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    NISREEN WAYA
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    The document presents a cost-benefit analysis for implementing an inventory management system at a feed mill over a period of 5 years. It estimates implementation costs of $230,000 in year 0 and ongoing operating costs each year. Benefits are estimated at $150,000 in year 1 and increase each subsequent year, including tangible benefits and a variety of intangible benefits. A net present value is calculated each year to compare cumulative costs and benefits, showing the system becoming cost-beneficial by year 3.

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    COST-BENEFIT ANALYSIS.xlsx

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    The document presents a cost-benefit analysis for implementing an inventory management system at a feed mill over a period of 5 years. It estimates implementation costs of $230,000 in year 0 and ongoing operating costs each year. Benefits are estimated at $150,000 in year 1 and increase each subsequent year, including tangible benefits and a variety of intangible benefits. A net present value is calculated each year to compare cumulative costs and benefits, showing the system becoming cost-beneficial by year 3.

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    © All Rights Reserved
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    42 views2 pages

    Cost-Benefit Analysis

    Uploaded by

    NISREEN WAYA
    The document presents a cost-benefit analysis for implementing an inventory management system at a feed mill over a period of 5 years. It estimates implementation costs of $230,000 in year 0 and ongoing operating costs each year. Benefits are estimated at $150,000 in year 1 and increase each subsequent year, including tangible benefits and a variety of intangible benefits. A net present value is calculated each year to compare cumulative costs and benefits, showing the system becoming cost-beneficial by year 3.

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    of 2

    COST-BENEFIT ANALYSIS

    GENSAN FEED MILL


    Inventory Management System
    PERIODS (YEAR)
    COSTS 0 1
    Development Cost
    Inventory Managment System (80,000.00)
    Project Technical Expert (For Training) (16,000.00)
    Contingency Fund (4,000.00)
    Equipment (Computer set) (130,000.00)
    Operating Cost (5,000.00)
    TOTAL COSTS (230,000.00) (5,000.00)
    Discount Factor 1.00 0.87
    Present Value of Costs (230,000.00) (4,350.00)
    Cumulative Present Value Costs (230,000.00) (234,350.00)

    BENEFITS
    Tangible Benefits from new system 15,000.00
    Intangible Benefits from new system
    Promote accuracy 15,000.00
    Automated routine tasks 20,000.00
    Improve efficiency of staff 50,000.00
    Increase office productivity 30,000.00
    Replace paper processes 20,000.00
    TOTAL BENEFITS - 150,000.00
    Discount Factor 1.00 0.87
    Present Value of Benefits - 130,500.00
    Cumulative Present Value Costs - 130,500.00

    COST/BENEFIT ANALYSIS ₱ -230,000.00 ₱ -103,850.00


    FIT ANALYSIS
    FEED MILL
    agement System
    PERIODS (YEAR)
    2 3 4 5

    (5,500.00) (6,050.00) (6,655.00) (7,320.50)


    (5,500.00) (6,050.00) (6,655.00) (7,320.50)
    0.76 0.66 0.57 0.50
    (4,162.95) (3,983.94) (3,812.63) (3,648.69)
    (238,512.95) (242,496.89) (246,309.53) (249,958.22)

    16,500.00 18,150.00 19,965.00 21,961.50

    16,500.00 18,150.00 19,965.00 21,961.50


    22,000.00 24,200.00 26,620.00 29,282.00
    55,000.00 60,500.00 66,550.00 73,205.00
    33,000.00 36,300.00 39,930.00 43,923.00
    22,000.00 24,200.00 26,620.00 29,282.00
    165,000.00 181,500.00 199,650.00 219,615.00
    0.76 0.66 0.57 0.50
    124,888.50 119,518.29 114,379.01 109,460.71
    255,388.50 374,906.79 489,285.80 598,746.51

    ₱ 16,875.55 ₱ 132,409.90 ₱ 242,976.28 ₱ 348,788.30

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