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IBD short description: Results

This menu Results contains some commands creating the corresponding Result reports as MS Word files. User can edit these reports: convert numerical data into tables, insert charts from IBD, pictures, documents and other objects. Each Result report includes some IBD local reports related to the selected Result theme: 

For your convenience IBD includes in each Result report recommendations how to edit the report using MS Word options. Before and after each included IBD report there are prompts proposing you to insert there your analytical text explaining your assumptions, inputted data and obtained calculation results.

The last command of Results menu shows you an example of commented and arranged Summary result report for a sample project. This project is used in IBD as the template from which your real business description can start. Here you can see the Summary report for the sample project converted to HTML format. 

Main initial data, assumptions and decisions:

Products

Hybrid micro scheme (HMS). Competing product. One hybrid card is considered as the product unit. HMS are purchased as the components for Communication centers and other electronic equipment. Its use duration value (inputted to IBD) is defined as average time from purchase of the card by a customer and up to its inserting as the component of end product in manufacture process. This time is estimated as 0.5 months (15 days).

Test equipment (TE). Is intended for many purposes and consumers, which are changed in time. So, there is not enough data to define its consumers and their preferences required for demand prediction with IBD Demand menu. Therefore, for this product the direct manual sale forecast is inputted to the form Sales based on past experience and the analysis of the general market situation. The unit is the standard tool kit. Its 'use duration' value is estimated as the average time of physical wear out (loss of accuracy) and obsolescence. In this case, it is about 7 months.

Competitors

For our HMS the similar competing products of other firms are Hyperchip of CYMAC corp. and Micro scheme of Robotech Ltd. with the same use duration.

Prices

HMS is cheaper than competitors by 10 -15 %. This is the proposed price policy of our start-up firm to win on some micro scheme markets during the next year. IBD is used particularly to examine whether this target can be achieved.

Monthly use cost includes the cost of storage, transportation, package, testing and technologic operations during the component use in manufacture.

Consumers

Manufacturers of communication centers. This consumer type is presented as a range of large firms. They usually pay for the components delivery once a quarter (payment collection = 3 months) in 10 days after the quarter finishes (payment delay = 10 days). The consumer unit (CU) measuring consumption norm is one communication center.

Small and middle manufacturers of electronic equipment. There are a number of customers buying micro schemes for different purposes with different consumer units. However, from the sale statistics their demand for these cards may be enough stabile defined per $1000 of their total sales. That is, the consumer unit (CU) here is $1000 of produced electronic equipment cost.

Competition on different markets and demand factors (the form Consumer preference)

For the manufacturers of communication centers the competitor of our HMS is Hyper chip of CYMAC. This big company has the wide net of suppliers and can provide essentially more quick supply and more available technical support than our start-up firm. However, due to our special patent of technology, the HMS has higher quality and reliability and allows more flexible adaptation to different operation conditions and configurations of communication centers.

For the manufacturers of different electronic equipment, our competitor is Micro scheme of Robotech ltd. Here the same factors have effect to the demand.

Full and partial demand satiation with one type of competing cards (the form Consumer satisfaction)

The cards used for a center must be identical, so the partial (mixed) satiation of one center demand with different types of cards is technically impossible.

The cards used for each $1000 of various electronic equipment may be different, so partial satiation of one CU demand with each type of cards here is possible. Each equipment demand in cards is integer, but since there is different equipment, the average demand per CU ($1000) can be not integer.

Each type of competing cards is more effective (provides higher consumer satisfaction) for some purposes. For the rest purposes, its utility for the consumer may be less, for some of them - much less. Therefore, each additional applied card of the same type per one Consumer Unit (CU, $1000) has less efficiency for consumer than the previous. The growth of consumer satisfaction becomes less versus the % of CU demand covered with this card type.

In other words, it is supposed that in this market the effect of consumer satiation with each type of card takes place. If to take CU satisfaction by using only this card type for full demand as 100%, the half demand satiation by this card type can provide > 50% of satisfaction. In our project, it is assigned to 70%.

Publicity effect and cost (the form Publicity)

Different publicity actions are foreseen for HMS in the planned year. They inform customers in both markets, therefore the list of actions is the same for both consumer types.

However, the effect - % of informed customers is expected to be different (according to our experience). For small customers the Internet publicity is more effective than for large firms; the presentations and exhibitions - vice versa. The validity period of each publicity type is expected approximately the same.

Our competitors have wide supply and support network. They can spend much more money for publicity. The percent of customers (CU) informed about their production with different forms of publicity is estimated to be essentially higher than about our production.

Customers' quantity and budget limitations (the form Consumer data)

Number of produced communication centers (CC) and sales of electronic equipment (EE) slowly increases during the planned period.

Acceptable consumption cost of competing cards per one CC and per $1000 of EE allows satiating full demand with each type of cards.

Consumer demand and our delivery policy (the form Demand)

IBD calculation shows that by the assumptions and conditions described above the demand for HMS in both markets in general will grow during the planned period. It even exceeds our production capacities (calculated outside this project) especially in the first months of the year.

The market of EE manufacturers is larger, more reliable and has the higher growth than the other market. However, in the last months of the planned year the demand for HMS in this market does not grow, while for competing card of Robotech it grows essentially. Hence, in this market our success is not so evident. It is important to satisfy the full demand for HMS in this market. This increases the number of former customers informed on our production. For this consumer type the option ‘Delivery = Demand’ is set for calculation.

For the other consumers (manufacturers of CC) this option is not set. It is supposed to deliver to this consumer type all remained production after the EE market demand satisfying. The available capacities are developed continuously, so that to the end of the planned year they approximate to the demand. For this market, the IBD calculation predicts stepwise substitution of CYMAC Hyper chip by HMS.

Sales (the forms Sales and Total income)

According to IBD forecast, HMS sales grows during the planned period more than 3 times as much, mainly due to sales to small and middle manufacturers of different electronic equipment.

Test equipment (TE) sales grow more quickly (5 times as much), but it should not forget that the initial level is enough low. In addition, this forecast is just expert estimation, using no calculation and IBD model (this product has not ‘Competing’ mark in the form Products). To make this sales prediction more reasonable and confident, it should to find competition data for this product like for HMS.

IBD report: OUTPUT, SALES and RECEIPTS 11/30/01

Main initial data, assumptions and decisions (continued)

Materials, their norms and cost (the forms of Materials menu)

Two types of material purchase are essential for our production cost: Electronic elements (E) used as components of HMS and TE and also Facilities and manufacture Equipment (FE) providing the development of our production capacities.

E is the big set of different electronic details measured in $1000 of their cost. Since for each HMS and TE unit it is known which and how many elements should be used, there are the norms of E units ($1000) per each unit of HMS and TE (see the form Material input norms).

FE is the manufacture rooms and different equipment forming production line. One line provides the production of HMS, the other - of TE. Each line costs $900,000 and is installed during two first months of the year by $450,000 of cost per month. These data are inputted in the Materials cost form as Fixed materials needs (not depending on the number of produced HMS and TE). According to the contract with the FE supplier the payments for FE must be made in the first half of April. Therefore, payments collection for FE in Materials form is set to 3 months and delay - to 15 days.

Our products also are used as input materials. Each Test kit contains one HMS. This input norm is taken into account in the form Material norms. In the same time one Test kit is used in our production line for the final control of HMS (independently on their output amount). In the Material norms, it is inputted in the Additional materials field. So, the full output of HMS shall cover the planned sales and provide the Test kit output. In turn, the Test kit full output should provide the planned sales and the HMS control. IBD can resolve this mutual dependence and define the required full output of all products used also as materials. Simultaneously IBD calculates our demand for purchased electronic components (E) providing the full output of HMS and TE (see the Material cost form).

The manufacture of one test kit (with preparation, assembly, adjustment, testing) takes in average one month. Part of materials (E) is inputted in the start of this process (1 month before, see the Material norms), the rest part - directly in the month of the test kit output.

Personnel, labor norms and cost (the forms of Personnel menu)

Two types of personnel are applied in our sample project: Managers (M) and Technical personnel (TP) (see the Personnel types form). The managers get their salary on the tenth day of each month (the collection = 1 month, the delay = 10 days), technical personnel - each week (the collection = 0, the delay = 0).

There are the norms of technical personnel man-hours per one HMS and Test kit (see the form Labor norms). The managers’ man-hours are spent not per product unit, but provide entire output of each product and the general management of our firm. Therefore their labor expenditure for the entire product output is inputted in the field Additional man-hours of the form Labor norms and/or in the field Fixed man-hours of the form Personnel cost.

The form Total personnel cost shows that this cost grows slower than sales. The cause is that this cost partially does not depend on the product output.

Other costs, incomes and profit (the forms of Profit menu)

Two types of other costs, not relating to the materials and personnel salary are taken into account by the profit calculation: the monthly facilities support and the additional expenditures for the personnel (see the Other cost values form). They do not depend on the sales as well as the other incomes (utilization of not used equipment and materials) inputted directly into the Profit form.

The Gross profit field in the below table shows that we can expect essential profit values (before taxes) for the planned period.

IBD report: COSTS, INCOMES AND PROFIT 11/30/01