Consultant Instructions

Consultant Instructions Rod Devine, owner of the Well, Well, Well (WWW) company, has hired your consulting team to maximize profits on a new sales opportunity in Timbuktu County. Timbuktu County has 16 parcels of land in need of well-drilling services. A well service contract generates $20,000 of revenue per parcel if the drilling successfully produces water. Each failed drilling attempt results in no collection of revenue and a contract penalty payment of $15,000 in damages to the parcel owner. A drilling will fail if the pump pressure is not correct or the drilling is not deep enough. Your team is responsible for the Timbuktu County drilling operation and will submit Data Collection, Pilot Test, and Sales Rollout sheets to your local Key Holder. The Key Holder will return the sheets with data and cost results. Prior rollouts in similar counties have produced average gross margins of $6,000 per parcel. Rod Devine has agreed to continue buying your consulting services only if the Timbuktu rollout produces an average gross margin greater than $6,000 per parcel. Operating costs are as follows: Soil Type Reading $1,000 per parcel Devine Reading $2,000 per parcel Sonogram Reading $1,000 per parcel Pilot Test Drilling $100 per foot Production Drilling $40 per foot

Soil type and Devine readings have been used together to determine the correct pump pressure and a minimum drill depth, but they must be calibrated to each new county. Historically, WWW has predicted pump pressure with great success, but poor predictions of drill depth have resulted in penalty payments or excessive operating costs. WWW has recently added sonogram readings to the available data collection. The sonograms are believed to provide an estimated water depth reading within 20% of the actual depth, but have not yet been proven in the field. Your consulting team may make multiple data collection requests or run multiple pilot tests in any order and at any time prior to submission of the Sales Rollout Sheet. The Sales Rollout Sheet is submitted only once as the last action of your consulting team. The Sales Rollout Sheet must include drilling instructions for all parcels that do not have a successful well. Do not include parcels with successful pilot test wells on the Sales Rollout Sheet. Sales Rollout Sheets may not be modified after submission. Key Holder Instructions Observe the process and behavior of your assigned consulting team. Do not disclose any of the Answer Key information unless requested on the proper form.

Upon receipt of the Data Collection Sheet: 1. Look up requested data (checked boxes) in Answer Key. 2. Enter requested data into Data Collection Sheet. 3. Return the Data Collection Sheet to the consulting team. 4. Calculate and post the Data Cost after all data collection is complete (upon receipt of the Sales Rollout Sheet).

Upon receipt of the Pilot Test Sheet: 1. Check the Drill Depth and Pressure Setting columns against the Answer Key for the identified parcel. 2. If the Pressure Setting matches the Answer Key and the Drill Depth is equal to or greater than the Minimum Drill Depth, enter Water in the Result column. 3. If the Pressure Setting does not match the Answer Key or the Drill Depth is less than the Minimum Drill Depth on the Answer Key, enter Dry Hole in the Result column. 4. In the $ Revenue Column, enter $20,000 if the Result is Water. 5. In the $ Revenue Column, enter -$15,000 if the Result is Dry Hole. 6. Calculate the Drill Cost by multiplying the Drill Depth by $100/ft and enter the Drill Cost for the parcel. 7. Return the Sheet to the consulting team.

Upon receipt of the Sales Rollout Sheet: 1. On the Sales Rollout sheet, eliminate parcels that had successful wells (Result = Water) in Pilot Testing. 2. Request any missing Drill Depth and Pressure Setting data for parcels without a successful well (Result = Water) in Pilot Testing 3. Check the Drill Depth and Pressure Setting columns against the Answer Key for the identified parcel. 4. If the Pressure Setting matches the Answer Key and the Drill Depth is equal to or greater than the Minimum Drill Depth, enter Water in the Result column. 5. If the Pressure Setting does not match the Answer Key or the Drill Depth is less than the Minimum Drill Depth on the Answer Key, enter Dry Hole in the Result column. 6. In the $ Revenue Column, enter $20,000 if the Result is Water. 7. In the $ Revenue Column, enter -$15,000 if the Result is Dry Hole. 8. Calculate the Drill Cost by multiplying the Drill Depth by the $40/ft and enter the Drill Cost for the parcel. 9. Complete the Results Sheet by entering the totals from the Data Collection, Pilot Testing, and Rollout Sheets. Data Collection Sheet Directions: Use the check boxes to request data by parcel. Calculate the Data Cost for each parcel by adding $1,000 per parcel for Soil Type readings, $2,000 per parcel for Devine readings, and $1,000 per parcel for Sonogram readings.

Parcel Soil Type Devine Reading (W = Sonogram Reading Data Address (R=Rock, S=Sand) Weak, S = Strong) (Water Depth) Cost ($) A1    A2    A3    A4    B1    B2    B3    B4    C1    C2    C3    C4    D1    D2    D3    D4    Total Pilot Test Sheet Directions: Use the check boxes to request a pilot test by parcel. Calculate the Drill Cost for each parcel pilot by multiplying the drill depth in feet by $100/ft. After the test results are determined enter $20,000 in the Revenue column for a successful test (water) or –$15,000 for an unsuccessful test (dry hole).

Parcel Drill Depth Pressure Setting Test Result Drill Cost $ Revenue Address (50–150 ft) (Low, High) (Dry Hole, Water) ($100/ft) (Penalty)  A1  A2  A3  A4  B1  B2  B3  B4  C1  C2  C3  C4  D1  D2  D3  D4 Total Sales Rollout Sheet Directions: Enter a drill depth and pressure setting for all parcels that do not have a successful pilot test well. Calculate the Drill Cost for each parcel by multiplying the drill depth in feet by $40/ft. After the results are determined enter $20,000 in the Revenue column for a successful drilling (water) or –$15,000 for an unsuccessful drilling (dry hole).

Parcel Drill Depth Pressure Setting Result (Dry Drill Cost $ Revenue Address (50–150 ft) (Low, High) Hole, Water) $40/ft (Penalty) A1

Total Results Sheet Directions: Enter results from the Data Collection, Pilot Test, and Sales Rollout sheets.

Revenue (Net Penalties) from Pilot Tests Revenue (Net Penalties) from Sales Roll Out

Total Revenue (Net Penalties)

Data Collection Cost Pilot Drilling Cost Roll Out Drilling Cost

Total Cost

Gross Margin (Total Revenue Less Total Cost)

Avg. Margin Per Parcel (Gross Margin/16 Parcels) Answer Key for Timbuktu County

Parcel Soil Devine Sonogram Pressure Minimum Drill Address Type Reading Reading Setting Depth (ft) A1 Sand Strong 45 High 60 A2 Sand Strong 55 High 65 A3 Sand Strong 65 High 65 A4 Sand Strong 75 High 60 B1 Sand Weak 120 Low 100 B2 Sand Weak 110 Low 105 B3 Sand Weak 90 Low 100 B4 Sand Weak 80 Low 105 C1 Rock Strong 70 Low 85 C2 Rock Strong 75 Low 80 C3 Rock Strong 80 Low 85 C4 Rock Strong 85 Low 80 D1 Rock Weak 90 High 120 D2 Rock Weak 110 High 120 D3 Rock Weak 130 High 125 D4 Rock Weak 150 High 125