Project Evaluation, Planning, and Management Important Question
Assume you are the new project manager of ‘Artisle’, well-known machine parts assemble company in Bangladesh. The company is importing and manufacturing different machine parts and assemble them to sell in the market. In a different scenario, you are supposed to handle and take decisions to guide the company. The scenarios are as follows.
Question No. 1: The article is going to enter into a new era of production. They are starting a plastic molding spinoff to produce different homeware. They have given the spinoff a name as ‘Article Plastics’. Explain your views about the advantages of such steps taken by the company.
Question No. 2: In the current perspective of Bangladesh, Article Plastic should be critically analyzed. Show the position of the spinoff on BCG Matrix, General Electric’s Stoplight Matrix, and McKinsey Matrix.
Question No. 3: Explain the business environment of Article Plastic from the perspective of Bangladesh.
Question No. 4: Article Plastic has published the annual sales of their products. You are to decide the following two years’ production volume. For this question, you may consider there is no product mix. The sales are in millions.
Determine the production forecast for the year 2022 in different techniques.
i) Trend Projection Method.
ii) Exponential Smoothing Method (Consider α = 0.XX, XX is the last two non-zero digits of your student ID).
iii) Moving Average Method (Consider n = 5).
iv) Suppose we have already reached the end of 2022 and get the actual sales volume as 26.0 million products. Choose the forecasting method suitable for Article Plastic.
v) It is observed there is a sudden fall in sales from 2020 onward. Please explain the business environment that caused this change to convince your investors.
Question No. 5: Article Plastic investors are agreed to have a plan to invest 100 million BDT per year in total to the company since 2003. They are supposed to continue to invest until 2012. They want the management should run the company only with the cash inflow from the sale onwards. They wish to get their NPV should be zero at least or before 2021. In this circumstance, find the following:
i) the Net present value of the investments (Assume rate of interest is 12.XX%, XX is the last two non-zero digits of your student ID). Assume we are in 2003 now.
ii) If we are at 2021, find the net present value of the investments (Assume rate of interest is 12.XX%, XX is the last two non-zero digits of your student ID).
iii) If we consider that NPV at 2021 is zero then find the IRR of your company. The cash inflows in the year 2013 to 2021 are 134.00, 132.50, 131.37, 130.53, 179.90, 195.80, 205.20, 132.00, and 130.60 million of BDT respectively.
iv) Government has taken a decision to plant a coal power plant to facilitate the citizen with electricity on the same location of Article Plastic. The government has offered Article a lamp sum of BDT 500 million for evacuating the space. For simplicity, consider the liquidation of Article Plastic can give 500 million BDT. The operating cost of the company was BDT 80 million including the salary of the workers. On the other hand, It will cost the government BDT 1000 million for building the power plant. Thousands of people will be getting electricity facilities if the plant would be built up. Finally, the government estimated 7000 families will be getting electricity. Roughly their electric bill will be on an average BDT 1500/- for each family. Perform the social cost-benefit analysis and explain the social cost and befits if the power plant is built.