NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 04 | Airway Delivery: A New Business Opportunity
Submission BCS
CALCULATE COST OPERATION, ALLOCATE THE BUDEGT AND PROJECTION
Submission Date & Time: 2022-02-10 10:17:16
Event Name: NMO S4 Sprint One - SB Patil
Solution Submitted By: OMKAR SANJAY ZANJE
Assignment Taken
To achieve Break-Even within first year of operations, calculation cost of operation, allocating the budgets and give the projectionsCase Understanding
We have to set up a drone delivery business using acquired 10 Cr. budget from our parent company, our goal is to achieve breakeven within the 1st year of operation, All Department Heads will work as per Leader's directives to create all supporting plans like the Business case, Marketing plan, Brand Journey projection, HR Recruitment & Training Plan, Financial planning for FY 2021-22, Plan on IT Infrastructure Including Apps, Website/s, and Management Information System etc by using provided data.BCS Solution Summary
We have analysed the cost and expenditure of the operations, we have calculated the profitable business model that we have to operate, we also have distributed our funding the overall expenditure of 7,07,19,996 and total revenue yearly 9,67,68,000 profit generate yearly 6,48,004Solution
| Operation Calculation | |||||||||||||||||||||
| Monthly Expenditures variable cost | |||||||||||||||||||||
| Expenses | Nos. | Salary per person | Total | Total carrying capacity of 1 drone | 10Kg | ||||||||||||||||
| Drone pilots salary | 80 | 50000 | 40,00,000 | Total flying range of 1 drone | 150kms | ||||||||||||||||
| management team | 5 | 100000 | 5,00,000 | Speed | 5km/15min | ||||||||||||||||
| Software team salary | 8 | 70000 | 5,60,000 | total time to complete the range | 450 mins | ||||||||||||||||
| Packaging staff | 12 | 20000 | 2,40,000 | We assume that we operate 28 days a month, 16 hrs a day in 2 shift | |||||||||||||||||
| Support staff | 12 | 20000 | 2,40,000 | ||||||||||||||||||
| TOTAL | 55,40,000 | 1 month | 28 days | ||||||||||||||||||
| 1 month | 448 | (28 days*16 hours) | |||||||||||||||||||
| fixed cost | 1 month | 26880 | (448 hour*60mins) | ||||||||||||||||||
| Expenses | Cost | ||||||||||||||||||||
| Rent and other expenses for 2 office | 60,000 | Dist. Travel by drone in a given time for 1 drone | |||||||||||||||||||
| Maintenances & Repairs | 1,50,000 | 960 | minutes | 320 | km | ||||||||||||||||
| Miscellaneous expenses | 60,000 | 26880 | minutes | 8064 | km | (0. 3 km/min *26880 min) | |||||||||||||||
| Insurance | 33,333 | ||||||||||||||||||||
| Battery, Fuel and Power | 50,000 | Total distance travel by 40 drones in a month | 8064*40 | 322560 | |||||||||||||||||
| TOTAL | 3,53,333.0 | ||||||||||||||||||||
| Total monthly expenditure | 58,93,333 | each drone can fly 160 km and we have 40 drone | |||||||||||||||||||
| So, | 6451.2 | round trips to be completed each month (17920/150) | |||||||||||||||||||
| INVESTMENTS | for 1 drone | 161.28 | 645.2/40 for 40 drone round trips for 28 days | ||||||||||||||||||
| Particular | Particulars | Cost per unit | total cost | ||||||||||||||||||
| Short Range Drones | 40 | ₹ 1,25,000 | ₹ 50,00,000 | trips to be completed in 1 day | 5.76 | 161.28/28days | |||||||||||||||
| Marketing budget | 1 | ₹ 75,00,000 | ₹ 75,00,000 | approx. 6 round trips | |||||||||||||||||
| IT Budget | 1 | ₹ 25,00,000 | ₹ 25,00,000 | 1 drone completes 6 round trips a day | |||||||||||||||||
| finance budget | 1 | ₹ 10,00,000 | ₹ 10,00,000 | ||||||||||||||||||
| operation budget | 1 | ₹ 10,00,000 | ₹ 10,00,000 | ||||||||||||||||||
| operation in new city | 1 | ₹ 30,00,000 | ₹ 30,00,000 | a drone can carry a 10kg load | |||||||||||||||||
| HR Budget | 1 | ₹ 20,00,000 | ₹ 20,00,000 | so, the total load carried by the drone each day | 60 | (10*6 trips) | kg | ||||||||||||||
| emergency funds | 1 | ₹ 5,00,000 | ₹ 5,00,000 | therefore load carried by all 40 drones per day | 2400 | (40 drones*60) | kg | ||||||||||||||
| Long Range Drone | 1 | ₹ 4,00,000 | ₹ 4,00,000 | for a month (28 days) | 67200 | (2400*28 days) | kg | ||||||||||||||
| Software | 1 | ₹ 25,00,000 | ₹ 25,00,000 | ||||||||||||||||||
| TOTAL | ₹ 2,54,00,000 | ||||||||||||||||||||
| PLANS | |||||||||||||||||||||
| category of courier | |||||||||||||||||||||
| PLANS | A | B | D | E | |||||||||||||||||
| WEIGHT | 0.1 g to 500 g | 501 g to 1 Kg | 1.01 Kg to 5 Kg | 5.01 Kg to 10 Kg | |||||||||||||||||
| PRICE | ₹ 60 | ₹ 80 | ₹ 100 | ₹ 110 | |||||||||||||||||
| DRONE CARRY 10KG DURING SINGLE FLIGHT | |||||||||||||||||||||
| No. of item drone can delivery | 20 items of each 500 g | 10 items of 1 kg each | 2 items of each 5kg | 1 item of 10kg | |||||||||||||||||
| total amount in one trip | ₹ 1,200 | ₹ 800 | ₹ 1,000 | ₹ 1,100 | |||||||||||||||||
| total amount in 6 trips | ₹ 7,200 | ₹ 4,800 | ₹ 6,000 | ₹ 6,600 | |||||||||||||||||
| total amount by 40 drone | ₹ 2,88,000 | ₹ 1,92,000 | ₹ 2,40,000 | ₹ 2,64,000 | |||||||||||||||||
| total business for a month (28 days) | ₹ 80,64,000 | ₹ 53,76,000 | ₹ 67,20,000 | ₹ 73,92,000 | |||||||||||||||||
| Total monthly expenditure | ₹ 58,93,333 | ₹ 58,93,333 | ₹ 58,93,333 | ₹ 58,93,333 | |||||||||||||||||
| monthly profit | ₹ 21,70,667 | ₹ -5,17,333 | ₹ 8,26,667 | ₹ 14,98,667 | |||||||||||||||||
| by the above calculation, we can analyse that Category A type of courier is profitable and can help to achieve a breakeven point | |||||||||||||||||||||
| The projection for 12 months | |||||||||||||||||||||
| INVESTMENT | ₹ 2,54,00,000 | ||||||||||||||||||||
| total yearly operational cost | ₹ 7,07,19,996 | ||||||||||||||||||||
| total yearly revenue type A | ₹ 9,67,68,000 | ||||||||||||||||||||
| total yearly profit | ₹ 6,48,004 | ||||||||||||||||||||
| Budget for the whole division | ₹ 10,00,00,000 | ||||||||||||||||||||
| Capital used | total expenditure from budget 1st-month expenditure + investments | ₹ 3,12,93,333 | |||||||||||||||||||
| Capital remaining | total budget - (1st month expenditure + investments) | ₹ 6,87,06,667 | |||||||||||||||||||
| conclusion | |||||||||||||||||||||
| 1 | The company will go with plan A as it is a profitable plan | ||||||||||||||||||||
| 2 | Our company will operate in 2 different cities each city will have 20 drones and 40 operators which will work in 2 shifts. i.e. 16 hr operation a day for 28 days a month | ||||||||||||||||||||
| 3 | The company will set up the office and warehouse in the city centre and will operate within the radius of 25kms to be in profitable business | ||||||||||||||||||||
| 4 | The company will operate with Plan A of pricing (1 to 500g for 60Rs) | ||||||||||||||||||||
| 5 | The company will partner with ZOMATO, DONZO, SWIGGY, NETMEDS, 1mg, FLIPKART, AMAZON, etc are the potential partners | ||||||||||||||||||||
| 6 | Remaining capital can be used for further expansion of business | ||||||||||||||||||||
Conclusion
1 Company will go with plan A as it is a profitable plan 2 Our company will operate in 2 different cities each city will have 40 drones and 80 operators which will work in 2 shifts. i.e. 16 hr operation a day for 28 days a month 3 Company will set up the office and warehouse in the city centre and will operate within the radius of 25kms to be in profitable business 4 Companies will partner with ZOMATO, DONZO, SWIGGY, NETMEDS, 1mg, FLIPKART, AMAZON, etc are the potential partners 6 Remaining capital can be used for further expansion of businessAttached File Details
View Attachment file (NMO OMKAR ZANJE.pptx)Video
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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
Participant
I am a student of MBA and I am highly passionate about management.
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