Assignment 2: Price Analysis for the Navigation System
Robert Gonzalez
Professor Stephen Bartorillo
BUS 315: Cost and Price Analysis
July 26, 2015
Analyze your company’s cost classification for pricing of the navigation system. Defend your cost classification to the US government.
Considering that our only competitor in the field of navigation systems is VectorCal, it was important for us to carefully determine pricing that was, not only competitive enough to beat the competition, but affordable enough to increase customer demand. Our Analysts have worked diligently in reviewing the cost to manufacture our product from all different angles and scenarios in order to create a price that meets the terms of the contract and allow us to
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Now that the initial startup phase of our company is complete, our team of Analysts has determined what we have deemed reasonable costs, considering that our definition of “reasonable” aligns with yours. In order to defend our stance on what we feel is reasonable, we have considered the nature of costs, such as air travel for business meetings and the use of our high quality materials, by researching the market for affordable, high-quality materials and have put standards in place to keep air travel valid for these government contracts. With the understanding that although the nature of the cost may be considered acceptable, the amount of the cost may not meet standards when it comes to costs defined as “reasonable” (Murphy, John Edward; Guide to Contract Pricing, pg. 47). With this in mind, we continue to research the market to find adequate material at a much lower cost. We have used this data to create what we feel is a cost that would not and should not exceed what any prudent person would pay in a competitive business environment. We are aware of the competition and have made it a strong incentive of ours to save on costs for the items that we are providing to you. Allowability of our costs is guided by the 52 generally applicable cost principles that are based on specific laws and policies (Murphy, John Edward; Guide to Contract
6. How does the current reimbursement level of $140,000 per case affect a decision to use or not use marginal cost pricing? Does the amount of excess capacity affect the decision? Why?
For instance, there are generic principles of pricing of desired net income, competitive position, and market structure. According to (Cleverly, Song, & Cleverly, 2011), every business must generate enough revenue through its sales of products and services to sustain its operations and provide for the replacement of its physical assets as well as provide a return to its investors. Partners Healthcare System and among other organizations must recognize levels of pricing, so inadequate pricing doesn’t accumulate to lead to business disaster.
PROJ 592 All Discussions Week 1 - 7 Purchase here http://devrycourse.com/proj-592-all-discussions-week-1-7 Product Description PROJ 592 Week 1 DQ 1 WBS Construction PROJ 592 Week 1 DQ 2 Project Cost Estimates and Assumptions PROJ 592 Week 2 DQ 1 Cost Components PROJ 592 Week 2 DQ 2 Estimating Processes PROJ 592 Week 3 DQ 1 Project Schedules PROJ 592 Week 3 DQ 2 Sensitivity Analysis PROJ 592
In this case, vendor-specific objective evidence of fair value is limited to the price charged when the same element is sold separately. Of the $12,000 Feb 1 agreement, $10,286 will be allocated to the Volcano System and $1,714 will be allocated to the PCS. The portion of the fee allocated to post-contract customer support shall be recognized as revenue ratably over the term of the post-contract customer support arrangement, because the post-contract customer support services are assumed to be provided ratably (PCS 985-605-25-67).
Budgets and Planning. To begin with, the program, like the organization, fosters an open and collaborative environment for the process to take place. In this regard, it is, therefore, impossible for any one space or environment to be able to accommodate every conceivable project or application that is “thought up”. Therefore, certain perimeters and guidelines need to be established to assess costs with the program and help determine a course of action in future planning. As we are discussing costs, we assume there is a
Pricing is a pertinent issue in procurement and acquisition in organizations. Consumers buying the commodities of an entity should get clarity on pricing related issues. There is uncertainty in Pro
According to a purchase agreement, a cost from SFM will be transferred to Can-do. Thus, this report classifies a cost into two groups, which Can-do willing to incur and which not. Furthermore, it states several risks in accordance with our assumptions that are likely to occur during the 20-year period.
SPC approached companies making navigational buoys as a natural marketplace for his or her products, but observed a curious situation. The primary employer in the business turned into automatic strength, a battery manufacturer. figuring out that sun cells might eat into their battery earnings, automated had bought a sun navigation resource prototype from Hoffman Electronics and shelved it. Seeing there has been no interest at automated energy, SPC turned to Tideland sign, every other battery employer shaped by way of ex-computerized managers. Tideland delivered a solar-powered buoy and changed into quickly ruining automated's commercial enterprise.
Overhead costs include rent, office staff, depreciation, and other. Once the flexible budget was complete, variances between the actual and flexible budget could be calculated (Exhibit B). The variance for frame assembly was favorable with actual costs being $82,663 less than in the flexible budget. The variances for wheel and final assembly however were both unfavorable. Wheel assembly had an unfavorable variance of $50,650, while final assembly variance was the highest at an unfavorable variance of $231,200. Taking into account these three aspects of direct cost, direct cost has an unfavorable variance $199,187. Although most overhead costs are fixed, 2/3 of other costs are variable and increase with the increased production. As shown in Exhibit B, overhead variance is unfavorable at $60,000. The direct cost variance and overhead variable together lead to a total unfavorable variance of $259,187.
While applying the found research, I used my mathematical abilities to ensure the data presented regarding costs verses depth of materials were accurately given. I also did a cost analysis based upon the data provided regarding durability and maintenance to compare the options in relation to your yearly
A comparison of the direct and indirect cost that is associated with the navigation system within VectorCal and my company.
Highlights • Large-cap growth stock with a market cap of $11.68 billion. • Garmin has the number one GPS market share of 50% in the U.S. and the number two GPS market share in Europe of 16.7% • Consumer demand for GPS products will continue to increase as technology improves and produces new and innovative products. • High historical ROIC, ranging from 39.4% to 47%, which is significantly higher than its 11% WACC. • Garmin’s revenue is likely to grow 35% per year for the next five years. • Target price of $60.76, is based on a P/E multiple valuation using a P/E of 19.6. • The major
What are the advantages and disadvantages of cost-plus pricing relative to the TSCC pricing program?
In the meeting a new price of $475 was put forward by the design team. As Tony Barren didn’t want a situation to be like when he and his team launched sonar project, he thought the pricing was fair enough. But still difference of opinion prevailed. The sales team believed that the price was in the higher side and we wouldn’t be able to sell the product. They felt the price was not competitive and we would lose our market share. There were arguments that the product could be introduced into the market at $425 and further changes could be incorporated later. There were even suggestions of dropping the product. There prevailed a ‘go/no-go’ situation about the product launch.
When a company do their research on doing business deals or negotiating with the federal government, they should use various types of insider reporting to familiarize themselves with this process. Utilizing these various reports enables the business team’s negotiating firm to attain the information necessary to learn what the government is will ing to pay for their GPS systems. During your inquiry process, you want to ask questions that are informative and relative towards the negotiation process, in order to help you close the deal with at the end of the process. By asking these questions to