Final Project

Objective: Prepare major components of a project which will reinforce key learning objectives learned during the term

Basis: The Pom+ Project located in Appendix two of Project Management Textbook( CASE TO BE USED)

Big Kola Company has been concerned that specialized fruit drinks have been eroding their cola market. The CEO mandates that "If you can't beat them, join them." Grape juice was the first product that was successful after an advertising blitz claiming the antitoxin benefits. Lately, competition is compressing grape juice margins and profits. Months of additional market surveys and focus groups have resulted in three potential high-margin drinks: cranberry, blueberry, and pomegranate. All these choices represent antitoxins. The decision is to produce the pomegranate drink that has many health claims. For example, the relative ability of these juices to eliminate harmful free radicals (antitoxins) is 71 percent for pomegranate, 33 percent for blueberry, and 20 percent for cranberry (Technion Institute of Technology). The market potential appears very attractive and should have a higher profit margin than the other potential juice products. Another appeal for pomegranate juice is its familiarity in the Middle East and Asia.

Major 6 Deliverables:

Scope Document

Activity on Node (AON) Network Diagram

Project Schedule & Cost

Project NPV

Communication Plan

Risk Assessment Form/Risk Response Matrix

*** Submit your project using either PowerPoint, Word, and/or Excel your option

Scope Document

Read page 639-641, the POM+ project introduction. Use the Project Scope Checklist on page 107-110 as your template. Please read the denition of each one of the 8 sections to ensure understanding.

Additional items to consider:

The Drink must come in three colors: Blue, Yellow and Red

Calories per serving must be < 125

Build a new manufacturing line for the drink

Pilot the drink in Europe Market

Meet rating of 4 of 5 on Market Research Taste Tests before release to market

Technion Institute of Technology must evaluate for antitoxin levels

Activity on Node (AON) Network Diagram

Create an AON diagram using the 2 AON videos (in D2L) and figure 6.8 in the book as your guide. On page 641, you will find the WBS activities and their duration, along with Predecessor(s). Dont forget to watch the second video on Finish to Start with Lag. Please ensure you highlight the critical path. There can be more than one critical path. You can use Word or PowerPoint to display your AON.

Project Schedule & Cost

Use WBS activity costs provided (see Excel) to calculate total project cost. Project overhead is 20% of total WBS activity cost. Show cost with and without overhead costs.

Using your WBS Outline, AON, and the rules listed on page 640 in the book, create a schedule (use dates) in Excel with the below column headings. Also, under Part 1 on page 640, use the listed rules in items 2,3,4,5, and 6 to identify the dates. Ignore items 1 and 7. Each row/activity should have the below columns completed

WBS Task ID Task Name Start Date Finish Date Late Start Date Late Finish Date Slack Days total

Project NPV

Given the provided 5 year cash inflows (see Excel) calculate the project NPV. The discount rate will be 12% for the project. Show the project NPV with and without overhead (i.e. you need to calculate NPV using WBS costs first, then recalculate NPV after you add-in overhead). However, your recommendation should be based on total project cost (WBS activity cost + overhead). Provide a recommendation to approve / reject the project include your rationale

Remember that the initial investment (outflow) for NPV calculation is total WBS costs then recalculate NPV using total WBS costs + Overhead

Communication Plan

Use figure 4.10 as your guide to create a communication plan. Additional information:

Stakeholders: CEO, CMO, CFO, Project Team, PM, VP-Manufacturing, VP-Production Design, Project Steering Committee, Technion Institute of Technology, Market Research Group

Items: Project Status, Budget Status, Change Requests, Risk Assessment Report, Market Research Report, and Antitoxin Report

Limit the plan to max 7 rows but no less than 5 rows

Risk Assessment Form/Risk Response Matrix

Prepare Risk Assessment Form & Risk Response Matrix.

Conduct a risk analysis of the project and prepare the results using figures 7.6 and 7.8 in the book as your guides.

List a minimum of 5 possible risks, but no more than 7 risks

EXCEL SHEET DATA: Activity Cost WBS Item

R&D Project Development

Need Survey $64,000 Set Product Specs $57,600 Shelf life Report $19,200 Nutrition Report $9,600 Select Fruit Suppliers $9,600

Initial Production

Equipment Rehab $528,000 Production Trials $235,200 Quality Trials $125,000 Quality Metrics $17,000 Quality Training $200,000

Distribution

Market Testing $96,000 Package Design $31,200 Select Distributors $80,000

Legal

Complete FDA Certification $60,000 Register Trademark $14,400 Prepare Product Launch $268,800

Overhead = 20% total cost of WBS activities Sheet 2: Cash Flows

Cash Flows for NPV

Year 1 Year 2 Year 3 Year 4 Year 5 $425,000 $425,000 $425,000 $425,000 $425,000

Discount Rate = 12%