Consolidated Manufacturing, Inc., M. P. Long Living Trust, Merl Philip Long, Trustee, Tax Matters Person - Page 14

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          anticipated life cycle as conceptualized by Consolidated.                   
          Consolidated viewed the life cycle of a core as consisting of               
          three phases.  Throughout the first phase of that cycle during              
          which new automobile parts were being introduced into the market,           
          customer cores were scarce; Consolidated might have purchased               
          those parts from manufacturers and cores from core suppliers in             
          order to have cores from which it was able to produce an                    
          inventory of finished goods; and Consolidated's core amounts                
          generally were increasing.  Throughout the second phase of the              
          life cycle of a core as conceptualized by Consolidated, customer            
          core availability increased; Consolidated's inventory need for              
          customer cores was satisfied through transactions with its                  
          customers and on a special order basis from core suppliers; and             
          Consolidated's core amounts leveled out and remained relatively             
          constant.  Throughout the third phase of that life cycle,                   
          customer core availability was at its maximum; Consolidated                 
          regularly sold as scrap metal overstocked customer cores in its             
          unprocessed cores raw material inventory; and Consolidated's core           
          amounts ordinarily were decreasing.                                         
               Other market-related factors that Consolidated considered in           
          determining the core amount which was part of the remanufactured            
          automobile part sales price that it charged a customer for a                
          remanufactured automobile part included the supply of a                     
          particular type of customer core in Consolidated's inventories,             
          the probability that its customers would decide to provide it               




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