NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 04 | Airway Delivery: A New Business Opportunity
Submission BCS
Financial plan of first year.
Submission Date & Time: 2022-01-10 12:04:57
Event Name: NMO S4 Sprint One - GIMS Greater Noida
Solution Submitted By: Anshu kumari
Assignment Taken
To achieve Break-Even within first year of operations.Case Understanding
Airways delivery is a courier company. Which has branches all over India with the target to deliver all the pin codes. However, the company board decided to open a new division of the business that is “hyper-local delivery space†and want to conduct local delivery through drones. According to the Indian rule, all flying objects in India need to take permission from DGCA. The company has all the necessary permits so, companies conducted trials beyond the visual line of sight BVLOP and teams are successful in testing deliveries from drones. The company started its venture as a short-range drone-based service because of the high purchase cost of long-range drones. The company insists various pharma, food deliveries, and other such have tested drone delivery successfully and looking forward to exploring more business ideas for cost-effective cargo deliveries. From inspiring radical innovation in this sector, the company wants to drone services to add value to the end-users. It is an extension of the company’s current services portfolios.BCS Solution Summary
To calculate break- even point . we have to calculate total cost incurred in the year and total deliveries required in the year as per any categories and prefer those drone that is cost effective and beneficial.Solution
|
Particular |
Quantity |
Cost per unit |
Total cost (year) |
|
Short-range drones |
4 |
1,25,000 |
5,00,000 |
|
Long-range drones |
1 |
4,00,000 |
4,00,000 |
|
Drone operators |
4 |
50,000(per month) |
24,00,000 |
|
Management team |
5 |
1,00,000(per month) |
60,00,000 |
|
Software |
1 |
25,00,000 |
25,00,000 |
|
Software development team |
2 |
70,000(per month) |
16,80,000 |
|
Support staff |
4 |
20,000(per month) |
9,60,000 |
|
Sharing office space with the parent entity |
|
30,000(per month) |
3,60,000 |
Note: Assuming division sharing office contributes Rs. 30,000 monthly.
Total cost (year) = 1,48,00,000
Hence, to achieve a break-even point we have to generate revenue equal to the total cost incurred.
|
Category |
Weight |
Cost (Rs.) |
Required delivery per year to achieve breakeven point |
|
A |
0.1 gram to 500 grams |
60 |
8,112 |
|
B |
501grams to 1kg |
80 |
6,084 |
|
C |
From1kg to 5 kg |
100 per kg |
4,872 |
|
D |
5.01kg to 10 kg |
110 per kg |
4,404 |
To generate revenue equal to total cost we have to conduct 23472 deliveries in this year.
To minimize the cost and increase the number of deliveries we should prefer short range drone becouse cost of long range drone is 3.2 times higher than short range drone.
Conclusion
The company can reach their break even in a year when they are using deliveries as per any categories or they can use more short- range drones because the cost of long -range drone is 3.2 times more than short- range drone. The revenue incurred from short -range drone is more than long range drone.Attached File Details
Comments
Article Type: Business Case Scenario, Case Study Solution Submission
Business Case Detail
Title: NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 04 | Airway Delivery: A New Business Opportunity
Type: Case Study
Stream: Management
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