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Otacuschez Café’s SMS Order System Analysis Report

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Updated: Jan 28th, 2021

This is a systematic analysis of the Otacuschez case which entails an SMS order system… The company purposes to connect the bookstore/library to the coffee café so that the library users can use the café. The project is aimed at making it possible to request orders by the SMS system. The clients are allowed to enjoy the services of the library and a cafeteria without having to greatly alter their schedules hence saving on time and money as well (Roth, 2008).

Activity Immediate predecessor Optimistic
(a)
Most probable (m) Pessimistic
(b)
T Variance
x2
A 4 5 6 5
B 2 4 6 4
C A 5 6 7 6
D A 2 9 10 8
E B 2 4 6 4
F A,C 1 2 3 2
G A,D 6 8 10 8
H A,C,F 6 8 10 8
I A,C,F,H 3 4 5 4

The project is expected to be completed within 25 days.

Critical Path

ID Name Duration Start Finish Predecessors
1 Scope 3 days 5/25/2012 8:00 5/28/2012 12:00
2 Determine project scope 5 day 5/25/2012 8:00 5/25/2012 12:00
3 Produce the project schedule 5.days 5/25/2012 13:00 5/30/2012 12:00
4 Staff the project 0 days 5/28/2012 12:00 5/28/2012 12:00
5 Launch the project 0.days 5/28/2012 12:00 5/28/2012 12:00
6 Buy hardware Requirements 4.days 5/28/2012 13:00 6/1/2012 12:00
7 Installation 4. days 6/1/2012 6/5/2012 1
8 Conduct needs analysis 5.days 5/28/2012 13:00 6/4/2012 12:00
9 Programming 6 days 5/30/2012 13:00 6/5/2012 17:00 1
10 Prototype for feasibility and discovery 1.day 6/11/2012 8:00 6/12/2012 17:00
11 Review recommendations with management 1.day 6/5/2012 6/5/2012
12 Design 8. days 5/28/2012 13:00 5/5/2012 12:00
13 Development 8 days 5/5/2012 5/13/2012 1
14 Test code 2. days 6/5/2012 13:00 6/7/2012 12:00 2
15 System testing 8. days 6/7/2012 6/15/2012 3
14 Training 4.days 6/715/2012 13:00 6/19/2012 12:00 4
16 Post Implementation Review 3.days 6/19/2012 12:00 6/22/2012 12:00
17 Create software maintenance team 0.days 6/19/2012 12:00 6/19/2012 12:00
18 Development complete 0.days 6/19/2012 12:00 6/19/2012 12:00 4

PERT Chart

PERT Chart

Path Duration

Path 1; D, G, I= 8+8+4=20 days

Path 2; A, C, F, H, I= 5+6+2+8+4=25 days

Path 3; B, E, I=4+4+4=16 days

The shortest Period to complete this project is therefore 16 days while the longest would be 25 days.

Cost-Benefit Analysis

Equipment/Installation

Cost in SR
10 Network Ready computers with supporting software 6000
1 server 9000
1.Router 3000
Cabling and Installation 7000
Facilities 3000
Utilities 4000
TOTAL 32000

Other Development Costs

Expense category Amount
Salaries/Wages 160,000 SR
Training 5,000 SR
Support staff 10,000 SR
Traveling/miscellaneous 50, 000 SR
Licenses 10,000 SR
Total 235,000SR
Wages Cost
Team member Salary/wage for a project
Project leader 30,000 SR
Senior systems analyst 20,000 SR
Systems analyst 15,000 SR
Programmer analysts 15,000 SR
Programmers 40,000 SR(10,000 X 4)
Systems programmers 40,000 SR (10,000 X 4)
Total salaries and wages 160,000 SR
OPERATING COSTS
Recurring expense Amount
Connectivity 15,000 SR
Equipment maintenance 20,000 SR
Programming 20,000 SR
Help desk 20,000 SR
Total recurring costs 75,000 SR
SAMPLE BENEFITS
Benefit/cost saving Amount
Increased efficiency in order 50,000 SR
Increase in customer trust Intangible
Increase in Marketing department 100,000 SR
Total annual benefits 150,000 SR

Net Present Value

NPV= Rt/(1+i)t

t=Cash flow time

i=Discount rate

Rt= Net cash flow rate

In this case, the Net cash flow is found by finding the difference between the outflow and the inflow which is, 342, 000-150,000=192, 000 SR.

t -stands for the respective year while, like 1, 2, 3

i-which is the discount rate is found by dividing the inflow by the outflow. As in,

150,000/342,000=0.44

Year 0

NPV= -342000/(1+0.44)0 = -342000

Year 1

NPV=192000/(1+0.44)1= 133333.333

Year 2

NPV=192000/(1.44)2= 92592.592

Yeah 3

NPV=192000/(1.44)3=

The Net present value is more than zero, which is an indication that the business is viable.

Pay Back Period

This is the period that the made investment would take to ‘repay’ the money that has been invested in the business. Investments with shorter payback periods are preferred over those with longer payback periods. In this case, it would be, 342,000/150,000=2.28 years.

Discounted Pay Back Period

150000*3-133333.333-92592.592-

=

BBP=159773.664/64300.411*12=

Internal Rate of Return

It usually indicates the growth that is generated by a given project. A higher rate signifies the stability of that particular project hence it is preferable. It is the value of the discount rate whereby the negative cash flow is equal to the positive cash flow. It is an indication of efficiency, quality, and productivity.

Formula

= sum_^ frac{(1+r)^} = 0

Year(n) Cash flow
0 -342000
1 150000
2 150000
3 150000

NPV= Formula

r=0.15085

The NPV is calculated. If it is close to zero then the NPV=IRR in this case therefore, IRR= 0.15

From the findings, it is quite clear that the project is viable and profitable.

Bibliography

Roth, R. (2008). System analysis and design. John Wiley and Sons: New York.

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IvyPanda. (2021, January 28). Otacuschez Café's SMS Order System Analysis. Retrieved from https://ivypanda.com/essays/otacuschez-cafs-sms-order-system-analysis/

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"Otacuschez Café's SMS Order System Analysis." IvyPanda, 28 Jan. 2021, ivypanda.com/essays/otacuschez-cafs-sms-order-system-analysis/.

1. IvyPanda. "Otacuschez Café's SMS Order System Analysis." January 28, 2021. https://ivypanda.com/essays/otacuschez-cafs-sms-order-system-analysis/.


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IvyPanda. 2021. "Otacuschez Café's SMS Order System Analysis." January 28, 2021. https://ivypanda.com/essays/otacuschez-cafs-sms-order-system-analysis/.

References

IvyPanda. (2021) 'Otacuschez Café's SMS Order System Analysis'. 28 January.

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