.5%
Sally Spires 34,000 32.3% Grand Total 684,900 100.0%
(blank) 17,610 16.7%
Shari Paul 17,400 16.5% Jun 04 Sum of Impressions
Pam Enstad 16,000 15.2% Requestor Total % total
Georgia Thomas 14,200 13.5% Georgia Thomas 328,000 40.5%
Kathy Cullen 5,600 5.3% Jim Cordaro 210,000 25.9%
Audra Biesterfeld 500 0.5% Audra Biesterfeld 139,000 17.2%
Grand Total 105,310 100.0% Camille Gallagher 54,600 6.7%
Regina LeMere 40,450 5.0%
Shari Paul 24,000 3.0%
Mar 04 Sum of Impressions David Stacey 12,000 1.5%
Requestor Total % total Linda DeFranco 1,208 0.1%
Georgia Thomas 581,600 69.0% Grand Total 809,258 100.0%
Audra Biesterfeld 122,080 14.5%
Justin McCurnin 90,000 10.7%
Shari Paul 49,000 5.8%
Grand Total 842,680 100.0%
Reduce overall costs while increasing productivity
5 File Number-

6. MARCOMM 2004 Initiative of Web based POD
• Current Situation:
- Literature printed in mass quantities to reach price point.
 (2-5 year supplies)
- Planning Process:
 Literature printed, shipped to LDC, stored @ LDC, ordered, packaged
@ LDC, shipped to customer.
 6 steps- (2 week lead time)
- Cost of $66,000 a year in pick charges.
 $2.75 pick/pack charge per literature fulfillment order. (any quantity)
- Collateral deliveries often damaged.
- Homes-only literature: $715,000 in LDC inventory.
 Of which 35% is obsolete. (Revision changes and outdated)
- Current literature inventory takes up entire row/column at
the LDC today.
Reduce overall costs while increasing productivity
6 File Number-

7. MARCOMM 2004 Initiative of Web based POD
• Goals:
- Reduce investments in:
 literature administration,
 printing,
 storage,
 fulfillment,
 shipping/handling
 waste.
- Improve cycle time and cost per order.
- Increase level of service and capabilities to customer.
- Turn printing into a profit center via the merchant account
process.
- Reduce administrative involvement.
- Change from a Push to Pull Demand Replenishment System.
- Elimination of the clerical management of literature in
Customer Care database.
Reduce overall costs while increasing productivity
7 File Number-

8. MARCOMM Requirements & POD ROI
BENEFIT 1 2 3 4
Revenue Increase
Increas ed revenue per s ales rep
(contractor, dis tributor, internal)
Increas ed S ales rep. retention
Cycle time improvement (Time To M arket)
Total Revenue Increase $0.00 $0.00 $0.00 $0.00
Cost Reduction
Outs ide Print reduction $297,416.25 $297,416.25 $297,416.25 $297,416.25
Dis tribution reduction
Order proces s ing reduction(Admin) $0.00 $0.00 $0.00 $0.00
M arketing M anagement coordination
reduction $0.00 $0.00 $0.00 $0.00
Avg. Reduction in was te from obs oles cence $29,741.63 $29,741.63 $29,741.63 $29,741.63
LDC line (order) charge (S torage and
inventory reduction) $65,755.25 $65,755.25 $65,755.25 $65,755.25
Total Cost Reduction $392,913.13 $392,913.13 $392,913.13 $392,913.13
TOTAL BENEFIT $392,913.13 $392,913.13 $392,913.13 $392,913.13
Y ear
COST 1 2 3 4
Development $25,000.00 $0.00 $0.00 $0.00
Hos ting Fee $34,879.44 $34,879.44 $34,879.44 $34,879.44
On S ite Print Center Dis tribution Charges
On S ite Print Center Click Charges $225,376.00 $176,466.98 $176,466.98 $176,466.98
TOTAL COST $250,376.00 $176,466.98 $176,466.98 $176,466.98
GAIN / LOSS - Realized per Y ear $142,537.13 $216,446.15 $216,446.15 $216,446.15
GAIN / LOSS - Cummulative $142,537.13 $358,983.28 $575,429.43 $791,875.58
Months to obtain return on investment 8
Reduce overall costs while increasing productivity
8 File Number-

9. MARCOMM Requirements & Merchant Account
Estimated Monthly Chargeable Volume to Users
218,952 x $.13 = $28,463.76
(Includes contractors and distributors)
Estimated Monthly Chargeable Volume to Marcomm
218,952 x $.062 = $13,575.02
(Includes contractors and distributors)
Estimated Monthly revenue
$14,888.74
Estimated Annual revenue
$178,664.88
Reduce overall costs while increasing productivity
9 File Number-

10. MARCOMM Requirements & POD ROI
Volum e Validation
1 million impressions
Probability 90%- 95%
Elements of 1 million
Print Volume 50% LDC
35% Marcomm
Launch's. (New
products, Trade
Show s)
15% Of f ice (Misc)
Additional Volum e
(M arcom m ) Product Launch 15% 45,000
Trade Show s 10% 30,000
Direct Mail 5% 15,000
AD-Slicks 15% 45,000
Brochures 30% 90,000
Sale Sheets 20% 60,000
Tech Pubs 5% 15,000
100% 300,000
Reduce overall costs while increasing productivity
10 File Number- 1

11. MARCOMM Requirements & POD ROI
Document Advisor Office Sponsor: Dan Harrison
ACS current Annual spend = $10 Million. Xerox Guaranteed savings of 10-25%
POD/DIGITAL DOCUMENTS
WAREHOUSE DOCUMENT
FORMS DESIGN &
DATA COPY COMMERCIAL
& CENTER CENTER OFFICE
RE-DESIGN FLEET PRINT
DISTRIBUTION TRANSACTION
PRODUCTION
 Documentation  Inventory  E-Forms &  Statement / Invoice Printing  Purchase &
and Manuals Management I-Form Design Source
 Policy Printing
 Envelopes
 Internal and  Kiting  POD
 Personalized/ 1:1
External Forms  Posters
 Inventory  Imaging
 Electronic Kiting
Reporting  Brochures
 Translation
 Production Optimization
 Document  Direct Mail
 Scanning
Usage Data  Lean Document Production
 Digital  Offset/ Web/
 Documentation & Manual LetterPress and
Archiving
Production Digital Press
Reduce overall costs while increasing productivity
11 File Number- 1

12. Available Options
• Option 1 (Renewal) iGen3 & 3 x 5 Labor
- Maximum Cost Savings ($412,411) over the 3 year period.
- Digitalization (Hardware/ Software Upgrades)
- Satisfies current volume requirements and positions for future
growth.
 iGen3 capable of supporting monthly volumes from 200,000
impressions per month to and exceeding 1.2 million prints per month.
- Co-Terminous with current production color configuration,
including ECC Marcomm web based solution.
- This option does meet the requirements outlined in the Lean Six
Sigma “Voice of the Customer”
- See Projected Cash flow expenditure worksheet for detail
validation.
Reduce overall costs while increasing productivity
12 File Number- 1

13. Option 1 Cash Flow
Project Cash Flow Analysis iGen Renewal+Labor 3X5
Term: 36 Months Coterminous with other contracts come Due Sept 2007
6060 6060 6060 iGen
Print Center Capacity level of 1.5 x 5 1.5 x 5 1.5 x 5 3x5 Yr 2004 Yr 2005 Yr 2006 Yr 2007
80% Jun-04 Jul-04 Aug-04 Sept-04 (7 Mon) (12 Mon) (12 Mon) ( 9 Mon)
Monthly Fixed Costs Actual Projected Projected Projected Projected Projected Projected Projected
70005 39 B/W Equip (Min) $ 27,525 $ 27,525 $ 27,525 $ 26,525 $ 188,677 $ 318,304 $ 318,304 $ 238,728
70005 39 Labor (Min) $ 39,927 $ 42,235 $ 42,235 $ 55,120 $ 344,877 $ 661,440 $ 661,440 $ 496,080
Color Equip 6060 (Min)
70065 05 w /bookletmaker $ 10,450 $ 10,450 $ 10,450 $ 10,450 $ 73,150 $ 125,400 $ 125,400 $ 94,050
N ew iGen Color Equipment $ 49,361 $ 197,444 $ 592,332 $ 592,332 $ 444,249
Sub-Total (Fixed Cos t) $ 77,902 $ 80,210 $ 80,210 $ 141,456 $ 804,148 $ 1,697,476 $ 1,697,476 $ 1,273,107
Variable Cost
* B/W Impress count 916,760 1,111,646 1,111,646 1,111,646 7,586,636 13,339,752 13,339,752 10,004,814
* Color Impress count 958,632 1,000,000 1,000,000 1,000,000 6,958,632 12,000,000 12,000,000 9,000,000
B/W Impression $.0037
(Min 1.2M) $ - $ - $ - $ - $ - $ - $ - $ -
B/W Impression on
Color Machine $.020 $ 23 $ 26 $ 26 $ 26 $ 179 $ 312 $ 312 $ 234
New Color
Impression Color Impression Current
$.062 (In House) $.089 (In House) $ 13,294 $ 17,800 $ 17,800 $ 24,800 $ 151,694 $ 312,000 $ 312,000 $ 234,000
New Color
Impression
$.062 (Vended Color Impression Current
Outside) $.089 (Vended Outside) $ 72,024 $ 71,200 $ 71,200 $ 6,200 $ 240,124 $ 78,000 $ 78,000 $ 58,500
Misc chgs Vended Jobs $ 834 $ 12,202 $ 12,202 $ 500 $ 27,238 $ 6,000 $ 6,000 $ 4,500
Sub-Total (Variable Cos t) $ 86,176 $ 101,228 $ 101,228 $ 31,526 $ 419,236 $ 396,312 $ 396,312 $ 297,234
Supplies In House $ 10,278 $ 10,278 $ 10,278 $ 31,738 $ 157,785 $ 380,856 $ 380,856 $ 285,642
Supplies Vended $ 29,738 $ 29,738 $ 29,738 $ 5,278 $ 110,326 $ 63,336 $ 63,336 $ 47,502
Sub-Total (Supply Cos ts) $ 40,016 $ 40,016 $ 40,016 $ 37,016 $ 268,112 $ 444,192 $ 444,192 $ 333,144
Add iGen/ Labor
(3 shif ts x 5 days)
Cotermious Grand Total Sum m ary $ 204,093 $ 221,454 $ 221,454 $ 209,998 $ 1,491,495 $ 2,537,980 $ 2,537,980 $ 1,903,485
No Change to Equip
& Labor Grand Total Sum m ary $ 204,093 $ 221,454 $ 221,454 $ 221,454 $ 1,532,818 $ 2,672,096 $ 2,702,235 $ 2,038,297
Cost Savings Comparison to Existing Contract $ (11,456) $ (41,323) $ (134,116) $ (164,256) $ (134,812)
Annual Cost Savings over Current Contract x 12 months (137,470)
Cost Savings Comparison to Existing Contract x 36 months (412,411)
Cost savings greater because
current contract has labor escalator.
13 File Number- 1

14. Available Options
• Option 2 (iGen3 Add Only)
- Cost Savings ($135,535) over the 3 year period.
- Digitalization (Hardware/ Software Upgrades)
- Satisfies current volume requirements and positions for future
growth.
- Co-Terminous with current production color configuration,
including ECC Marcomm web based solution.
- This option does meet the requirements outlined in the Lean Six
Sigma “Voice of the Customer”
- See Projected Cash flow expenditure worksheet for detail
validation.
Reduce overall costs while increasing productivity
14 File Number- 1

15. Option 2 Cash Flow
Project Cash Flow Analysis iGen+ 3 x 5 Add on
36 Month Separate add-on Contract
6060 iGen Only
1.5 x 5 3x 5
Print Center Capacity level of
80% Jun-04 Jul-04 Aug-04 Sept-04 Yr 2004 Yr 2005 Yr 2006 Yr 2007
Monthly Fixed Costs Actual Projected Projected Projected Projected Projected Projected Projected
7000539 B/W Equip (Min) $ 27,525 $ 27,525 $ 27,525 $ 26,525 $ 188,677 $ 318,304 $ 318,304 $ 238,728
7000539 Labor (Min) $ 39,927 $ 42,235 $ 42,235 $ 56,611 $ 350,841 $ 679,332 $ 679,332 $ 509,499
Color Equip 6060 (Min)
7006505 w /bookletmaker $ 10,450 $ 10,450 $ 10,450 $ 10,450 $ 73,150 $ 125,400 $ 125,400 $ 94,050
N ew iGen Color Equipment $ 49,361 $ 197,444 $ 592,332 $ 592,332 $ 444,249
Sub-Total (Fixed Cos t) $ 77,902 $ 80,210 $ 80,210 $ 142,947 $ 810,112 $ 1,715,368 $ 1,715,368 $ 842,277
Variable Cost
* B/W Impress count 916,760 1,111,646 1,111,646 1,111,646 7,586,636 13,339,752 13,339,752 10,004,814
* Color Impress count 958,632 1,000,000 1,000,000 1,000,000 6,958,632 12,000,000 12,000,000 9,000,000
B/W Impression $.0037
(Min 1.2M) $ - $ - $ - $ - $ - $ - $ - $ -
B/W Impression on Color
Machine $.020 $ 23 $ 26 $ 26 $ 26 $ 179 $ 312 $ 312 $ 234
N e w p ric in g
$ .062 with
500K m in Color Impression
in c l d e d
u $.089 (In House) $ 13,294 $ 17,800 $ 17,800 $ 18,600 $ 123,294 $ 223,200 $ 223,200 $ 167,400
N e w p ric in g
$ .062 with
500K m in Color Impression
in c l d e d
u $.089 (Vended) $ 72,024 $ 71,200 $ 71,200 $ 18,600 $ 288,824 $ 223,200 $ 223,200 $ 167,400
Misc chgs Vended Jobs $ 834 $ 12,202 $ 12,202 $ 500 $ 27,238 $ 6,000 $ 6,000 $ 4,500
Sub-Total (Variable Cos t) $ 86,176 $ 101,228 $ 101,228 $ 37,726 $ 439,536 $ 452,712 $ 452,712 $ 339,534
Supplies In House $ 10,278 $ 10,278 $ 10,278 $ 31,738 $ 157,785 $ 380,856 $ 380,856 $ 285,642
Supplies Vended $ 29,738 $ 29,738 $ 29,738 $ 5,278 $ 110,326 $ 63,336 $ 63,336 $ 47,502
Sub-Total (Supply Cos ts ) $ 40,016 $ 40,016 $ 40,016 $ 37,016 $ 268,112 $ 444,192 $ 444,192 $ 333,144
Grand Total $ 204,093 $ 221,454 $ 221,454 $ 217,689 $ 1,517,759 $ 2,612,272 $ 2,612,272 $ 1,959,204
No Change
to Equip &
Labor Grand Total Sum m ary $ 204,093 $ 221,454 $ 221,454 $ 221,454 $ 1,532,818 $ 2,672,096 $ 2,702,235 $ 2,038,297
Cost Savings Comparison to Existing Contract $ (3,765) $ (15,059) $ (59,824) $ (89,964) $ (79,093)
Annual Cost Savings over current Contract x 12 Mon (45,178)
Cost Savings over Term Contract Cotermious x 36 Mon (135,535)
15 File Number- 1

16. Available Options
• Option 3 (6060 Equipment & 3 x 5 Labor)
- Cost Increase $84,805 over the 3 year period.
- Limited increase in capacity.
- This option does not meet the current volume capacity
requirements due to technological limitations.
- This option does not meet the Lean Six Sigma “Voice of the
Customer”.
- See Projected Cash flow expenditure worksheet for detail
validation.
Reduce overall costs while increasing productivity
16 File Number- 1

17. Option 3 Cash Flow
Project Cash Flow Analysis with 6060+ 3X5 Labor Add on
36 Month Separate add-on Contract
6060 6060 Only
Print Center Capacity over 1.5 x 5 3 x 7 Yr 2004 Yr 2005 Yr 2006 Yr 2007
100% Jun-04 Jul-04 Aug-04 Sept-04 (7 Mon) (12 Mon) (12 Mon) (9 Mon)
Monthly Fixed Costs Actual Projected Projected Projected Projected Projected Projected Projected
70005 39 B/W Equip (Min) $ 27,525 $ 27,525 $ 27,525 $ 26,525 $ 188,676 $ 318,300 $ 318,300 $ 238,725
70005 39 Labor (Min) $ 39,927 $ 42,235 $ 42,235 $ 56,611 $ 378,939 $ 791,724 $ 791,724 $ 593,793
Color Equip 6060 (Min)
70065 05 w /bookletmaker $ 10,450 $ 10,450 $ 10,450 $ 45,962 $ 215,198 $ 551,544 $ 551,544 $ 413,658
New New 6060 Equipment $ 10,450 $ 41,800 $ 125,400 $ 125,400 $ 94,050
Sub-Total (Fixed Cos t) $ 77,902 $ 80,210 $ 80,210 $ 140,548 $ 828,613 $ 1,798,968 $ 1,798,968 $ 1,349,226
Variable Cost
* B/W Impress count 916,760 1,111,646 1,111,646 1,111,646 7,586,636 13,339,752 13,339,752 10,004,814
* Color Impress count 958,632 1,000,000 1,000,000 1,000,000 6,958,632 12,000,000 12,000,000 9,000,000
B/W Impression $.0037
(Min 1.2M) $ - $ - $ - $ - $ - $ - $ - $ -
B/W Impression on Color
Machine $.020 $ 23 $ 26 $ 26 $ 26 $ 179 $ 312 $ 312 $ 234
N e w p ric in g
$ .062 with
5 00K m in Color Impression
in c l d e d
u $.089 (In House) $ 13,294 $ 17,800 $ 17,800 $ 12,400 $ 135,694 $ 297,600 $ 297,600 $ 223,200
N e w p ric in g
$ .062 with
5 00K m in Color Impression
in c l d e d
u $.089 (Vended) $ 72,024 $ 71,200 $ 71,200 $ 18,600 $ 251,624 $ 74,400 $ 74,400 $ 55,800
Misc chgs Vended Jobs $ 834 $ 12,202 $ 12,202 $ 12,220 $ 74,118 $ 146,640 $ 146,640 $ 109,980
Sub-Total (Variable Cos t) $ 86,176 $ 101,228 $ 101,228 $ 43,246 $ 461,616 $ 518,952 $ 518,952 $ 389,214
Supplies In House $ 10,278 $ 10,278 $ 10,278 $ 16,006 $ 118,868 $ 288,114 $ 288,114 $ 216,086
Supplies Vended $ 29,738 $ 29,738 $ 29,738 $ 24,010 $ 161,243 $ 192,076 $ 192,076 $ 144,057
Sub-Total (Supply Cos ts ) $ 40,016 $ 40,016 $ 40,016 $ 40,016 $ 280,111 $ 480,190 $ 480,190 $ 360,143
$ -
Grand Total $ 204,093 $ 221,454 $ 221,454 $ 223,810 $ 1,570,339 $ 2,798,110 $ 2,798,110 $ 2,098,583
No Change
to Equip &
Labor Grand Total Sum m ary $ 204,093 $ 221,454 $ 221,454 $ 221,454 $ 1,532,818 $ 2,672,096 $ 2,702,235 $ 2,038,297
Cost Increase Comparison to Existing Contract $ 2,356
Annual Cost Increae over current Contract x 12 Mon 28,268
Cost Savings over Term Contract Cotermious x 36 Mon 84,805
17 File Number- 1

18. Available Options
• Option 4 (6060 Equipment & 3 x 7 Labor)
- Cost Increase $106,621 over the 3 year period.
- Limited increase in capacity.
- This option does not meet the current volume capacity
requirements due to technological limitations.
- This option does not meet the Lean Six Sigma “Voice of the
Customer”.
- See Projected Cash flow expenditure worksheet for detail
validation.
Reduce overall costs while increasing productivity
18 File Number- 1

19. Option 4 Cash Flow
Project Cash Flow Analysis with 6060+ 3 x 7 Labor Add on
36 Month Separate add-on Contract
6060 6060 Only
Print Center Capacity over 1.5 x 5 3x 7 Yr 2004 Yr 2005 Yr 2006 Yr 2007
100% Jun-04 Jul-04 Aug-04 Sept-04 (7 Mon) (12 Mon) (12 Mon) (9 Mon)
Monthly Fixed Costs Actual Projected Projected Projected Projected Projected Projected Projected
70005 39 B/W Equip (Min) $ 27,525 $ 27,525 $ 27,525 $ 26,525 $ 188,676 $ 318,300 $ 318,300 $ 238,725
70005 39 Labor (Min) $ 39,927 $ 42,235 $ 42,235 $ 65,977 $ 388,305 $ 791,724 $ 791,724 $ 593,793
Color Equip 6060 (Min)
70065 05 w /bookletmaker $ 10,450 $ 10,450 $ 10,450 $ 10,450 $ 73,150 $ 125,400 $ 125,400 $ 94,050
N ew New 6060 Equipment $ 38,202 $ 152,808 $ 458,424 $ 458,424 $ 343,818
Sub-Total (Fixed Cos t) $ 77,902 $ 80,210 $ 80,210 $ 141,154 $ 802,939 $ 1,693,848 $ 1,693,848 $ 1,270,386
Variable Cost
* B/W Impress count 916,760 1,111,646 1,111,646 1,111,646 7,586,636 13,339,752 13,339,752 10,004,814
* Color Impress count 958,632 1,000,000 1,000,000 1,000,000 6,958,632 12,000,000 12,000,000 9,000,000
B/W Impression $.0037
(Min 1.2M) $ - $ - $ - $ - $ - $ - $ - $ -
B/W Impression on Color
Machine $.020 $ 23 $ 26 $ 26 $ 26 $ 179 $ 312 $ 312 $ 234
N e w p ric in g
$ .062 with
500K m in Color Impression
in c l d e d
u $.089 (In House) $ 13,294 $ 17,800 $ 17,800 $ 24,800 $ 148,094 $ 297,600 $ 297,600 $ 223,200
N e w p ric in g
$ .062 with
500K m in Color Impression
in c l d e d
u $.089 (Vended) $ 72,024 $ 71,200 $ 71,200 $ 6,200 $ 239,224 $ 74,400 $ 74,400 $ 55,800
Misc chgs Vended Jobs $ 834 $ 12,202 $ 12,202 $ 12,220 $ 74,118 $ 146,640 $ 146,640 $ 109,980
Sub-Total (Variable Cos t) $ 86,176 $ 101,228 $ 101,228 $ 43,246 $ 461,616 $ 518,952 $ 518,952 $ 389,214
Supplies In House $ 10,278 $ 10,278 $ 10,278 $ 29,738 $ 132,600 $ 288,114 $ 288,114 $ 216,086
Supplies Vended $ 29,738 $ 29,738 $ 29,738 $ 10,278 $ 147,511 $ 192,076 $ 192,076 $ 144,057
Sub-Total (Supply Cos ts ) $ 40,016 $ 40,016 $ 40,016 $ 40,016 $ 280,111 $ 480,190 $ 480,190 $ 360,143
Grand Total $ 204,093 $ 221,454 $ 221,454 $ 224,416 $ 1,570,945 $ 2,692,990 $ 2,692,990 $ 2,098,583
No Change
to Equip &
Labor Grand Total Sum m ary $ 204,093 $ 221,454 $ 221,454 $ 221,454 $ 1,532,818 $ 2,672,096 $ 2,702,235 $ 2,038,297
Cost Increase Comparison to Existing Contract $ 2,962
Annual Cost Increae over current Contract x 12 Mon 35,540
Cost Savings over Term Contract Cotermious x 36 Mon 106,621
19 File Number- 1

20. Recommendation
• Move forward with the Renewal Proposal of Option 1
with Xerox. (Add the iGen3 & 3 X 5 Labor configuration)
- Resulting Benefits:
 Maximizes over all production center costs savings & improved profitability.
 Increases in-house managed capacity for internal customers requirements.
 Increases efficiency/labor utilization.
 Decrease the number of late and vended jobs.
 Anticipates for future growth with added capacity and Digital Equipment
Technology
 Improves communication on status of print jobs and turnaround time of high
priority, time sensitive jobs.
 Supports additional color demand driven by the MARCOM 2004 Initiatives
of POD and DAO.
20 File Number- 2

21. www.honeywell.com