NCSSN BEFFIT Swot Analysis Paper

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Engineering Economics project
IE343
Khuloud almutairi
68741
Malak Al-Sabah
58253
Maryam almajed
35650
I.
Introduction:
Today, almost all business organizations have developed and transferred their operations to the mobile application.It is a
trend of the century that must not be ignored.According to online reports, companies who have developed their own
websites and apps, have earned more profits than those who do not.So we had the idea of developing that type of activity
and competing with the Kuwaiti telephone market.In Kuwait, when you want a telephone shop, you get a lot of them.But,
about 95 percent of them are the same in terms of products, services, and even prices!.That’s why an idea came up.We will
develop a smartphone shop that will focus on providing the best services and prices for spare parts, technology support
and workshops on the wheel to serve at home.In addition, it will serve as a source for luxury mobile services.We will also
concentrate on people living in remote areas like Sabah Al-Ahmed.In this report, we would highlight the benefits of our
proposed engineering project plan.After that, we will indicate the reason why we chose this project.What is the additional
value? Next is the distribution structure to demonstrate each project phase.Relevant costs/revenues will be discussed. By
doing so, we will be able to understand the project in a clear way to decide if it is good or bad. Ultimately, we will present
our work schedule to show how we have achieved this project so far.
II.
description of the chosen project:
Our idea is to create an app that would save the client time, effort, and money by offering them the best possible services.
Our application would be called (FastFix). FastFix is an application where the customers can order a workshop on wheels
while at the same time, they can buy plenty of different types of our products. Also, the customer would be able in our
application to compare the various prices of our products such as mobile chargers, phone cases and headphones with other
suppliers. These would be able to compare our prices with well-known online sites like Ali Baba and Amazon. In addition,
our application will contain sections where the client could put any item in their wish list to purchase it later. In addition,
the customer can customize their order. For example, if a client found an online product and it is not available in Kuwait.
We will buy that product and send it to him with interest. Also, if. Our client is a student, there would be special discounts
in terms of parts prices only, but not on workshops on the steering wheel. Our seminars. At the wheel, will repair the
phones, provide technical support and at the same time would have a different kind of products in the vans. What we are
proposing. we will have 4 vans that will provide service to entire Kuwait. These vans would have an employee who is
professionally engaged in this activity. In addition, this application would be. Provide the customer with a link to famous
phone spare parts like Endure and Anker. If there were discounts on their part, we could warn them and sell them to the
customer. However, it would not be just workshops on the wheel. We at FastFix would put in place a communication
center that would be our office. An employee would coordinate orders received, contact vendors, and run our social media
accounts. This would be the first application in Kuwait that offers this type of service where the client can choose the best
one for himself.
III.
add value & it’s importance to the market/industry:
Behind any project, there is an added value that the business owner sees and think it would be beneficial to the
market industry, economy, and the customer at the same time. In our project, we expect to receive more orders
from remote areas such as Sabah Al-Ahmed, Alqairwan, and Jaber al-Ahmed. These areas generally do not have
access near telephone shops when they needed it. In addition, we will supply this service via our workshops on
the wheel (vans). Those vans would repair the phones when at the same time the customer can scan the products
we have in the van and buy it. So, we can summarize our added value in these areas. First, we will provide.
Competitive prices compared with other vendors. We will have a section on our mobile application where the
client can compare prices to choose the one that suits them best. Secondly, our workshops on. The wheel (vans)
that will primarily serve people in remote areas as we have already said. These vans would save money. The
customer time, effort, and money. Third, our application which will have several sections like Wishlist, compare
prices and custom ordering section.
IV.
work break down structure:
FastFix application
1.1
rent
1.2
order products
1.2.1
contact supplier
1.3
software app
1.4
buying cars
1.4.1
setup the car
1.5
office rent
1.5.1
communictation
center
1.6
employees
1.7
advertisement
1.6.1
contract
1.2.2
shipping and
packing
As shown in the figure, we will have an investment with 97,713$ to start our project. We have four cars in total to service
the customer throughout the country. Each car will cost us $10,000 according to our research on the famous Nissan car
company. For the installation of each car, it will cost $3,333 which means we will have an extra $13,332 for the addition
of adjustment, the design of the application software will cost us about $8,000. Moreover, we will need 5 computers to
operate this business. Each computer will cost up to 1,301$. So, the total for 5 computers will be 6,505$. In addition, the
rest of the unspent amount will be spent on the storage rent, office rent, purchasing cars, employees including their
salaries, car fuel and social media advisement.
I.
revenues and cost:
Costs and revenues are the backbone of each project. Project managers will evaluate their projects in a clear way to the
best results they want. Our project has expected costs and income measured by reliable sources. First, we provide analysis
based on the reference provided in the following reference section. Our project has a few types. What are they. Well, we
have a fixed cost, it is our office rental, storage rental, and workers’ salary. Next, the variable cost is these cars, and the
cost is expected to be made up in the automatic fuel.
The total cost of our company would be 67,837$. The rest of the budget is 29,876$ .It includes storage rent, office rent, car
maintenance, salaries and fuel.
Fixed cost
storage rent2,160 $ per year
office rent 4,800$ per year
workers salaries 13,800$ per year
The storage rent would cost us 2,160$ per year. we come up with this price by first searched on the internet about storage
units in Kuwait. Then, we have narrowed our search to the best location and price. We have contacted company and asked
them for their prices. The cost for one month would be 180$ per month including shipping and packing provided by the
company. Then, we have looked for an office that is suitable for our project. We have made sure that the office is near and
close to services. We found that our office rent is 400$ per month which is the best price we could get. At the end of our
fixed costs, the worker salaries. We have decided that their wage per month would be 230$ per month and we have 5
employees.
variable costs
car maintance 2,600$ per year
fuel 4,000$ per year
Spare patrs 2,516$ per year
In our variable costs, we have car maintenance and fuel each month. We have 4 cars. Each car would have maintenance
each quarter with a budget of 54.17$. Also, the fuel would cost the company for the workshops on wheel 83.34$ per
month for each car. To illustrate our revenue, we will provide this example so the reader can comprehend in a clear
approach.we will get the Spare patrs from Amazon and Ali baba websites.
I.
Cost structure method:
Cost structure refers to the types and relative proportions fixed and variable costs that a business incurs. We’ll show our
fixed and variable costs in this area so we may explain our proposal in a transparent manner. In the iFix application, we
have fixed costs such as storage units, employee wages, and office rent. In addition, we have early costs that are only
needed at the start, such as software design and vehicle purchases, in our variable costs. Monthly costs such as car fuel and
phone accessories, as well as phone spare parts. This is what iFix would pay per month. Finally, we have our annual
expenses. Maintenance of automobiles and computers. As previously indicated, these costs.
Cost structure table
Initial cost
1-1-1-1 Software design
1-1-1-2 Buying and setting the vans
Purchasing References: Cost in $
8,000$
$40,000
References:
Taken from experts
the famous Nissan car
Fixed Cost
1-2-1-3Salaries
1-2-1-1 Storage Rent
1-2-1-2 Office Rent
Variable Costs
Purchasing cost in $
13,800$
2,160$
4,800$
Cost/ year
Expert
Expert
Expert
Ali baba and Amazon
1.1.3.1 Computer maintenance
1.1.3.1
Car maintenance
1.1.2.2 Car Fuel
1.1.2.1
Spare parts
6,505$
2,600$
Expert
4,000$
2,516$
Expert
Ali baba and Amazon
SUMMER 2019
DR. ALTIN HOTI
SECTION: U1
JULY 14, 2019
Engineering economics
Project Final Report
Name
Student Id
Ghazi Alotaibi
32997
Fahad Al-shuwaib
35277
Shaheen Shaheen
33224
Table of contents:
cash$ flow-117,921
diagram
-117,921 $Figure:
-117,921
$
-117,921 $
-117,921 $
E=
A= 729,290 $
729,290 $
729,290 $ 729,290 $
729,290 $
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0
I=-51,196 $
1
2
3
4
5
Introduction: ?3
Description of the chosen project: ?3
Added value & its importance to the market/industry:
?4
structure ?5
Work breakFigure:
downWBD
structure:
Revenues and cost:
?6
Cost structure method:?8
Project progress:
?10 method
Figure: cost structure
Conclusion:Figure:
?16spider plot
References:
?16
Introduction:
Nowadays, almost all business organizations have developed and transferred their activities
to phones application. It is the century’s trend which we can’t ignore. According to online
reports, business who have developed their own websites and apps, have gained more profits
than those who didn’t. Thus, we have come up with an idea to develop this type of activity
and to compete with the Kuwaiti market in the phones sector. In Kuwait, whenever we want a
phone store, we will find plenty of them. But, almost 95% of them are the same in terms of
the products, services, and even the prices!. So, an idea has appeared. We will develop a
smartphone store that will focus on providing the best services and prices for spare parts,
technological support, and workshops on the wheel to serve at home. Also, it will be a source
when it comes to luxury mobile services. We will be focusing also on people who live in
remote areas such as Sabah Al-Ahmed. In this report, we would demonstrate the beneficial
sides of our proposed engineering project plan. Then, we will state why we have chosen this
project. What it’s added value?. Then, the breakdown structure to demonstrate each phase of
the project. We will discuss the relevant costs and revenues. By doing so, we will be able to
comprehend the project in a clear approach to decide whether it is good or bad. In the end, we
will present our work schedule to demonstrate how we have accomplished this project so far.
Description of the chosen project:
Our idea is to create an application that would save the customer time, effort and money with
the best services they could obtain. Our application would be called ( iFix ). iFix is an
application where the customers can order a workshop on wheels while at the same time they
can buy plenty of different types of our products. Also, the customer would be able in our app
to compare different prices of our products such as portable chargers, phone cases and
earphones with other vendors. They would be able to compare our prices with famous online
websites such as Ali Baba and Amazon. In addition, our application will contain sections
where the customer could put any item in their wishlist to buy it later. In addition, the
customer can customize his order. For example, if a customer found a product online and it is
not available in Kuwait. We will buy this product and ship it to him with an interest. Also, if
our customer is a student, there would be special discounts in terms of spare parts prices only
but not on the workshops on the wheel. Our workshops on the wheel, will fix phones, provide
technical support and at the same time would have a different type of products in the vans.
Our project will have 3 vans that will provide service to entire Kuwait. These vans would
have one employee who is professional in this activity. Furthermore, this app would give the
customer a link to famous phone spare parts such as Endure and Anker. If there were
discounts from them, we would be able to notify him and sell to the customer. However, the
workshops on the wheel would not be the only thing. We on iFix would set up a
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communication center which would be our office. There would be one employee to
coordinate the received orders, contact suppliers and run our social media accounts. This
would be the first app in Kuwait that provides this kind of service where the customer can
choose the best to him.
Added value & its importance to the market/industry:
Behind any project, there is an added value that the business owner sees and think it would be
beneficial to the market industry, economy and the customer at the same time. In our project,
we anticipate that we will receive more orders from remote areas such as Sabah Al-Ahmed,
Jaber Al-Ahmed, and southwest Sulibekhat. These areas usually do not have near access to
phone stores whenever they needed it. Moreover, We will provide this service through our
workshops on the wheel (vans). These vans would fix phones while at the same time the
customer can browse the products we have in the van and buy it. So, we can summarize our
added value in the following. First, we will provide competitive prices comparing with other
vendors. We will have a section on our mobile app where the customer can compare the
prices to choose which one is the best to him. Second, our workshops on the wheel (vans)
which will mainly serve the people in the remote areas as we have stated before. These vans
would save the customer time, effort and money. Third, our application which will have
several sections such as wishlist, compare prices section and the customized order section
Work break down structure:
As shown in the figure, we will have an investment with 51,196 USD to start our project. We
have 3 cars in total to serve the customers across the country. Each car will cost us to
purchase 10000$ according to our research on the famous car agency Moustafa Karam. For
setting up each car, it will cost 3,333$. This means we will have extra 10,000$ for setting up
the cars. In addition, the application software design will cost us approximately 6,000$.
Moreover, we will need 4 computers to operate this business. Each computer will cost up to
1,299$. So, the total for 4 computers will be 5,196$. In addition ,The total cost for our project
will be including the storage rent, office rent, purchasing cars, hiring employees including
their salaries, car fuel and social media advisement.
Revenues and cost:
Costs and revenues are the backbones of each project. It is how the project managers evaluate
their project in a clear way to achieve the best outcome they desire. In our project, we have
an anticipated cost and revenue that were measured with reliable sources. In the beginning,
we will provide our analysis based on references that will be provided in the references
section below. In our project, we have several types. What are they?. Well, we have a fixed
cost which is our office rent, storage rent, and workers salaries. Then, the variable costs. They
consist of car maintenance and fuel. Further explanation of this anticipated cost will be
discussed in the following.
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The total cost of our company would be 38,340$. It includes storage rent, office rent, car
maintenance, salaries and fuel.
Fixed cost
storage rent
3,600$ per year
office rent
4,800$ per year
workers salaries 14,400$ per year
The storage rent would cost us 3,600$ per year. How did we come up with this price?. Well,
we have first searched on the internet about storage units in Kuwait. Then, we have narrowed
our search to the best location and price. We have contacted (packandmove) company and
asked them for their prices. The cost for one month would be 300$ per month including
shipping and packing provided by the company. Then, we have looked for an office that is
suitable for our project. We have made sure that the office is near and close to services. We
found that our office rent is 400$ per month which is the best price we could get. At the end
of our fixed costs, the worker salaries. We have decided that their wage per month would be
300$ per month and we have 4 employees.
variable costs
car maintance 2,400$ per year
fuel
9,000$ per year
Spare patrs
4140$ per year
In our variable costs, we have car maintenance and fuel each month. We have 3 cars. Each
car would have maintenance each quarter with a budget of 150$. Also, the fuel would cost
the company for the workshops on wheel 250$ per month for each car. To illustrate our
revenue, we will provide this example so the reader can comprehend in a clear approach. Our
revenue will be = each order will cost 20$ per order + the service required for the customer (
the average customer will fix a broken screen (197.7$) and will buy a screen protector(30.3
$) and protection cover (40.2$) it will equal in average 288.2 $, so when we do simple
calculation we will get 718,072$ per year approximately. Also, the average of the phone
spare parts and accessories will cost in average for 100 units that will cost 4140$. We have
obtained this cost during our research on the famous ALI baba and Amazon websites to
evaluate our project.
Cost structure method:
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Cost structure refers to the types and relative proportions fixed and variable costs that a
business incurs. In this section, we would demonstrate our fixed and variable costs so we can
present our project in a clear approach. Well, we have in iFix application fixed costs which
are storage units, workers salaries and office rent. In addition, in our variable costs, we have
initial cost with is needed only at the beginning such as software design and purchasing the
vans. Also, monthly cost such as car fuel and phone accessories, phones spare parts as well.
These are what we as iFix would pay each month. In the end, we have our annual costs. Car
maintenance and computer maintenance. As we have stated before, these costs would not be
high because we only do it each quarter of the year.
Cost structure table
Initial cost
Purchasing
Cost in $
References:
1-1-1-1
Software design
$6000
Taken from experts
1-1-1-2 Buying and $40,000
setting the vans
on the famous car agency Mustafa Karam
Fixed Cost
Purchasing
Cost in $
1-2-1-3Salaries
14,400$ per
Year
1-2-1-1 Storage
$300 per
Rent
month
1-2-1-2 Office Rent $400 per
month
Variable Costs
Cost/Year or
Costs /
Mounth
1.1.3.1
Computer
maintenance
1.1.3.1
Car maintenance
1.1.2.2
Car Fuel
1.1.2.1
phone Accessories
& phone spare
Taken from experts
We have contacted (packandmove) company
and asked them for their prices
real-estate.com
Ali baba and Amazon
$2400 per
Expert
year
$750 per
Expert
month
4140 per 100 Ali baba and Amazon
unit per
month
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parts
Project progress:
Project construction
period
Project life time :
Project startup date:
6 months
5 years
2019
Cash flow diagram:
IRR & NVP:
After a deep research and asking around including our doctor, we have chosen our MARR
6%. Why did we do that?. Well, we have contacted the national bank of Kuwait (NBK) and
they claimed that they would fund the project for 6% interest rate. So, we have obtained
these value according to Excel Solution
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MARR
6%
year 0
-51196
year 1
611,369
year 2
611,369
year 3
611,369
year 4
611,369
year 5
611365
Present worth USD 525,563.43
IRR
1094.17%
Since our IRR (internal rate of return) is significantly greater that MARR. This was obvious
according to Microsoft Excel solution. So, we conclude that our project is profitable and we
recommend to do this project. Because, IRR would tell us as well if we have a good project
or not. In the following sections, we would provide other calculations to support our
argument.
Pw, Aw & Fw calculations:
Well, according to our cash flow diagram, we have calculated our Pw, Aw and Fw in this
formula in Excel. We have transferred these formulas to Excel and built our model then
calculate the results:
Capital investment $51,196.00
Useful life
5
MARR
6%
Annual revenue
$729,290.00
Annual expenses
$117,921.00
Present Worth
$2,524,112.64
Annual Worth
$599,215.25
Future Worth
$3,377,832.09
Breakeven analysis:
Breakeven analysis would inform us wether our project would success or not. So, we would
calculate our breakeven for Pw and try to reach lower point so we don’t loss. However, if our
breakeven analysis is above the breakeven point we would success and we will accept this
project because it’s profitable. So, we would do this step in Excel and demonstrate the steps
. Note: Q would be the Average for the prices
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Annual revenue:
Solve for X= 231,3307
Annual expense:
Solve for X= 5.602
Initial cost:
Solve for X= 0
We have solved this problem and obtained our present worth in Excel as Zero. This means
this is our break even point and we should not go below it.
Capital investment $2,575,308.64
Useful life
5
MARR
6%
Annual revenue
$729,290.00
Annual expenses
$117,921.00
Present Worth
$0
Sensitivity analysis & spider plot:
Sensitivity is used to tell us what you project will start to (cry). It analysis and predict the
outcomes after changing the values of a specific factor according the Excel solution. Our
capital investment is 51,196$. Useful life is 5 years and our MARR 6%. So, we have created
the below table of change in factor in interval from (-40% to +40%). We have did it for (I,
R, E, N and MARR
Capital investment $51,196.00
Useful life
5
MARR
6%
Annual revenue
$729,290.00
Annual expenses
$117,921.00
Sensitivity analysis:
We will use the present worth equation for sensitivity analysis to find initial cost, annual
expenses and annual revenue.
(investment)
Solve for X= 4.40
if we increase the initial cost by 440% the solution will be positive which is still good for our
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project
(revenue)
Solve for X= -0.821
If we decrease the value by 82% the solution will be negative so the project will not be
profitable
(expenses)
If we increase the value of the annual expense by 45% the solution will be positive so the
project will be still profitable
Solve for X= 0.45
Next, we will present our change in factor table and the spider plot as we were asked in the
project file. It will give the reader a clear idea about our final results to evaluate our project.
We have used as we stated before (-40%,+40%) in our change in factor. Then, created our
spider plot.
Change
in factor
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
I
R
E
N
$2,544,591.0
4
$2,539,471.4
4
$2,534,351.8
4
$2,529,232.2
4
$1,295,298.7
2
$1,602,502.2
0
$1,909,705.6
8
$2,216,909.1
6
$2,524,112.6
4
$2,831,316.1
1
$3,138,519.5
9
$3,445,723.0
7
$3,752,926.5
5
$2,722,803.1
0
$2,673,130.4
8
$2,623,457.8
7
$2,573,785.2
5
$2,524,112.6
4
$2,474,440.0
2
$2,424,767.4
1
$2,375,094.7
9
$2,325,422.1
8
$1,583,000.6
4
$1,828,658.3
2
$2,067,262.1
5
$2,299,014.6
8
$2,524,112.6
4
$2,742,747.1
0
$2,955,103.6
6
$3,161,362.5
8
$3,361,698.9
6
$2,524,112.64
$2,518,993.0
4
$2,513,873.4
4
$2,508,753.8
4
$2,503,634.2
4
MARR
$2,701,366.79
$2,655,285.76
$2,610,409.75
$2,566,698.31
$2,524,112.64
$2,482,615.43
$2,442,170.91
$2,402,744.68
$2,364,303.70
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Conclusion:
In conclusion, we as a group find this project amusing and interested after we have obtained
our final results about our proposed project. We think that our project is a great. But, it needs
some changes for sure. We have first presented our cash flow diagram. Solve it for present
worth, annual worth and future worth. By doing so, we were able to comprehend our project
to understand the aspects of each yearly income. Then, we have solve in excel. After that, we
did our breakeven analysis. This helped us to know what was our breakeven point so we can
avoid it to make our project a good project. After, we have also shown our sensitivity analysis
which is our sensitive point to evaluate our project. In the end, we see this project is helpful
and added a value to us an industrial engineer. We have gained a clear vision about our future
job. However, this was not the only thing. We also were able to practice in Excel to solve real
life problem. We as a group see this project was helpful and amusing to give us a clear idea
about our major.
References:
Pack and move company (storage unit)
http://www.packandmove.com.kw/ar/#hero
Amazon websites for phones products:
https://www.amazon.com/s?k=mobile+accessories&rh=n%3A5003&ref=nb_sb_noss
Ali Baba websites:
https://www.alibaba.com/showroom/mobile-accessories.html
PROJECT FINAL REPORT
?16
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