1) Develop a critical appreciation of the concepts and philosophies of Project Management
2) Apply Project Management tools and techniques to specific projects
3. The project is dependent on externally supplied systems that will have implications for the initial and ongoing cost structure of the business. The project is to introduce new electronic stock control and labelling systems within your new storage depots. In terms of options you have decided that there are two possible contenders Airton Ltd and Descan Services. The systems will be rolled out to each of your depots which will lead to increased efficiency sayings and a better customer experience. Currently you have one depot but financial planning is based on a network 22 depots in all, in the future. The following information is provided: i. Annual maintenance cost per depot will increase by: 5000 for the rst three years. This is estimated to be increased by 15% (each yearlfor all subsequent years during the lifetime of the equipment ii. Annual running costs for the systems per depot will be: 3000 per annum for Airton dropping to 2000 per annum after all depots are completed. The comparable gures for Descan are 2000 until all complete and then 1250 per annum after that. iii. All costs will be accounted for in the year that the depots are completed, shown at the year end iv. Annual sayings per depot will be 12000. This will be realised in the year after completion of the system in the depot {shown at the yearend] v. Airton have quoted 2000 per depot plus a cost of 15000 up front vi. Descan's quote is 2500 per depot plus a cost of 5000 up front. vii. The rate at which depot installations will proceed is as outlined in the table: Number of depots completed each year _-__ _- new swims __ viii. A sixyear period from the commencement of the work should be used as the time horizon for the evaluation of the viability of the two systems under consideration. ix. Ignore taxation. Assume the cost of capital is 14%. Summarise the information and advise the management board whether to accept the quote from Airton Ltd or Descan Services based on Payback period, Net Present Value. Based on your chosen supplier, what would the Internal Rate of Fleturn be? Discuss and explain the results of your analysis
