Case Study on "Project Management Scenario a Global Consumer Electronics"

Case Study 9 pages (2476 words) Sources: 10 Style: Harvard

[EXCERPT] . . . .

Project Management

Scenario

A global consumer electronics company is interested in expanding its business by developing vehicle-mounted PDAs (Personal Digital Assistant). The vehicle-mounted PDA is the compact computer terminals that can be used to be mounted on field service vehicles, forklifts, transport vehicle and construction truck. Organizations also use Vehicle-mounted PDAs for many purpose including logistics, industrial monitoring and control, warehouse vehicles and for roadside assistance. Employees also use the PDA communicates progress of business transaction with the information systems as well as recording organizational business transactions. Meanwhile, PDA serves double purpose for assessing databases for services and for the application purpose by which a field's service engineer uses PDA for fixing equipment at the customer site. For effective application purpose, Vehicle-mounted PDAs may possess wireless connectivity such as a wireless LAN interface, Bluetooth, and mobile or cellular connectivity.

Project Objective

The objective of the project is to plan the development and installation of a wireless network to support PDA operation for an airport application -- (John Kennedy Airport application).

To enhance greater understanding of the proposed PDA, the project defines the wireless and the proposed PDA to be used at an airport.

Proposed PDA and Wireless Network

The proposed PDA for the airport wireless application will be Cisco Aironet 3600 Cisco. The Cisco Aironet 3600 Series Access is designed to provide the best performances. By allowing th

Continue scrolling to

download full paper ⤓

e optimal network performances, Cisco Aironet 3600 provides multiple-input multiple-output (MIMO) designed with four transceiver 802.11n. The Cisco Aironet 3600 Series offers high capacity, versatility and enterprises-class features that are adapted with wireless LAN as well as supporting 802.11n wireless standard.

A unit priced for a Cisco Aironet 3600 is £1,100. The price is proposed for £1,100 because the Cisco 3600 series boost performances at the range 802.11n and 802.11a/g devices. Typically, the Cisco Aironet 3600 assists PDA to scan airport baggage via the wireless LAN. The technology offers network infrastructure with switching technology and network routing which assist airport to offer passengers with business speed.

The proposal provides the project feasibility and management to identify the stakeholders for the airport-based project.

"Part a -- Project Feasibility and Management (Q1). Identify the various stakeholders for the airport-based project and examine their likely viewpoints and concerns by conducting a Force-field analysis."

The stakeholders for the airport-based project are management of a global consumer electronic company, airport management, airport employee, airport customers, PDA producer, and project manager. Using a Force-field analysis, the proposal examines the likely viewpoint and concern of the stakeholders.

Fig 1: Force-Field Analysis for the Stakeholders

The Force-Field analysis has been able to determine the viability of the project. With the identification of the stakeholders, it is revealed that the management of the Global Consumer Electronic Company believes that the new project is likely to improve the productivity of the sales of the company as well as increasing the company revenue. Employee of the Global Consumer also believes that the new technology will increase the company productivity and this make the company to increase their salary. However, the new technology will make employees of the airport to be frighten on the ground that the new technology might lead to the laid off on non-it workers or non-technical workers. On the other had the project manager and the PDA producer will like the project to start because they are likely derive financial benefits from the project. Based on the project analysis using Force-Field analysis, it is revealed that the project is likely to viable because only a stakeholder is likely to oppose the project.

Q2). "The firm will invest £5 Million in Year 0 to develop the product and expect Sales

during Years 1 -- 4. Fixed costs are to be £7 Million annually (not negotiable) and the items comprising the variable costs should be identified and discussed. Assumptions are to be clearly stated."

Meanwhile, the sale forecast and the project cash flow are critical to determine the feasibility of the project. Thus, the project cash flow is provided in Table 1.

Table 1: Project Cash Flow

Pro Forma Cash Flow

Year 0

Year 1

Year 2

Year 3

Year 4

Cash Received

Cash from Operations

Cash Sales

£2,700,000

£2,975,750

£4,036,250

£5,923,063

£6,923,063

Cash from Receivables

£2.300,000

£2,745,583

£3,786,092

£3,713,875

£4,813,875

Subtotal Cash from Operations

£5,000,000

£6,721,333

$7,822,342

£9,636,938

£11,736,938

Additional Cash Received

Sales Tax, VAT, HST/GST Received

£0

£0

£0

£0

£0

New Current Borrowing

£0

£0

£0

£0

£0

New Other Liabilities (interest-free)

£0

£0

£0

£0

£0

New Long-term Liabilities

£0

£0

£0

£0

£0

Sales of Other Current Assets

£0

£0

£0

£0

£0

Sales of Long-term Assets

£0

£0

£0

£0

£0

New Investment Received

£0

£0

£0

£0

Subtotal Cash Received

£5,000,000

£6,721,333

£7,822,342

£9,636,938

£11,736,938

Expenditures

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending

£125,000

£215,000

£570,000

£755,000

Bill Payments

£850,000

£1,648,592

£3,071,925

£4,134,180

Subtotal Spent on Operations

£957,000

£1,863,592

£3,641,925

£4,889,180

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

£0

£0

$0

£0

Principal Repayment of Current Borrowing

£0

£0

£0

£0

Other Liabilities Principal Repayment

£0

£0

£0

£0

Long-term Liabilities Principal Repayment

£0

£0

£0

£0

Purchase Other Current Assets

£0

£0

£0

£0

Purchase Long-term Assets

£0

£0

£0

£0

Dividends

£35,000

£50,000

£75,000

£225,000

£350,000

Subtotal Cash Spent

£992,000

£1,913,592

£3,716,925

£5,114,180

£6,114,180

Net Cash Flow

£550,000

(£692,259)

£705,417

£922,758

£1,522,758

Cash Balance

£125,021

£157,041

£262,458

£785,216

£1, 585,216

The sales forecast for the project is as follows.

Table 2: Sales Forecast

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales

£1,951,500

£4,072,500

£5,846,125

Direct Cost of Sales

£975,750

£1,995,525

£2,747,679

Other Costs of Goods

$0

$0

$0

Total Cost of Sales

£975,750

£1,995,525

£2,747,679

Gross Margin

£975,750

£2,076,975

£3,098,446

Gross Margin %

50.00%

51.00%

53.00%

Expenses

Payroll

£215,000

£570,000

£755,000

Sales and Marketing and Other Expenses

£216,000

£200,000

£250,000

Depreciation

$0

$0

$0

Advertising & Marketing Collateral

£295,000

£350,000

£425,000

Industrial Design

£64,284

£75,000

£80,000

Rent

£22,800

£26,000

£30,000

Telephone

£7,500

£10,000

£15,000

Utilities

$14,400

$18,000

£20,000

Insurance

£6,000

£7,500

£7,500

Payroll Taxes

£50,200

£85,500

£113,250

Company Vehicles and related expenses

£16,800

£18,000

£19,000

Trade Shows & Events

£30,000

£0

£0

Total Operating Expenses

£937,984

£1,360,000

£1,714,750

Profit Before Interest and Taxes

£37,766

£716,975

£1,383,696

EBITDA

£37,766

£716,975

£1,383,696

Interest Expense

£0

£0

£0

Taxes Incurred

£11,330

£215,093

£415,109

Net Profit

£26,436

£501,883

£968,587

Net Profit/Sales

1.35%

12.32%

16.57%

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

Assets

Current Assets

Cash

£157,041

£262,458

£785,216

Accounts Receivable

£230,167

£480,325

£689,512

Inventory

£130,900

£267,706

£368,610

Other Current Assets

£0

£0

£0

Total Current Assets

£518,108

£1,010,489

£1,843,338

Long-term Assets

Long-term Assets

£0

£0

£0

Accumulated Depreciation

£0

£0

£0

Total Long-term Assets

£0

£0

£0

Total Assets

£518,108

£1,010,489

£1,843,338

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities

Accounts Payable

£192,371

£257,870

£347,132

Current Borrowing

£0

£0

£0

Other Current Liabilities

£0

£0

£0

Subtotal Current Liabilities

£192,371

£257,870

£347,132

Long-term Liabilities

$0

$0

$0

Total Liabilities

£192,371

£257,870

£347,132

Paid-in Capital

£450,000

£450,000

£450,000

Retained Earnings

(£150,700)

(£199,264)

£77,619

Earnings

£26,436

£501,883

£968,587

Total Capital

£325,736

£752,619

£1,496,206

Total Liabilities and Capital

£518,108

£1,010,489

£1,843,338

Net Worth

£325,736

£752,619

£1,496,206

By calculating the payback period for the project, the proposal divide the initial investment by the annual cash flow. In the PDA Investment, the global electronic company will have a payback as follows:

Formula for Payback period: Initial Investment / Annual cash flow

Initial investment= £5,000,000

Annual cash flow = £3,716,925

Payback period is 1.35 years

Based on the calculation the payback period for the PDA project is 1.35 years. Based on the cash flow for the project, the project is likely to be acceptable by senior management on the ground that the payback period is 1.35 years.

Q3). Evaluation of the two forecasts prepared is as follows:

b. To calculate the potential value of the project using Net Present Value (NPV) and the Internal Rate of Returns. The proposal uses the project cost of capital, which is 7%. Typically, NPV calculates the present value of the project cash inflows and the project cash outflows. The basic principle of NPV is to calculate whether the present value of the project inflows is greater than the present value of project cash outflows.

Based on the previous calculation, the net cash flows for the investment is as follows

Year 0

Year 1

Year 2

Year 3

Year 4

Net Cash Flow

£550,000

£692,259

£705,417

£922,758

£1,522,758

With 7% discounted cost of capital, the NPV for the project is calculated as follows:

NPV: 550,000+(0.952 X 692,259)+ (0.890X 705,417)+(0.840 X 922.751) +(0.792XX 1,522,758).

550,000+659,021+627821+775110+1206024

NPV is 3,817,676

From the discount cash flow model, senior management would accept the investment based on the fact the NPV is positive at the cost of capital of the firm.

Thus, the Internal Rate of Return is 16%.

Q4). "Examine the benefits of inter-project learning for a global consumer electronics firm and make recommendations on how this could… READ MORE

Download Full Paper

Write a New Paper for Me

Quoted Instructions for "Project Management Scenario a Global Consumer Electronics" Assignment:

“

Project Management :

A global consumer electronics company is looking to expand their business and aims to

develop vehicle-mounted PDAs (Personal Digital Assistant). These vehicle-mounted PDAs

are compact computer terminals which can be mounted on forklifts; field service vehicles;

construction trucks or transport vehicles etc.

Vehicle-mounted PDAs are used by firms in many fields including roadside assistance;

warehouse vehicles; logistics and industrial monitoring and control. Employees use the PDA

as a small computer to record business transactions and communicate progress with the

organisations information systems. Thus, PDAs are not just used as computers but for also

accessing databases for services and applications (e.g. a field services engineer fixing

equipment at the customer site). Vehicle-mounted PDAs may have wireless connectivity

such as Bluetooth (a wireless LAN interface) or even cellular or mobile phone connectivity.

The assignment is to plan the development and installation of a wireless network to support

PDA operation for an airport application ***** which you specify.

Prepare a formal written report:

Prepare a Word document and write formally (i.e. avoid use of *****I***** or casual terms). For

calculations show formula; data; workings and results (preferably tabulated). Greater

discussion; interpretation and evaluation is expected for higher grades (e.g. giving insights

into the firm*****s situation; the management implications and making sector comparisons), as

well as appropriate use of business/financial jargon and evidence of wider reading.

The report is to be organised in two parts as follows:

*****¢ Part A concerns the development of the PDA by the consumer electronics firm for an

airport application.

*****¢ Part B concerns the deployment of the wireless network at the airport (to support the

PDAs).

Start each of the parts on a new page (this is to aid the marking process).

Introduction (no marks but needed for completeness)

a) Define your proposed PDA and wireless network for use at an airport ***** both the

product and the intended application(s).

b) Propose (and justify) a unit price for your PDA which should be one of the following:

Â£600, Â£800 or Â£1100.

Part A ***** Project Feasibility and Management

Q1). Identify the various stakeholders for the airport based project and examine their likely

viewpoints and concerns by conducting a Force-field analysis. You answer should be in

the form of a diagram annotated with the various forces followed by text that summarises

the overall situation (i.e. it*****s a synthesis of the main points).

Q2). The firm will invest Â£5 Million in Year 0 to develop the product and expect Sales

during Years 1 ***** 4. Fixed costs are to be Â£7 Million annually (not negotiable) and the

items comprising the variable costs should be identified and discussed. Assumptions are

to be clearly stated.

a) Prepare a cash flow forecast (in Â£) for the years of production (Years 1 ***** 4) given that

the first years sales units are the last five digits of your student id: (The last five digits of my student ID are : 33945)

Step 1: Construct the revenue model given that sales forecasts are expected to increase

rapidly in the first two years and then increase gradually after that

Step 2: Construct the operating expenditure model based on allocated overheads and

variable costs (check that the Contribution Margin is a sensible figure of say 24% to 40%)

Step 3: Combine the revenue and expenditure models and calculate total cash flow

position. Include the Opening and Closing Balance for each year in your forecast (where

the Opening Balance in Year 1 is a negative value equal to the value of the investment).

Ensure that the Payback Period for the project occurs during Year 3 or Year 4.

b) Revise the overall cash flow forecast (i.e. Steps 1-3) such that Payback occurs in

Year 2. Comment on whether or not this revised forecast is likely to be acceptable to

senior management.

Q3). Evaluate the two forecasts you have prepared as follows:

a) Examine the affect on the Net Cash Flows and the Payback Period of your two

forecasts if the *****˜time effect of money***** is taken into account and cash flows are

discounted by 7% (the cost of capital).

b) Calculate and comment on the potential value of the project using investment

appraisal techniques including the Net Present Value (NPV) and the Internal Rate of

Return (IRR) for both the original forecast and the revised one.

c) Which forecast will you recommend? Justify this choice.

Q4). Examine the benefits of inter-project learning for a global consumer electronics firm

and make recommendations on how this could be implemented.

Note: wider reading is expected for this Question including journal articles.

Part B - Project Planning & Control

The project team have identified five projects with similar activities and parameters, as

shown in Table B1. You have been allocated the project which has a code containing the last

digit of your student number (e.g. if your student number ends with 1 or 2, your project is

P12). It is not important what the activities are for this assignment. (My Project is P56)

Q5). Draw both the AOA and AON network for the project and determine the critical path

using CPA.

Q6). a) Construct a GANTT chart and identify scheduling flexibilities.

b) Calculate and draw a chart of the labour profile required to complete the project for

an early start schedule.

c) What specific rules could be adopted to decide how to schedule this project and

what constraints must be taken into account.

Q7). a) Find the expected time of the project using PERT. What is the probability of

completion within the expected time?

b) What is the probability of completion 4 weeks before the expected project

completion time?

c) When using probability analysis like this, what care needs to be taken?

Q8). Find the minimum cost increase to reduce the expected duration of the project by 2

weeks.

Q9). The Company assessed the costs of the project at important milestones at the outset

as shown in Table B2. After some weeks, the project manager asked the task

supervisors for progress reports and the feedback shown in Table B2 was reported.

a) What is the cost variance for the project so far?

b) Compare this to a calculation of the schedule variance.

c) Provide your clear comments on the progress of the project.

Q10). The project manager seeks to minimize the total cost of a certain activity related to this

project. The resources used for the activity are Resource U and Resource V (both

measured in resource-hours). Resource U costs Â£400 and Resource V costs Â£900.

Due to certain institutional, physical, and policy constraints, the amount of Resource U

used (y) should be at least 2.5 resource-hours. Also, y+2x must not exceed 7.45

resource-hours, and y-x must not exceed 1.75 resource-hours, where x is the amount

of Resource V.

a) Using manual means (a graph sheet), sketch the objective function and constraints

on the same Cartesian axes and find the optimal solution.

b) Using MS Solver, determine the optimal quantities of Resource U and V that achieve

the project manager*****s objective. What is the minimum cost (the cost that

corresponds to the optimal values of the decision variables)?

Format is a formal written report including charts/diagrams; calculations (with data; formula; workings

and assumptions) and discussion/ comments. Report to be written using Word in a 12 point font (any

Excel based calculations should be copied into tables in the Word file using a minimum 9 point font).

*****

How to Reference "Project Management Scenario a Global Consumer Electronics" Case Study in a Bibliography

“Project Management Scenario a Global Consumer Electronics.” A1-TermPaper.com, 2012, https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867. Accessed 3 Jul 2024.

Project Management Scenario a Global Consumer Electronics (2012). Retrieved from https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867

A1-TermPaper.com. (2012). Project Management Scenario a Global Consumer Electronics. [online] Available at: https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867 [Accessed 3 Jul, 2024].

”Project Management Scenario a Global Consumer Electronics” 2012. A1-TermPaper.com. https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867.

”Project Management Scenario a Global Consumer Electronics” A1-TermPaper.com, Last modified 2024. https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867.

[1] ”Project Management Scenario a Global Consumer Electronics”, A1-TermPaper.com, 2012. [Online]. Available: https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867. [Accessed: 3-Jul-2024].

1. Project Management Scenario a Global Consumer Electronics [Internet]. A1-TermPaper.com. 2012 [cited 3 July 2024]. Available from: https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867

1. Project Management Scenario a Global Consumer Electronics. A1-TermPaper.com. https://www.a1-termpaper.com/topics/essay/project-management-scenario-global/2466867. Published 2012. Accessed July 3, 2024.