Project Details

Your business (based on your selected topic bakery, restaurant, jewelry shop, etc.) currently has $1 million in sales revenues per year and your variable raw material costs are 40%, your variable personnel costs are 25%, your fixed overhead and management salaries are 20% leaving 10% gross profit margin. We will ignore taxes & other costs for now.

You are operating at full capacity in your current location, and you have decided to investigate expanding your business.

You have secured potential funding that will allow you several options. First, you determine that you want to expand into new cities, not just add locations in the same city. You want to consolidate your production/delivery into at least one manufacturing and/or distribution centre to serve your new locations.

You determine that a $100,000 investment in a manufacturing, service and/or distribution centre will provide the best way to expand your product line.

1. Option 1 - Adding a 2^nd retail store for an additional $100,000 will result in doubling of revenues at the same profit margin.
2. Option 2, a $250,000 investment in opening 3 stores in 3 cities will result in tripling revenues and increasing the profit margin to 12%
3. Option 3, a $1 Million investment opening 15 stores in three cities will result in a fifteen-fold increase in revenues and a 15% profit margin.

How would you determine the most profitable option to take?

After you determine your expansion plan you need to decide which cities to put your new locations into. Pick cities surrounding your current business location and determine the best location for your distribution centre.

Based on your decisions above create a project to open your new stores in 24 months. After the level one project itself you should have two more levels of tasks, keeping it to no more than 30 tasks and subtasks.

Your deliverables for the final project are:

• Using the concepts from the relevant units of the course:
• Describe your current business and expansion plans.
  • Where and why are you located?
  • Describe your product line
  • Who are your customers?
  • How do you manage to provide a quality product for your customers?
• A decision tree of your expansion plans and explanation of your decision.
• A project plan including up to 30 tasks and subtasks constituting Level 2 & Level 3 subtasks to the Level 1 Company Expansion Main Task.
  • This project plan is to show the steps your team needs to undertake to plan, initiate and complete construction of a manufacturing centre and retail stores at the locations your analysis specifies
• A PERT/CPM project file showing a PERT AON chart and a Gantt chart showing your critical path and your reasoning for your project plan. Please use project management software.