NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 04 | Airway Delivery: A New Business Opportunity
Submission BCS
Airdrop delivery new business opportunity
Submission Date & Time: 2022-02-10 09:16:02
Event Name: NMO S4 Sprint One - SB Patil
Solution Submitted By: Niranjan Kamalakar Tambore
Assignment Taken
Financial Management for Airdrop DeliveryCase Understanding
Airdrop Delivery is courier based company. Which has a business all over India. Company has decided to venture into 'Hyper Local Delivery space' and want to conduct local delivery through drones. The company has all the permissions from Director General of Civil Aviation (DGCA). For the successful kick start of business, the company has conducted test deliveries trials to check beyond the visual line of sight. The company has performed several successful beta testing deliveries for initial participants such as food delivery and local delievery campanies. We need to prepare a budget which can help company reach breakeven within first year of its operation and can expand in future.BCS Solution Summary
The budget for the year 2021-22 is 10 crores. Company need to make certain number of revenue to reach break even point. Solution also contains the expansion plan of drone facilities. We are providing all the essential budget and clear financial support to the organization. We have to achieve breakeven in upcoming year that’s why we concluded targeted financial budget. Our vision is to speed up deliveries in just a minutes and we are processing on it.Solution
Finance department has planned following concepts
Financial planning :
Financial planning shows that maintaining cash flow for business technology elements (budgeting) , keeping records of actual spend by business technology elements and compare actual cost and planned cost to identify and suggest correct decisions. Allocation of business units and capabilities as service fees.
Cost per department :
Marketing cost :-
Airdrop delivery planned to expand a drone service all over India. For that we need to focus on customers trust and for that we will focus on advertising and mainly focus on digital marketing. So, in every quarter company increased 2% more than previous quarter for advertising and digital marketing.
For that we assume the amount of Rs. 40,25,000/-
IT Cost :-
For IT department we will hire some experts who has knowledge of operating drones, and some technicians who will help to build and develop good software. For that we planned a budget amounted to Rs. 25,00,000/-
HR Cost :-
The main focus of Airdrop Delivery is to build a good and trustable brand in delivery business which can compete with leaders in the segment. We will make sure that build right structure and will grow as we planned. For building a good relation with customers we need to hire some staff who will have communication with customers if they have any query.
Therefore, we assume that our budget can go upto Rs. 1,69,00,000/-
Revenue :
Airdrop Delivery is a courier company involved in business to deliver parcels using drones. The source of income is delivery of initial participants such as food delivery and local deliveries by use of drones.
Price table for delivery charges
|
Category of courier |
Courier weight |
Price |
|
A |
0.1 gram to 500 grams |
60 Rs. |
|
B |
501 grams to 1 Kg |
80 Rs. |
|
C |
1.01 Kg to 5 Kg |
100 Rs./Kg |
|
D |
5.01 Kg to 10 Kg |
110 Rs./Kg |
Sales Target
|
Category of Drones |
Unit Booking (Min) |
Daily Collection |
Monthly Collection |
Yearly Collection |
|
A |
1,000 |
60,000 |
15,00,000 |
1,80,00,000 |
|
B |
900 |
72,000 |
18,00,000 |
2,16,00,000 |
|
C |
700 |
70,000 |
17,50,000 |
2,10,00,000 |
|
D |
400 |
44,000 |
11,00,000 |
1,32,00,000 |
|
Total Revenue Collection |
7,38,00,000 |
|||
Financial Budget For the Year 2021-22
|
Particulars |
Amount |
Amount |
|
Income |
|
|
|
Sales |
|
7,38,00,000 |
|
|
|
|
|
[-]Expenses |
|
|
|
Event Management |
10,00,000 |
|
|
Salary |
1,44,00,000 |
|
|
Rent |
3,60,000 |
|
|
Software development team expense |
25,00,000 |
|
|
Electricity & Telephone Expenses |
1,20,000 |
|
|
Drones |
18,00,000 |
|
|
Insurance of drones |
5,00,000 |
|
|
Maintenance of drones |
1,50,000 |
|
|
Computer & maintenance |
25,00,000 |
|
|
Legal Expenses |
20,00,000 |
|
|
Training Expenses |
25,00,000 |
|
|
Advertisement & marketing |
40,25,000 |
|
|
Total |
|
3,18,55,000 |
|
Particulars |
Amount |
|
|
|
|
Total Income |
7,38,00,000 |
|
Total Expenditure |
3,18,55,000 |
|
|
|
|
Profit |
4,19,45,000 |
Conclusion
Let’s assume average number of orders received daily is increased by 10% to 20% in every 6 months, more deliveries should be done by short range of drones as they are more which business will achieve Break-even within 1st year of operations. From the given information the company become profitable and the budget shown the company will not have losses. The profit which company is going to make that we can invest for the expansion of business.Attached File Details
View Attachment file (Finance.pdf)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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