Perfume Engineering

Perfume Engineering
Pure Ambition Pure Ambition Pure Ambition Pure Ambition
Pure Ambition Pure Ambition Pure Ambition Pure Ambition
Clare Hoang
Clare Hoang
Cicely Williams
Cicely Williams
Kyla Patterson
Kyla Patterson
Overview
Overview
1. 1.
Objective
Objective
2. 2.
Background
Background
4. 4.
Marketing
Marketing
5. 5.
Happiness Function
Happiness Function
6. 6.
Results
Results
7. 7.
Economic Analysis
Economic Analysis
Objective
Objective
The objective of our project is to
The objective of our project is to
engineer a new scent of perfume
engineer a new scent of perfume
over a 10 year life span. In
over a 10 year life span. In
addition to this, marketing of the
addition to this, marketing of the
product and economic analysis
product and economic analysis
must also be taken into account.
must also be taken into account.
Background
Background
Functions of a Perfume
Functions of a Perfume
Functions
Functions

Provide a pleasant odor
Provide a pleasant odor

Cover base smell of
Cover base smell of
product
product

Give product identity
Give product identity

Signify product change
Signify product change
Examples
Examples

Air fresheners
Air fresheners

Soaps or lotions
Soaps or lotions

Banana Boat sunscreen
Banana Boat sunscreen

New and Improved!
New and Improved!
Perfume Construction
Perfume Construction
Making a scent
Making a scent

Attributes
Attributes
Scent Scent Ingredients Ingredients
Color Color Aesthetics Aesthetics
Oiliness of fluid Oiliness of fluid Concentration of Essential Oils Concentration of Essential Oils
Initial strength of fragrance Initial strength of fragrance - - Concentration Concentration
Endurance Endurance - - Time Time
*These attributes *These attributes role in the happiness function will role in the happiness function will
be discussed in later slides be discussed in later slides. .
Parts of a Perfume
Parts of a Perfume
There are three main parts of a perfume:
There are three main parts of a perfume:

Basics
Basics

the basics are the materials in the essential oil
the basics are the materials in the essential oil
that are present at higher percentages
that are present at higher percentages

Diluent
Diluent

ingredients in the perfume that dilutes the
ingredients in the perfume that dilutes the
mixture
mixture

Solvent
Solvent
Emulsion
Emulsion

Due to the solubility of the essential oils in
Due to the solubility of the essential oils in
water, perfume is an emulsion
water, perfume is an emulsion
Range from < 1 Range from < 1 ppm ppm to 20,000 to 20,000 ppm ppm
Not a significant amount Not a significant amount

Oil and aqueous phase
Oil and aqueous phase
Continuous phase Continuous phase
Dispersed phase Dispersed phase

A stable emulsion
A stable emulsion
is necessary
http://www.lesestein.de/bildarchiv-vorschau/wissenschaft.htm
Vocabulary
Vocabulary

Top note
Top note

component of a fragrance with high

component of a fragrance with high
evaporation rate
evaporation rate

Middle note
Middle note

component of a fragrance with

component of a fragrance with
medium evaporation rate
medium evaporation rate

Base note
Base note

component of a fragrance with low

component of a fragrance with low
evaporation rate
evaporation rate

Odor threshold
Odor threshold

minimum concentration in air

minimum concentration in air
at which an odor is detectable by the human nose
at which an odor is detectable by the human nose

Odor value
Odor value

the concentration in air of an odor

the concentration in air of an odor
Scent Pyramid Example
Scent Pyramid Example
Type of scent Type of scent Typical Percentage of Typical Percentage of
(Examples) (Examples) Scent in Fragrance Scent in Fragrance
Lemon, Lavender Lemon, Lavender 15 15- -25% 25%
Hibiscus, Rose Hibiscus, Rose 30 30- -40% 40%
Musk, Vanilla Musk, Vanilla 45 45- -55% 55%
Top Note
Middle Note
Base Note
Mata, Vera G., Paula B. Gomes, and Alfrio E. Rodrigues. "Engineering Perfumes." AIChE
Journal 51 (2005): 2834-2852.
Types of Perfumes
Types of Perfumes
10 to 20 10 to 20 80 to 90 80 to 90 4 to 8 4 to 8
Eau de Toilette Eau de Toilette
10 to 20 10 to 20 80 to 90 80 to 90 8 to 15 8 to 15
Eau de Parfum Eau de Parfum
5 to 10 5 to 10 90 to 95 90 to 95 15 to 30 15 to 30
Parfum Parfum
Water Water Alcohol Alcohol Oil Oil
Remainder (vol %) Remainder (vol %) Total (vol %) Total (vol %)
Types Types
We chose to use Eau de Parfum
We chose to use Eau de Parfum
to reach the
to reach the

average
average

market
market
Plan of Action
Plan of Action

Determine the components of a perfume that
Determine the components of a perfume that
maximize the ROI and the Happiness
maximize the ROI and the Happiness

To do this:
To do this:

First calculate the market and the demand
First calculate the market and the demand

Next determine the initial composition of perfume
Next determine the initial composition of perfume

Relate attributes of perfume to economics using the
Relate attributes of perfume to economics using the
scent concentrations as manipulated variables
scent concentrations as manipulated variables

Use Solver in Excel to optimize ROI by varying
Use Solver in Excel to optimize ROI by varying
scent concentrations
scent concentrations
Marketing
Marketing
Target Market
Target Market

Female
Female

Age 25
Age 25
-
-
40
40

We chose this market because
We chose this market because
this group is more likely to
this group is more likely to
have a stable job/income.
have a stable job/income.
Introduction Location
Introduction Location

Due to investment opportunities, Oklahoma City
Due to investment opportunities, Oklahoma City
Metropolitan Statistical Area (MSA) is our choice
Metropolitan Statistical Area (MSA) is our choice
introduction location
introduction location
Advertising
Advertising
The intended course of action is to advertise to the
The intended course of action is to advertise to the
target market in the MSA. Therefore we have
target market in the MSA. Therefore we have
chosen to advertise in the following areas:
chosen to advertise in the following areas:
Advertising
7%
86%
1% 1%
5% 0%
Newspapers
Television
Direct Mail
Radio
Magazines
Online
Pricing Model
Pricing Model

Budget Model
Budget Model

Where
Where
p p
1 1
and p and p
2 2
are ours and our competitor are ours and our competitor s product prices s product prices
($/bottle) ($/bottle)
d d
1 1
and d and d
2 2
are our and our competitor are our and our competitor s demand (# of s demand (# of
bottles sold) bottles sold)
Y is total amount of sales for product ($) Y is total amount of sales for product ($)
Y d p d p = +
2 2 1 1
2
1
2 2 1 1

d
d
d p d p =
Pricing Model
Pricing Model

Fixed Demand Model

Fixed Demand Model

For our product, the budget model is most
For our product, the budget model is most
appropriate. Although this may be the case,
appropriate. Although this may be the case,
due to demand constraints, the fixed demand
due to demand constraints, the fixed demand
model will be implemented accordingly
model will be implemented accordingly
.
.
( )

|
|

\
|
=
1
1
1
1
1
1
d D d
D d d = +
2 1
Determination of
Determination of

determined through several logical

determined through several logical
assumptions
assumptions

Assume that competition is completely
Assume that competition is completely
recognized, horizontal fit
recognized, horizontal fit

Assume linear recognition fit, then plateau for
Assume linear recognition fit, then plateau for
our recognition
our recognition

All of the
All of the

s
s
are averaged over time
are averaged over time
Graph of
Graph of


Determination
Determination
Consumer Awareness
0
20000
40000
60000
80000
100000
120000
140000
0 1 2 3 4 5 6 7 8 9 10
Time (years)
A
w
a
r
e

C
o
n
s
u
m
e
r
s

(
p
e
o
p
l
e
)



Competition
Pure Ambition
Alpha
0
0.2
0.4
0.6
0.8
1
0 2 4 6 8 10 12
Time (years)
a
l
p
h
a
Happiness Function
Happiness Function
Perfume Survey
Perfume Survey

A survey was used to determine the qualities of a
A survey was used to determine the qualities of a
fragrance desired by the target market
fragrance desired by the target market

Given to a sample group of target market;
Given to a sample group of target market;
females between the ages of 25 and 40
females between the ages of 25 and 40

Asked to rate several perfumes over a period of
Asked to rate several perfumes over a period of
eight hours
eight hours

Asked to define characteristics of ideal perfume
Asked to define characteristics of ideal perfume

These values were used to model the
These values were used to model the

perfect
perfect

fragrance
fragrance
Components
Components
What are consumers looking for in a perfume?
What are consumers looking for in a perfume?
Scent (60%) Scent (60%)
Endurance (35%) Endurance (35%)
Color (3%) Color (3%)
Initial strength of Initial strength of
fragrance (1%) fragrance (1%)
Oiliness of fluid (1%) Oiliness of fluid (1%)
H(perfume) = (0.6)y
H(perfume) = (0.6)y
scent scent
+ (0.35)y
+ (0.35)y
endurance endurance
+
+
(0.03)y
(0.03)y
color color
+ (0.01)y
+ (0.01)y
viscosity viscosity
+ (0.01)y
+ (0.01)y
init.strength init.strength
Additional Variables
Additional Variables

There were other determinants to consider in a
There were other determinants to consider in a
consumer
consumer

s initial purchase of a perfume that

s initial purchase of a perfume that
were not considered directly in the happiness
were not considered directly in the happiness
function. These include:
function. These include:

Skin reaction
Skin reaction

Set as a concentration constraint

Set as a concentration constraint
(Each EO cannot exceed 5 vol% of total
(Each EO cannot exceed 5 vol% of total
perfume volume)
perfume volume)

Price
Price

Determined with pricing model

Determined with pricing model
Initial Scent
Initial Scent

How pleasing or displeasing the scent of the
How pleasing or displeasing the scent of the
perfume on immediate application is to the
perfume on immediate application is to the
consumer
consumer

Where z = weight each scent carries
Where z = weight each scent carries

Where x = mole fraction for each scent
Where x = mole fraction for each scent
oriental
want
have
oriental
musk
want
have
musk
floral
want
have
floral
natural
want
have
natural
citrus
want
have
citrus hr scent
x
x
z
x
x
z
x
x
z
x
x
z
x
x
z y
|
|

\
|
+
|
|

\
|
+
|
|

\
|
+
|
|

\
|
+
|
|

\
|
=
0
Scent After Four Hours
Scent After Four Hours

The smell of the perfume after four hours
The smell of the perfume after four hours

How pleasing or displeasing to the consumer the
How pleasing or displeasing to the consumer the
scent of the perfume is four hours after application
scent of the perfume is four hours after application

Top note is no longer detectable
Top note is no longer detectable
oriental
want
have
oriental
musk
want
have
musk
floral
want
have
floral
natural
want
have
natural hr scent
x
x
z
x
x
z
x
x
z
x
x
z y
|
|

\
|
+
|
|

\
|
+
|
|

\
|
+
|
|

\
|
=
4
Scent After Eight Hours
Scent After Eight Hours

The smell of the perfume after eight hours
The smell of the perfume after eight hours

How pleasing or displeasing to the consumer the
How pleasing or displeasing to the consumer the
scent of the perfume is eight hours after application
scent of the perfume is eight hours after application

Top note and middle note are no longer detectable
Top note and middle note are no longer detectable
oriental
want
have
oriental
musk
want
have
musk
natural
want
have
natural hr scent
x
x
z
x
x
z
x
x
z y
|
|

\
|
+
|
|

\
|
+
|
|

\
|
=
8
Color
Color

The color of the packaging
The color of the packaging

How appealing the color of the perfume packaging is to
How appealing the color of the perfume packaging is to
the consumer
the consumer

For our fragrance, the happiness due to color
For our fragrance, the happiness due to color
is assigned the number 1
is assigned the number 1

The color red was chosen based on the results of the
The color red was chosen based on the results of the
survey which maximizes happiness for color
survey which maximizes happiness for color
) 03 . 0 ( * K w y
color color
=
Oiliness
Oiliness

The oiliness of the perfume was determined using the
The oiliness of the perfume was determined using the
concentration of the essential oils in the perfume
concentration of the essential oils in the perfume

The range is determined by the concentration constraints
The range is determined by the concentration constraints
set by the volume percentage of oil allowed in an eau de
set by the volume percentage of oil allowed in an eau de
parfum
parfum

Volume Percent Range: 8%
Volume Percent Range: 8%

15% of total
15% of total
{ } ( ) 01 . 0
1
0
=
< < high c low
met not if oiliness oiliness
oil
w y
Initial Strength
Initial Strength

Any unhappiness caused by the initial scent of the
Any unhappiness caused by the initial scent of the
fragrance being either too strong or too weak on initial
fragrance being either too strong or too weak on initial
contact
contact

Where C
Where C
A A
is the actual initial concentration in air, and
is the actual initial concentration in air, and
C
C
W W
is the wanted concentration in air determined by
is the wanted concentration in air determined by
survey data and comparison to competition
survey data and comparison to competition
) 01 . 0 ( * 1
. .

|
|

\
|
=
W
W A
strength init strength init
C
C C
w y
Endurance
Endurance

How long the smell will still be noticeable to others
How long the smell will still be noticeable to others
after it is applied
after it is applied
The amount of time that the perfume can still be detected The amount of time that the perfume can still be detected
by others in a ten centimeter radius from the person by others in a ten centimeter radius from the person
wearing the perfume wearing the perfume
Thrs = odor threshold Thrs = odor threshold OV = odor value OV = odor value
With: f = 0; if <= 0 With: f = 0; if <= 0
f = 1; if > 0 f = 1; if > 0
) 17 . 0 (
1
|

\
|
=
z
t
i
z
t
i endurance endurance
Thrs OV w y
|

\
|

z
t
i
z
t
i
Thrs OV
|

\
|

z
t
i
z
t
i
Thrs OV
Diffusion Model
Diffusion Model

The endurance parameter in the function has
The endurance parameter in the function has
two variables: time, distance
two variables: time, distance

A diffusion model was used to approximate the
A diffusion model was used to approximate the
change in concentration of the fragrance over
change in concentration of the fragrance over
time and distance
time and distance
Activity Coefficients
Activity Coefficients

Activity coefficients were obtained using the
Activity coefficients were obtained using the
UNIFAC method from The Properties of
UNIFAC method from The Properties of
Liquids and Gases by Reid, Poling, and
Liquids and Gases by Reid, Poling, and
Prausnitz
Prausnitz
[1] [1]

This method was used because it determined
This method was used because it determined
activity coefficients due to interactions between
activity coefficients due to interactions between
structural groups instead of utilizing
structural groups instead of utilizing
experimental data
experimental data
R
i
c
i i
ln ln ln + =
[1] Reid, Prausnitz, Poling. [1] Reid, Prausnitz, Poling. The Properties of Gases and Liquids The Properties of Gases and Liquids. 4th Edition. New York City, . 4th Edition. New York City,
NY. McGraw NY. McGraw- -Hill, Inc. 1987 Hill, Inc. 1987
Activity Coefficients
Activity Coefficients

Combinatorial
Combinatorial

due to differences in sizes

due to differences in sizes
and shapes of the molecules in the mixture
and shapes of the molecules in the mixture

Residual
Residual

due to energy interactions between

due to energy interactions between
the different groups
the different groups
R
i
c
i i
ln ln ln + =
R
i
c
i i
ln ln ln + =
R
i
c
i i
ln ln ln + =
Analysis in Excel
Analysis in Excel
Using Excel, we iterated the change in concentration
Using Excel, we iterated the change in concentration
over time up to a distance of 1 ft and a time of 8 hours
over time up to a distance of 1 ft and a time of 8 hours

Most data was known
Most data was known
with the exception of the
with the exception of the
concentration change
concentration change
over distance
over distance

This was calculated
This was calculated
using a derivation of
using a derivation of
Fick
Fick

s Second Law
s Second Law
Fick
Fick

s Second Law
s Second Law

Small amount of liquid on surface with concentration
Small amount of liquid on surface with concentration
changing over time
changing over time

Derivation for numerical analysis
Derivation for numerical analysis

Required assumptions due to lack of experimental data
Required assumptions due to lack of experimental data
Liquid and gas phases are in equilibrium Liquid and gas phases are in equilibrium
Unidirectional diffusion Unidirectional diffusion
Ideal gas law holds Ideal gas law holds
Each component diffuses separately Each component diffuses separately
2
2
z
c
D
t
c
i i

Diffusion Model
Diffusion Model

A diffusion model was used to define endurance
A diffusion model was used to define endurance
in the perfume
in the perfume

Optimum endurance of the scent was defined by
Optimum endurance of the scent was defined by
using the concentration of the fastest depleting
using the concentration of the fastest depleting
base note at time equal to eight hours
base note at time equal to eight hours

This concentration must be equal or greater than
This concentration must be equal or greater than
the threshold of the scent to be considered as
the threshold of the scent to be considered as

enduring
enduring

Numerical Analysis
Numerical Analysis
Boundary Conditions:
Boundary Conditions:

t = 0, C
t = 0, C
A A
(z, 0)= C
(z, 0)= C
Ao Ao
for all z
for all z

z = 0, C
z = 0, C
A A
(0, t) = C
(0, t) = C
As As
for t > 0
for t > 0

z =
z =

, C
, C
A A
(
(

, t) = C
, t) = C
Ao Ao
for all t
for all t
[ ]
2
, , , , ,
2 ) (
z
c c c
D
t
c c
t t z z t t z t t z z t t z t z

+
=

+
Derivation of Fick
Derivation of Fick

s 2
s 2
nd nd
Law
Law
Diffusion Model (cont.)
Diffusion Model (cont.)

( )
z
z
c c
z
c c
D
t
c c
t t
z z
t t
z
t t
z
t t
z z
t t
z
t
z

|
|

\
|

|
|

\
|

+

( )
z
z
c c
z
c c
D
t
c c
t t
z z
t t
z
t t
z
t t
z z
t t
z
t
z

(
(

|
|

\
|

|
|

\
|

+

From Ficks 2
nd
Law
Expanding we get
Simplifying we get
with
[ ]
t t
z z
t t
z
t t
z z
t t
z
t
z
c c c
z
t D
c c



+

+

+ = 2
2
[ ]
t t
z z
t t
z z
t
z
c c c



+
+ =
2
1
t D z = 2
Analysis in Excel Cont
Analysis in Excel Cont

d
d
z c /
With these
values, we can
find the
concentration
at any time
and at any
position
t
z
c |
Concentration Profiles
Concentration Profiles
Concentration profiles were developed by plotting
Concentration profiles were developed by plotting
concentration versus time at distance z
concentration versus time at distance z
Concentration vs. z-distance
Sandalwood (Linalool)
0
0.0002
0.0004
0.0006
0.0008
0.001
0.0012
0.0014
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35
z - distance (m)
C
o
n
c

(
m
o
l
/
m
3
)
.
t=1 hr t=2 hr t=3 hr t=4 hr t=5 hr t=6 hr t=7 hr t=8 hr
Concentration vs. Time
Concentration vs. Time
Concentrationvs. Time
z-distance = 0.1 m
-0.0001
0.0001
0.0003
0.0005
0.0007
0.0009
0 2 4 6 8 10 12 14 16 18 20
Time (hr)
C
o
n
c
e
n
t
r
a
t
i
o
n

(
m
o
l
/
m
3
)
.
.
.
Sandalwood Musk Vanilla Amber Threshold
-0.000005
0
0.000005
0.00001
0.000015
0.00002
0 2 4 6 8 10
Time (hr)
C
o
n
c
e
n
t
r
a
t
i
o
n

(
m
o
l
/
m
3
)
.
.
.
The fastest The fastest
depleting depleting
component was component was
determined to be determined to be
Sandalwood, with a Sandalwood, with a
threshold in air of threshold in air of
6.4 x 10 6.4 x 10
- -5 5
g/m g/m
3 3
, and , and
an endurance time an endurance time
of 9 hours of 9 hours
Based on these Based on these
values, the values, the
endurance of the endurance of the
perfume was perfume was
determined determined
Happiness Function
Happiness Function

To determine the engineered variables with
To determine the engineered variables with
respect to the consumer variables from the
respect to the consumer variables from the
survey, graphs of happiness versus each
survey, graphs of happiness versus each
consumer variable were developed
consumer variable were developed

These were then related to intermediate
These were then related to intermediate
variables which could be manipulated to
variables which could be manipulated to
form the fragrance
form the fragrance
Scent Graphs
Scent Graphs
Happiness vs. Consumer Amount
Scent - 0 HR
0
0.2
0.4
0.6
0.8
1
1.2
0 0.2 0.4 0.6 0.8 1
Consumer Amount (Volume Fraction)
H
a
p
p
i
n
e
s
s
.
Citrus
Natural
Floral
Musk
Oriental
Happiness vs. Consumer Amount (Linearized)
Scent 0-HR
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Consumer Amount (Volume Fraction)
H
a
p
p
i
n
e
s
s
.
Citrus
Natural
Floral
Musk
Oriental
Scent Graphs
Scent Graphs
Volume fraction vs. Mole fraction
Citrus (0-Hour)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Intermediate Variable (mole fraction)
C
o
n
s
u
m
e
r

a
m
o
u
n
t

(
v
o
l
u
m
e

f
r
a
c
t
i
o
n
)

Scent Graph With Intermediate
Scent Graph With Intermediate
Variable
Variable
Happiness vs. Intermediate Variable
Scent 0 HR
0
0.2
0.4
0.6
0.8
1
1.2
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Intermediate Variable (mole fraction)
H
a
p
p
i
n
e
s
s
.
Citrus
Natural
Floral
Musk
Oriental
Determination of
Determination of


= Happiness of Competition / Happiness of Pure Ambition = Happiness of Competition / Happiness of Pure Ambition
0.756 0.718 Overall Happiness
7.6 6.90 Overall Score
6.5 0.50 Oiliness
8.5 10.0 Color
6.7 9.9 Init. Strength
8.0 8.0 Endurance
23.2 19.9 Scent
Competition Pure Ambition Categories
Happiness Comparison
Economic Analysis
Economic Analysis
Packaging
P-10
Process Flow Diagram
Process Flow Diagram
Mixer
Storage
Tank
Diaphragm
Pump
Diaphragm
Pump
Packaging

Based on
Based on
demand model
demand model

Production
Production
13300 bottles/year 13300 bottles/year
1.7 oz/bottle 1.7 oz/bottle
665 liters/year 665 liters/year
High-Speed
Homogenizing
Emulsifier
Capital Investment
Capital Investment
Production Costs
Production Costs

Max ROI
Max ROI
Perfume Results
Perfume Results
Formula of Perfume
Formula of Perfume
-
-
Max
Max
Happiness ~ 80%
Happiness ~ 80%
Top Note Top Note 0.50 0.50 Peony Peony
Top Note Top Note 2.32 2.32 Lemon Lemon
Middle Note Middle Note 0.50 0.50 Honeysuckle Honeysuckle
Middle Note Middle Note 0.50 0.50 Hibiscus Hibiscus
Middle Note Middle Note 0.50 0.50 Rose Rose
Base Note Base Note 1.09 1.09 Amber Amber
Base Note Base Note 1.09 1.09 Vanilla Vanilla
Base Note Base Note 3.85 3.85 Sandalwood Sandalwood
Base Note Base Note 4.65 4.65 African Musk African Musk
Diluent Diluent 8.5 8.5 DI Water DI Water
Solvent Solvent 76.5 76.5 Ethanol Ethanol
Function Function Volume% Volume% Ingredients Ingredients
PERFUME FORMULATION PERFUME FORMULATION
Maximum Happiness Decision
Maximum Happiness Decision

Based on project life of 10 years and Max
Based on project life of 10 years and Max
ROI @ 80% Happiness
ROI @ 80% Happiness

Revenue:
Revenue:
$ 600
$ 600

Total Capital Investment:
Total Capital Investment:
$286,000
$286,000

Total Annual Production Cost:
Total Annual Production Cost:
$500,000
$500,000

Total Profit:
Total Profit:
-
-
$315,000
$315,000

Return on Investment:
Return on Investment:
-
-
110.43%
110.43%
Formula of Perfume ~ 75%
Formula of Perfume ~ 75%
Happiness
Happiness
Top Note Top Note 0.26 0.26 Peony Peony
Top Note Top Note 2.98 2.98 Lemon Lemon
Middle Note Middle Note 0.26 0.26 Honeysuckle Honeysuckle
Middle Note Middle Note 0.26 0.26 Hibiscus Hibiscus
Middle Note Middle Note 0.26 0.26 Rose Rose
Base Note Base Note 1.73 1.73 Amber Amber
Base Note Base Note 1.73 1.73 Vanilla Vanilla
Base Note Base Note 6.99 6.99 Sandalwood Sandalwood
Base Note Base Note 0.54 0.54 African Musk African Musk
Diluent Diluent 8.5 8.5 DI Water DI Water
Solvent Solvent 76.5 76.5 Ethanol Ethanol
Function Function Volume% Volume% Ingredients Ingredients
PERFUME FORMULATION PERFUME FORMULATION
Most Profitable Decision
Most Profitable Decision

Based on project life of 10 years and Max
Based on project life of 10 years and Max
ROI @ 75% Happiness
ROI @ 75% Happiness

Revenue:
Revenue:
$ 820,000
$ 820,000

Total Capital Investment:
Total Capital Investment:
$255,000
$255,000

Total Annual Production Cost:
Total Annual Production Cost:
$565,000
$565,000

Net Profit:
Net Profit:
$170,000
$170,000

Return on Investment:
Return on Investment:
56.91%
56.91%
Market Scenarios
Market Scenarios

Three economic scenarios in question
Three economic scenarios in question

High economic pricing on raw materials
High economic pricing on raw materials

Average economic pricing on raw materials
Average economic pricing on raw materials

Low economic pricing on raw materials
Low economic pricing on raw materials

A standard deviation of 20% was
A standard deviation of 20% was
assumed
assumed

Raw materials contribute a large
Raw materials contribute a large
percentage of cost for calculating the
percentage of cost for calculating the
total product cost
total product cost
ROI vs. Happiness
ROI vs. Happiness
ROI vs. Happiness at differing economic scenarios
ROI vs. Happiness at differing economic scenarios
Risk Analysis for Max Happiness
Risk Analysis for Max Happiness
Distribution for ROI (%)
Mean =
-110.4282
X<=-111.91
5%
X<=-108.95
95%
0
0.2
0.4
0.6
0.8
1
-115 -113 -111 -109 -107


Mean ROI: Mean ROI: - -110.43 % 110.43 %
Probability of Occurrence: Probability of Occurrence:
~ 40 % ~ 40 %
Cumulative Probability Cumulative Probability
100% Chance of losing money 100% Chance of losing money
Distribution for ROI (%)
Mean =
-110.4282
X<=-111.91
5%
X <=-108.95
95%
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
-115 -113 -111 -109 -107


Risk Analysis for Maximum ROI
Risk Analysis for Maximum ROI
Distribution for ROI (%)
Mean = 56.9146
X<=51.44
5%
X<=62.33
95%
0
0.2
0.4
0.6
0.8
1
40 50 60 70


Mean ROI: 59.91 % Mean ROI: 59.91 %
Probability of Occurrence: Probability of Occurrence:
~ 12% ~ 12%
Cumulative Probability Cumulative Probability
100% Chance of gaining 100% Chance of gaining
money money
Distribution for ROI (%)
Mean = 56.9146
X <=51.44
5%
X <=62.33
95%
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
40 50 60 70


MiniMax Regret
MiniMax Regret

A regret analysis was
A regret analysis was
performed on low,
performed on low,
medium, and high
medium, and high
market values for raw
market values for raw
material cost
material cost

Based on MiniMax
Based on MiniMax
analysis F7 is the
analysis F7 is the
optimum choice
optimum choice
Regret Analysis
Regret Analysis
A regret analysis was performed on the perfume formulations at A regret analysis was performed on the perfume formulations at
the three economic scenarios the three economic scenarios
Traditional Traditional F7 Optimistic F7 Optimistic F7 Pessimistic F7 Pessimistic F7 F7
Regret Analysis
-175
-125
-75
-25
25
Scenario 1 Scenario 2 Scenario 3
Low Market Average Market High Market
R
O
I
F1
F2
F3
F4
F5
F6
F7
F8
Conclusions
Conclusions
Pure Ambition is profitable!
Pure Ambition is profitable!
Based on the following parameters:
Based on the following parameters:

75% Happiness
75% Happiness

Demand = 13,300 people
Demand = 13,300 people

Price = $60/bottle
Price = $60/bottle
Questions?
Questions?