Cranfield Case

Cranfield cas

MBAD/F 619 - Summer 2010 Dr. Leon

CASE 1: Cranfield, Inc. Case

Case 1 is a risk analysis of the Cranfield Inc. case presented in cases 12A and 13A on MyLMUConnect’s Assignment tab. Your assignment is to recommend to Maria Lopez and Robert Walker whether or not the lite cranapple cocktail project should be accepted or not. Preparation of your recommendation should involve the following issues and analysis:

1. Complete the INPUT and CASHFLOW worksheets in CRANCASE.XLS based on the initial set of assumptions discussed in the case and in class. Refer to Table 1 of case 13A to help validate your model.

2. Select two output variables that you would like to analyze for your decision. Identify the criteria you have for these variables with respect to classifying the project as acceptable or not. Be prepared to defend your choice of criteria in the executive summary.

3. Assuming a +/- 30% deviation, use data tables to perform a sensitivity analysis of your output variables from part 2 to each of the following input assumptions:

• Unit Sales

• Salvage Value

• T=0 Sales Price

• T=0 Variable Cost

• Price Inflation %

• Cost Inflation %

Create a spider diagram for each of your two output variables that shows the impact different input values will have on that corresponding output. Do the values tested for each input seem plausible based on market experience and information from the case? Create a data table for each input assumption that examines what your output variables could be in a worst case/ most likely case/best case scenario. Attach notes in the first column of these data tables explaining why you picked these possible worst/best cases. Create a spider diagram for each of your two output variables that shows the impact these different input values will have on that corresponding output. Save the...