Part 1
1. When is the project estimated to be completed? How long will it take?
The Red Zuma project will take 260 days and be completed on 1/11/16
2. What is the critical path for the project?
Market Analysis Product Design Product Design Selection Detailed Product Design Build Prototypes Field Test Prototypes Finalized Product Design Final Manufacturing Process Order Production Equipment Install Production Equipment Celebrate
3. Which activity has the greatest amount of slack?
Detailed Marketing plan has the greatest amount of slack.
4 .How sensitive is this network?
Because this network is not very sensitive it means that there is only one critical and also a wide range of available free slack.
5. Identify two sensible
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Part 3
Top management has accepted the schedule created at the end of Part 2. Prepare a brief memo that addresses the following questions:
1. How much will the project cost? What is the most expensive activity?
The Red Zuma Project would cost $903,699 and the most expensive activity will be detailed product design at a total cost of $190,168
2. What does the cash flow statement tell you about how costs are distributed over the life span of the project?
The cost during the projects first month are low and decline in September, however in October there is a spike.
MOTHLY CASH FLOW
Part 4
STATUS REPORT
The Red Zuma Project is currently over budget, product design costed a lot of extra capital however, we were able to complete the manufacturing study under budget.
Being 93 cents for every ever dollar when it comes to planned work.
The EAC is $973,246, if we are only getting 93 on cents on the dollar worth of work we will be about $70,000 over budget by the projects
interest. Looking at a $9,500 dollar contract at 22.50% interest while paying $69.06 a week for 208 weeks, will cost a total amount of $14,364.48. That is almost
The following table demonstrates the PV of costs, the PV of benefits and the NPV respectively, over 5-year period for the investment:
Discounted Cash Flow Method takes the forecast free cash flows during forecasted horizon. Then we estimate the cost of capital (weighted average cost of capital) and estimate continuing value (value after forecast horizon). The future value is discounted to the present value. We than add back cash ($13 Million) and non-current assets and deduct total debt. With the information provided several assumptions had to be made to obtain reasonable values (life period of 30-years, Capital expenditures not to exceed $1 million dollars, depreciation to stay constant at $1.15 Million and a discounted rate of 10%). Based on our analysis, the company has a stand-alone value of $51 Million at the end of fiscal year end 1990 with a net present value of cash flows of $33 million that does not include the cash and non-current assets a cash of and non-current assets.
This analysis shows that the projects NPV as 13.37 million dollar. Our result is slightly different than the presenting team because of rounding. But both of our teams had positive NPV which suggest that the project should be accepted.
Regardless of how departmental budgets are established, best practices in capital budgeting clearly state that all side-effects of a project must be included in cash-flow projections (Schiff, 1988 *2). In fact, transportation costs have a significant impact on cash-flows and also on the value of the project.
Making an investment towards a new project/product/company is hardly a simple process. Numerous factors including costs, benefits, time, and resources need to be taken into account before a decision to pursue a new project should be ventured into. At the end of the day prioritising projects and investing funds into projects that have the most potential towards favourable return on investment should be considered. Investment appraisal should not only be used for projects with a monetary return, it is also pertinent to use the tools where the return may not be easy to quantify such as training or development programs. Investment
Initial projections show that the current schedule will take 50 weeks to finish with a final budget estimate of $3.152 million. Although the project estimate comes in under budget, the time frame for completion extends beyond the acceptable 45 weeks. Therefore, the following discussion takes a closer look at the project's conditions by developing a project priority matrix, project network, and a Gantt chart to help Bjorn Ericksen and his team reduce the project duration. The author then offers a project closure approach.
In terms of the whole project the main issues faced were around no changes to project schedule as it is not flexible and project must be completed within 1 year and the scope must be supported and not changed, and it was challenging to find a vendor who could meet these criteria.
Kim, B. &. (2011). Combination of project cost forecasts in earned value management. Journal Of Construction Engineering & Management, 958-966.
...bine it into the price for equipment rentals and labor. The grand total of these figures is the cost of the job, if we price under that number, we lose money. So, careful judgment is used to decide how much profit a job should bring in. We then decide how much over the total cost we want to charge, we type up an official, detailed quote for the job. If the contractor is happy with the price, he will accept our bid and we now have the job. Now all that’s left to do in this stage is to get all the permits and draw up the necessary contracts.
Perform critical review of the results. Describe success of the marketing decisions and techniques. Synthesize a list of recommendations for marketing and management specialists employed by hi-tech startups in the manufacturing field.
emerging or new market. It can originate from new technology or new market opportunities (Eliashberg, J., Lilien, G. L., & Rao, V. R. 1997). Literature defines product development as exploiting an untapped market opportunity and turning it into a value product for customer satisfaction. Development and introduction of a new product requires extensive research on understanding customer needs, market structure, emerging trends and analysing the internal & external competitive market environments. To evaluate customer satisfaction previous researches provide strong relationship between customer satisfaction and product quality, product features and value for money. ***
Cost is the sum of expenses whether estimated or actual attributable to a particular item (Bragg, 2012). Nevertheless, the word cost is difficult to define precisely. Its understanding rests on:
(Target costing is “a structured approach for determining the cost at which a proposed product with specified functionality and quality must be produced to generate a desired level of profitability at its anticipated selling price.”) In order to properly achieve target costing a company must complete the following steps; determine a market price point for the proposed product, calculate the target cost by subtracting the desired profit from the target price, reiterate the product design to achieve target cost, and finally revise the market price following the redesigned product and current market conditions. This mistake in the implementation of target costing led to missed opportunities to reduce costs through the redesign of product components and tooling. The missed cost reduction opportunities resulted from the hasty decision making in the design phase, Billings accepted early component designs without additional cost reducing
project will be avoided because the materials needed to build it add up to a great expense