i need market study

a Basic model and a Deluxe model

Toybox

into their existing product line for the company. The company is located in Canton, Georgia and the company makes a variety of wood products. However, this will be their first look at expanding into another market but they suspect it might be feasible. New Product: The product being considered is (above) that would be available in two models: Basic and Deluxe.

Both models will be sold

Assembled and boxed for storage/shipment.

First design your products then perform a Market Study: Find where your product fits into the market of other competitors. Capture their images and retail prices. Estimate the cost of your own products using the Bill of Materials. This will give you a good idea of where you fit into the market. Please keep in mind that the cost to manufacture your products are not known yet, so allow some flexibility in your market pricing.

Size of Factory Area: The company does have some unused space that is currently available for immediate occupancy. The unused space is a 15,000 square foot area and its exact dimensions are 100 feet by 150 feet. You should plan to utilize part or all of this space for the whole operation. The following is a rough drawing of the available floor space area. The dotted area represents another 5,000 square feet (100 x 50) if any additional space needed.

USE THIS ORIENTATION FOR YOUR PLANT LAYOUT

Additional Area Available: The outside wall will contain your receiving and shipping doors. The inside walls already exist inside a building. If needed, an additional 5,000 square feet of space is available (dotted area) but this would require a rearrangement of the production facilities. The cost of this rearrangement would be $130,000 (to relocate the wall) and if used then this cost would have to be included in the feasibility study. Cost of Manufacturing Area Used: For accounting purposes all manufacturing space is valued at $53.00 per square foot per year exclusive of utility and maintenance cost but inclusive of property taxes. Overhead Services: Since the company has its offices at the Canton, Georgia location, it is expected that most of the overhead services such as accounting, billing, medical, etc. can be done by existing personnel at no additional cost to the company. However, the feasibility study must contain estimated costs for items such as utilities. In the past the company has used a percentage of the direct labor cost to estimate these types of costs. If you choose to use a percentage then be sure to state the services that the percentage includes for the operation. Rate of Return (ROI): The company must price its products so that they yield a minimum 35% after tax ROI over a five-year planning horizon. PLEASE NOTE THAT YOU WILL NOT HAVE ALL THE DATA YOU NEED YET TO CALCULATE ROI. YOU WILL ONLY HAVE MATERIAL COST AND A GOOD IDEA OF SELLING PRICE. DO THE BEST YOU CAN TO ASSURE > 35% AT THIS POINT.

- Your product must be priced to give the 35% ROI. - Although not a rigid criteria, the company would like to have a yearly breakeven point of seven months or less by the fourth year of production. - The new product must stand on its own financially.

Therefore, please make every effort to assure the company that the new operation is not being subsidized by any of the other products the company makes.

Annual Return on Investment is calculated by dividing Net Profit After Taxes by the amount of the total investment. Multiply by 100 to convert a decimal value into a percent. For this project the required ROI is a minimum of 35% for the entire five year period (not 35% per year). This is calculated by adding the Net Profit After Tax each year for all five years to yield the total Net Profit After Tax for five years. This total is then divided by the amount of the total investment (total of all money invested) and multiplied by 100 to yield an ROI percentage. Loan Interest Rate: You may assume that the company will supply all the investment capital that will be required. Their current interest rate for borrowed funds is 6.0% and this should be included in the study.