|
|
|
New Project / Modify Project
See also:Factors for Product Development Decisions
On this screen you enter or modify the specifications for a Product Development project for the coming year.
You define the desired levels for the attributes for the project, decide on the target prime cost and how much budget to give the Product Development team to spend on achieving this goal. (See Notes below for further comments.) The Product Development team will do the best they can (given your budgetary constraints) to achieve your goals, and will deliver the result to you at the end of the period. You can then view the results of the project in the Product Development Report.
Each project will take one period to achieve a result. You may have more than one design & development project per year (if you can afford it!). The result of a Design & Development project can be used to launch or modify a product in the next period or at any time after that.
Notes:
Each new project requires a new name. We suggest that you use similar names for successive projects.
To help you decide on the desired levels for the attributes, you may wish to consult the Market Research reports, available from the Reports menu. These reports list the ideal values desired by the different market segments and information about all products.
"Prime cost" refers to the direct labor and raw material cost of making one unit of the product (i.e. each bike). It does NOT include the very significant overhead costs required to run the factory and market the products. As a rule of thumb, to cover these overheads and allow for a profit margin, the wholesale price for a product will be two to three times higher than the prime cost! In the "Target prime cost" field you enter the prime cost you would like to achieve for a product based on this new design.
The "Expenditure next period" field is where you specify the amount of money to be spent on achieving a viable manufacturable design to the specifications you have given above. The minimum expenditure is $100,000. Depending on how different the attribute values are from existing designs and how tight the prime cost restriction is, project expenditures might range as high as $5m.
If the Product Development project team are unable to achieve your specifications they will return you a design partway between their starting point (an existing design of yours) and your requested specifications. If your specifications are easily achieved, then any extra money will be used to reduce the prime cost further (i.e. below your specification).