PROJECT SCENARIO

 

In about seven weeks, you will be heading home for winter break. A local not-for-profit (NFP) organization (Funtime) is planning to participate in an annual winter carnival as an annual fund raising project and has offered you an opportunity to operate its booth. Please refer to the NFP organization as Funtime throughout the project.

 

WHAT WILL YOU BE SELLING?

 

In this booth, you will be selling a single food item highly popular at winter carnivals and festivals known as a “beaver tail”.  Basically, it is fried dough that is prepared in batches ahead of time and fried using a hot oil fryer as orders are received from customers. Customers may have options to add various toppings (such as fresh fruit, fruit preserves, and chocolate sauce). You may consider what topping(s) you are willing to offer and extra topping costs should be included in the selling price of your beaver tail.

 

During the operation, you will be responsible for purchasing all materials and ingredients needed, producing and selling the beaver tails as well as hiring all of your help if needed.

 

HOW LONG IS YOUR OPERATION?

 

The carnival will run for five days from 4:00 pm – midnight local time.

 

WHAT WILL OPERATING EXPENSES INCLUDE?

 

A number of operating expenses will be incurred during the five days. First, 12.5% of your gross sales revenue will be charged by the Wintertime Amusement Company (the operator of the winter carnival who provides the booth space). Second, 12.5% of your gross sales revenue will go to Funtime as its commission for providing you the booth including lighting and utilities. Third, Funtime will provide its frying equipment to you at a cost of $250 per day. This fryer equipment can fry eight beaver tails at a time but only one fryer can be used due to the size of the booth.  The rental charge does not include the oil needed to fry the beaver tail.

 

 

 

MARKET

 

In past years, annual attendance at the carnival is approximately equal to 453,550 over the five days of the carnival.  Sales of beaver tails by all of the various vendors including the booth operator on behalf of Funtime has historically been approximately 10% of the carnival attendance, so it is a very competitive market for this short term.

 

 

PRODUCT PRICE

 

You will need to perform market research to determine an appropriate price for your beaver tails.

 

 

GETTING STARTED ON THE ANALYSIS

 

Your analysis will require you to think like an entrepreneur, deal with ambiguity, and make informed judgments as you determine the practicality and financial viability of this business venture.

 

To do so, you will need to determine all the ingredients of the product to make and related materials to sell it; understand the production process to make the product and get it ready for sale; and identify and research all other costs (direct or indirect) associated with this undertaking.

 

Thus, as you proceed, you will need to decide what data to collect (e.g., various costs, set up and production times, capacity to make enough product to make a profit) and where and how to find this information. In addition, you will need to organize, analyze, and communicate information in a way that makes sense to you and to others (in particular, the reviewer – your instructor). For example, you may need to recruit one or more associates to work with you to staff the booth, produce the product, and sell it.

 

PROJECT REQUIREMENTS

 

1. (5 points) Determine your financial goal for this five-day venture. Specifically, how much money do you expect to make on a net basis? The booth will need to operate for 40 hours so if you have an opportunity to take a temporary job for a week over winter break, you should expect to net at least as much as your net earnings would be for the week. Keep in mind you will also have to set up the operation before you open up for business as well as to close it down after operating hours each day.  Briefly describe how you established this goal.

 

 

1. (15 points) Briefly describe the product (that is, is it just a beaver tail or will you include additional toppings) you will sell at the carnival as well as all of the costs that you will likely incur during the week. Identify and define an appropriate cost driver for each cost. Classify each cost as variable, fixed, or mixed for the carnival time horizon. For mixed costs, if any, be sure to identify the variable and fixed components using linear regression or the high–low method. Please note that it is highly unlikely you will find any mixed costs. Use the format below.

 

 

Cost Item	Cost Type (Fixed, Mixed, Variable)	Cost Driver (if applicable)	Explanation if needed
E.g. Equipment  Rental

 

To find these costs, you will need to perform research to determine the actual costs of your beaver tail production, including direct materials, direct labor, and overhead costs involved in making your product. In addition to the information provided above, document your sources for each of these costs. Be sure to list every ingredient used in making the beaver tail along with topping(s) ingredients, if offered, using the above format.

 

Note: You may choose to do some “window” shopping to verify prices and/or actually make the product to verify the quantities of the ingredients to make a batch of fried beaver tails.   Alternatively, there are YouTube videos that can help you do this. For example, see  https://youtu.be/1LeRh_DgYhU – be sure to note how many beaver tails are made from the recipe in this video (that is, a batch) so you can estimate the direct (that is, material and labor) costs to produce a beaver tail.  Also, keep in mind what other items you will need to prepare and serve a fried beaver tail to a customer.

 

1. (20 points) Using the cost information you found in part B, classify these costs into the production costs of direct materials, direct labor, and overhead and selling and administrative costs for a beaver tail. Use the formats below in this section. An example of each type of cost is provided. You will first need to determine how many beaver tails you can produce in a batch and then determine the cost per unit = that is, the beaver tail.

 

Direct Material (per batch of X Beaver tails and per beaver tail produced)

Cost Item	Quantity per Batch	Cost per batch ($)	Cost per unit ($)	Cost Type	Source of cost estimate
Eggs	16	$ 3.00	$3.00/X	Variable	URL…….

 

Direct Labor (per batch of X beaver tails and per beaver tail produced)

Cost Item	Hours  per Batch	Cost per hour	Cost per unit ($)	Cost Type	Source of cost estimate
Hired labor	.10	$10/hour	$.10/X		URL……

 

 

 

 

 

Production Overhead

Cost Item	Overhead Production Cost	Cost Type	Source of estimate
Fryer Equipment	$1,250	Fixed	Project information

 

Selling and Administrative Cost

 

Cost Item	Cost	Cost Type	Source of estimate cost
Booth Rental	$.125*Your selling price*units sold	Variable	Project Scenario

 

 

1. (5 points) Perform market research to estimate the appropriate price to charge for a beaver tail. Keep in mind that your chosen selling price will be partly a function of your financial goal and partly market-determined (i.e., the price needs to be realistic competitively). State your price per beaver tail and the source(s) you used to establish the price.

 

Selling Price per beaver tail____________ Source(s)____________________

 

1. (35 points) To ensure that this business venture is a viable idea and not a waste of your time, you need to perform a CVP analysis. This analysis provides the basis for assessing the reasonableness of this business opportunity. Using your answers for part B through D, determine the following:

 

1. The contribution margin per unit of your product? ____________
2. The contribution margin ratio? ________________
3. Total fixed costs? __________________
4. Sales volume in units at the break-even point? ________________
5. Sales revenue in dollars at the break-even point? ______________
6. Sales volume in units required to reach your financial goal? ___________
7. Sales revenue in dollars required to reach your financial goal? _________

 

Provide supporting documentation for your analysis in the form of a contribution spreadsheet using the format below

 

 

 

 

Contribution Income Statement Format for Cost-Volume-Profit Analysis

 

Item	Price or cost per unit	No. of Units	Total
Revenue
Variable costs (list each cost)
Contribution Margin
Fixed Cost (list each cost)
Operating Income

 

 

1. (10 points) In no more than two pages, summarize your results and calculate your operating income per hour to determine if this opportunity is worth your time.

 

1. (10 points) Write a brief (1page) memo addressed to the Executive Director of Funtime to advise the director whether or not you will accept the opportunity and why. This memo should be essentially an executive summary of the project. (E.g., Mr. Feelcold, Executive Director, Funtime, Frozen Lake, MN 55805).

 

Your Final Report consisting of Sections A through G above.  Please note: your final report should not exceed 10 pages including your narratives and tables or exhibits.   You may use this project scenario as a template to organize and submit your project report.

 

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Introduction

Energy Alternatives Fracking

Energy Alternatives Fracking, or hydraulic fracturing, is a process used to extract natural gas from once unreachable shale rock layers deep in the earth. To release the natural gas, highly pressurized fracking fluids (water mixed with various chemicals and sand) are injected, via steel pipe, into the ground to create cracks or fractures. This releases gas that flows to the surface to be collected in wells. Environmental concerns associated with fracking include water use, toxic chemicals, health concerns, surface and ground water contamination, soil contamination, air quality, and waste disposal. One of the most important aspects of any energy policy is energy conservation. As consumer demand for oil drops, prices decline; the time the oil can be relied on is extended. To help reduce oil use, government regulations, NHTSA (2014), have required greater fuel efficiency in cars through the creation of the Corporate Average Fuel Economy (CAFE) standards. Congress has also required the phasing out of incandescent light bulbs in favor of the more energy efficient compact fluorescent bulbs. Like many new technologies, the upside of the compact fluorescent’s energy saving capacity is countered by the downside that compact fluorescents require the toxic chemical, mercury, for their production. There are many alternatives to using petroleum and coal for energy, but each comes with a unique set of problems. Most new technologies, like solar and wind power, are very costly to start up. Nuclear energy has its own unique drawbacks.

Using nuclear energy is attractive to many because the technology is already in place, and it can generate large amounts of electricity from one plant. But the risks associated with nuclear energy are high. For example, there is no current solution as to how to deal with nuclear waste. No matter how carefully a nuclear plant is built and maintained, there is always the risk of an accident. Further, nuclear plants can also be a target for terrorist activity, and the nuclear waste can be used to power nuclear weapons.

It is certain that we will see the emergence of new energy technology, but it seems unlikely at this point that there will be one simple answer. Wind, solar, and geothermal energy are useful in certain geographic areas, but it will take many different solutions to fulfill the energy demands of the worldwide population.

References

U.S. Energy Information Administration (EIA). (2014). Energy in brief. Retrieved from http://www.eia.gov/ energy_in_brief/article/major_energy_sources_and_users.cfm

National Highway Traffic Safety Administration (NHTSA). (2014). CAFE – Fuel economy. Retrieved from http://www.nhtsa.gov/fuel-economy

Demonstration of Proficiency

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

• Competency 1: Assess basic environmental health principles, theories, and issues.
  • Assess the economic issues associated with renewable energy technology.
• Competency 2: Analyze the impact of contaminants in the environment to human health.
  • Analyze the risks to human health associated with renewable energy technology.
• Competency 3: Apply personal and professional decisions based upon an understanding of environmental risks.
  • Illustrate the positives associated with renewable energy technology.
  • Illustrate the negatives associated with renewable energy technology.
• Competency 4: Communicate effectively in a variety of formats.
  • Write coherently to support a central idea in appropriate format with correct grammar, usage, and mechanics.

Preparation

Research a specific renewable source of energy.

Instructions

The purpose of this assessment is to evaluate alternative energy sources and to understand that there are positives and negatives to the alternatives.

To begin this assessment, research a specific renewable source of energy. Then, in a 3–4-page report, outline the pros and cons of this method of energy production. To build your argument and support your evaluation, address the following:

• Identify and analyze the economic considerations (such as the cost per kilowatt for large-scale renewable energy source, costs of construction, and so forth) of using this method of energy production.
• What are the environmental benefits of this energy source?
• What are the environmental downsides, if any, to this renewable energy technology?
• Analyze the risks to human health associated with this technology.
• What conclusions have you reached with regards to this topic, and why?

Additional Requirements

Use the APA Paper Template (linked in Resources: Energy Sources) to format your report.

• Written Communication: Written communication should be free of errors that detract from the overall message.
• Length: This report should be 3–4 pages in content length. Include a separate title page and a separate references page.
• Font and Font Size: Times New Roman, 12-point, double-spaced. Use Microsoft Word.
• APA Formatting: Resources and in-text citations should be formatted according to the current APA style and formatting.
• Number of Resources: You are required to cite a minimum of two scholarly resources. You may conduct independent research for resources and references to support your report. Provide a reference list and in-text citations for all your resources, using APA format. You may cite texts and authors from the Resources.

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The assignments are a series of papers that are based on the same case, which is located in the XanEdu tab in the course shell. The assignments depend on one another. In this assignment, you will create a risk management plan. You have a budget of $100,000 and a timeline of six (6) months for the plan. Please refer to Figure A-1, Risk Management Plan Template, from Appendix A of the Hillson & Simon text to create the plan.

Write an eight to ten (8-10) page Risk Management Plan paper in which you:

1. Prepare the Scope and Objectives of the Risk Management Process section of the Risk Management Plan based on the facts presented in the case study.
2. Determine the project size, based on the facts presented in the case study, and provide justification based on Figure 3-4, Example Project Sizing Tool (Chapter 3 of the Hillson & Simon text).
3. Select the risk tools and techniques and complete the Risk Tools and Techniques section of the Risk Management Plan for both the qualitative and quantitative aspects of the project. Provide a rationale for the selection.
4. Develop the Risk Reviews and Reporting section of the Risk Management Plan based on the project size previously determined.
5. Define the Probability and Impacts section of the Risk Management Plan and justify the values assigned.
6. Define the Risk Thresholds section of the Risk Management Plan and justify the values assigned.
7. Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Apply the concepts of risk management in a project context to develop an appropriate risk management plan as a key element of the project management process.
• Survey the project sponsor, stakeholders, team membership and key decision influencers to develop a qualitative assessment of the project risks and apply the results to further refine the project risk management plan.
• Create a schedule of project risks and opportunities appropriate to the organization.
• Develop a project risk plan that can be incorporated into this schedule.
• Create a schedule of project risk reviews appropriate to the organization.

Click here to view the grading rubric for this assignment.

 

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