Chapter 9 Assignment Formulate an answer to the following question(s) and submit to the instructor: Refer to Table 9.1 Discuss what you think is the most important step in the Supply Chain Project Life Cycle Why? Discuss thoroughly 72 REINVENTING THE SUPPLY CHAIN LIFE CYCLE, STUDENT WORKBOOK Year 3 Year 4 Table W9.1 Costs and Benefits for the Software Application Problem Cost or Benefit Item Year 0 Year 1 Year 2 Costs: Upfront cost ($) 800,000 Annual cost ($) 200,000 200,000 Benefits: Quick response to 450,000 450,000 450,000 450,000 network failure ($) Improved customer service 200,000 200,000 For Step 1 in breakeven analysis, we compute the PV of the quan- tifiable costs from Table W9.1, which is as follows: + + + 200,000 200,000 200,000 200,000 PV = 800,000+ 1 +0.11 (1+0.11)2 (1+0.11)(1+0.11) (2) = 800,000 + 620,489.14 $1,420,489.14