Hello,

This is for a for an Aviation/Aerospace System Analysis course. Here are the instructions:

Practical Exercise: Cost-Benefit Analysis

Consider, hypothetically, that you have already graduated with your Bachelor of Science (BS) degree and you are employed as the Warehouse Operations Manager at a medium-sized, aviation-related company that has 400 employees. The company sells aircraft electronics, airframe and power plant parts, and equipment to private, corporate, and commercial airline customers.

For this practical exercise activity, consider that a system request for a new Inventory Management System (IMS) had been submitted to you by one of your supervisors, which you forwarded to the company’s Approval Committee for consideration. During the analysis that was conducted by the Approval Committee, it was discovered that companies can experience considerable savings when implementing such a system. Large enterprises like Proctor & Gamble have implemented an IMS and saved as much as over a billion dollars in one year.

After the system request had been thoroughly analyzed by the Approval Committee, it was selected to move forward and you are serving as the project sponsor/manager of the project. Feeling confident in your abilities as a result of the training in the SDLC process methodologies that you received ‘back in the day’ as a student at Embry-Riddle Aeronautical University (ERAU), you volunteered to serve as the project sponsor/manager.

You have five resources (team members) working with you on this project. One employee has been loaned to the team from the Information Technology (IT) department, one from the Finance Department, one from the Human Resources (HR) Department, and two are outside consultants that will be brought in at the starting point of the Analysis phase to assist with their process modeling and data modeling skill sets and experience.

At this point in the project, you are in the middle of conducting a Feasibility Analysis. You have already conducted a Technical Feasibility analysis and determined that the prospective users have a reasonable familiarity with the level of information technology and they could easily be trained, and the contract IT support unit is capable of installing, managing, and maintaining the inventory management system. Since you determined that it was technically feasible to implement the system, you will now proceed to the next step of the Feasibility Analysis in which you will conduct a Cost-Benefit Analysis.

Cost-Benefits Analysis Requirements

Create your Cost-Benefit Analysis with a Simple Cash Flow Methodology utilizing Microsoft Excel®. Before you begin to work on this activity, refer to the Cost-Benefit Analysis example in the textbook that uses the Simple Cash Flow Methodology.

Utilize this Cost-Benefit Analysis Data Sheet (XLSX) template to create the Cost-Benefit Analysis. Calculate the ‘missing’ data values and place them in the appropriate spreadsheet cells. You must utilize Excel formulas to calculate the missing data values in the cells. For example, to calculate the data value in cell E4, you could use a formula such as one of the following examples:

• =C4*D4+D4
• =(1 + 5%) * D4
• =(1 + C4) * D4

Your Cost-Benefit Analysis must address the following requirements:

• Submit data for a 5-year timeframe (2019-2023)
• Do not provide any decimal places in your data values
• Calculate and enter these missing data values in your spreadsheet:
  • Benefits
    • Increased hours of data entry and order fulfillment
    • Increased inventory balance and decreased stock-outs
    • Increased inventory turnover ratio
    • Increased warehouse organization
  • Total Benefits
  • Total Development Costs
  • Operational Costs
    • Hardware
    • Software
    • Operational Labor
  • Total Operational Costs
  • Total Costs
  • Total Benefits – Total Costs
  • Cumulative Net Cash Flow
  • Return on Investment (ROI)
  • Break-Even Point (BEP)
• Submit your Cost-Benefits Analysis in XLSX file format.

Here is the grading rubic:

MGMT 321 1.3 Practical Exercise Rubric

Attached is the template.