Forecasting and Decision-Making for Mechanical Ventilators Manufacturing and Distribution

Project Goals

1. To select the methodologies that can lead to proper solutions and foster teamwork.

2. To determine and research different factors that can impact decision making processes.

3. To apply multiple quantitative decision-making techniques and evaluate them.

4. To provide a critical interpretation of the different methodologies and regression analysis used.

5. To apply proper technique and interpretation for break-even analysis. 

6. To research elements that help you support your decision making (this can be qualitative or quantitative reasoning).

7. To demonstrate your ability to present and support a business case.

Summary

This team project is a real case scenario used to apply your knowledge in forecasting and decision-making processes that will impact a company’s investment. Your team is asked to build the investment case, decide on the approach to collect additional data required for analysis, and determine different internal and external factors that can influence a forecasting model, choose the best model, and articulate the different factors that lead to the best possible strategy decision. You will also apply the Break-even analysis to define the model for minimum profitability. You are presenting your proposal to a panel that will disclose if your project will be selected for further evaluation for a potential capital investment, based on the panel’s pre-defined evaluation criteria. You will be competing with the other teams for investment.

Background information

Company xxx “Name to be selected” is looking for a strategic position in the Mechanical ventilators manufacturing and distribution in the USA market. Ventilators have experienced an exponential market growth in the last couple of years as the result of the pandemic and requirements in hospitals for care of patients with severe COVID and related respiratory conditions.  There are traditional market suppliers as well as new players including automobile manufactures that envision a market penetration and growth considering different factors in the future of patient care and pandemic conditions in the world. Technology has evolved as well as competitive advantage where more portable, affordable equipment is available with lower cost for repair, maintenance, and replacement.

The following data is made available. However, it is important that your company conduct additional research and make the necessary considerations to demonstrate the viability of the business and obtain investment capital for the project. You can challenge the Market value forecast with new arguments based on research

Additionally, it is also encouraged to consider additional synergies or applications beyond the use of ventilators for Covid patients in your evaluation. This could be interpreted as an additional competitive edge for your proposition and support your argument to getting funding. There are no restrictions or limitations on what other synergies or applications you see fit. Use your creativity and think outside of the box to determine whether or not there is a further untapped market opportunity you should also consider and account for in your evaluation.

Project deliverables:

1. Executive Summary (2-3 pages, double-spaced, professionally written)

You are required to make a written executive summary. In this report, you will demonstrate your understanding of the concepts of decision-making traps and cover key findings and recommendations. Your deliverable should deliver the following:

• Introduction: outline the problem and its background as decided on and the report analysts.
• Problem Statement: provide details and information about definitions and assumptions made in the analysis.
• Data and forecast
• Analysis: how the problem is solved along with the sensitivity analysis. Be concise. You have to use Excel in order to get the results.
• Break-even analysis
• Conclusions and Recommendations: explain to the board what the best alternatives are, the process to begin exploring those options, and the associated costs, profits, etc.

2. Excel Sheet to show your quantitative analysis.

Project deliverables should be delivered on the last lecture. Documents must be submitted via Blackboard.

• Market US$ MM Projections to 2040. Explain Forecast method and rationality
• Define Product Variable Cost – Fix Cost and Total Cost
• Define Units production from 2021 to 2040
• Revenue Projection from Sales
• Define Correlation between Ventilators operating hours and Repair and Maintenance Cost
• Forecast Revenue from preventive maintenance and parts from 2020 to 2024 and explain the how this Revenue will vary year over year
• Explain assumptions on technology, life of the equipment, years to replace
• Show your break-even analysis.