MEEN 489 Lecture Notes - Lecture 5: Interest Expense, Food Chain
18 Apr 2016
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Lecture 5: product economics & feasibility: feasibility, is there a market, how large is it, how to access it, who is already participating, can we manufacture the product? i. ii. iii. Do we have capabilities, licenses, etc: will customers buy this product, why ours over others, competitive advantages, price, performance, features, reliability iii. Acceptable return on investment i. ii. iii. iv: economics, food chain, raw materials, manufacturing, distribution, transportation, customer, what factors costs for each component, example of product cost build-up, materials, raw goods, materials multiplier. Labor: # of hours, $ per hour, wages, labor multiplier, facility costs, supervisory staff, engineering and administration iii. Sum of materials plus labor: add overhead, management, sales & marketing, design & development, add profit (or margin, factors which impact iv. Retail store: overhead & profit, income (or p&l) statement i. ii. iii. iv. v. vi.
