{"id":182,"date":"2010-06-23T16:49:07","date_gmt":"2010-06-23T21:49:07","guid":{"rendered":"http:\/\/lyle.smu.edu\/emis\/design\/?p=182"},"modified":"2010-06-23T16:49:07","modified_gmt":"2010-06-23T21:49:07","slug":"tuning-in-on-the-market-the-financial-impact-of-project-delays-in-product-development","status":"publish","type":"post","link":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/2010\/06\/23\/tuning-in-on-the-market-the-financial-impact-of-project-delays-in-product-development\/","title":{"rendered":"Tuning-In on the Market: The Financial Impact of Project Delays in Product Development"},"content":{"rendered":"

\"logo_microtune\"<\/a>Client: <\/strong>Microtune Inc.
\nTeam<\/strong>: Andrew Bass, Chris Ginder, Shan Zaidi
\nFaculty Advisor<\/strong>: Dr. Siems
\nYear<\/strong>: 2009
\nDocuments<\/strong>: Final Report (Word<\/a>), Final Presentation (PPT<\/a>)<\/p>\n

The problem our team faced was how to account for the financial impact of project delays in product development. Microtune had a product in the market and a new product was under consideration to replace the existing product. The goal was to determine the value of the new product to the firm. In order to generate a cost\/benefits analysis for the implementation of a product we developed a series of models in Excel to account for various uncertainties.<\/p>\n

A beta distribution was generated for the implementation process and we were able to generate a most likely scenario for the availability time of a new product. We noticed there would be financial advantages to selling a new product, but also realized that costs must be taken into account. A Monte Carlo simulation was used with 15,000 iterations to determine the most likely cost for the product implementation.\u00a0 Our team also developed a replacement function which we used to approximate the rate of cannibalization for product #2. The next step was to generate a sales data sheet to get a picture of the financial implications of the product cannibalization process. We were given a range of parameters which we displayed in three sales data scenarios: best case, mean result, and worst case. The sales datasheets allowed us to see revenue and profit for a ten year horizon.<\/p>\n

In the net present value calculation, the monthly profits were discounted at a rate we calculated in the financial portion of the model. We were able to generate a matrix containing nine possible income possibilities. We noticed that under good conditions the implementation can be highly profitable; however, if things go wrong then the company can lose money on the project. All of the scenarios are reliant on user definable parameters, but given accurate data the model can produce a comprehensive picture of the possible project outcomes.<\/p>\n","protected":false},"excerpt":{"rendered":"

Client: Microtune Inc. Team: Andrew Bass, Chris Ginder, Shan Zaidi Faculty Advisor: Dr. Siems Year: 2009 Documents: Final Report (Word), Final Presentation (PPT) The problem our team faced was how to account for the financial impact of project delays in … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46,5,17,26,32],"tags":[],"class_list":["post-182","post","type-post","status-publish","format-standard","hentry","category-economic-decision-analysis","category-finalreport","category-presentation","category-statistics","category-usa"],"_links":{"self":[{"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/posts\/182"}],"collection":[{"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/comments?post=182"}],"version-history":[{"count":0,"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/posts\/182\/revisions"}],"wp:attachment":[{"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/media?parent=182"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/categories?post=182"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/s2.smu.edu\/emis\/design2017\/index.php\/wp-json\/wp\/v2\/tags?post=182"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}