Analysis 2: Walmart Customer Kiosk For this ana lysis you are asked to The sales associate labor rate is $10.00 per hour. evaluate a system proposal for Walmart, which is considering the installation of customer kiosks in their Su allow customers to search for products, tell them if the products are in stock, and show them on a map where in the store the products are located. Use the following facts to conduct a break-even analysis of the customer kiosk technology. percenters. The kiosks will The kiosks are also expected to increase the likelihood that customers will find all of the items they are looking to purchase. It is estimated that each store with kiosks will sell 60 additional items per day, averaging $3.30 per item. Costs Page 3 of6 Calculations The break-even analysis will cover a &vear period from 2017-2022. For each There will be a one-time cost of $19,000,000 in 2017 to develop and implement the system software. Starting in 2017 there will be an annual software maintenance fee of year: .Calculate the system costs. . Calculate the system benefits. . Calculate the net benefits of the system . Calculate the break-even total for the system. S16,000 per store in which kiosks are installed to cover bug fixes and upgrades. Walmart has a total of 3,029 Supercenters wit h kiosk installation occurring on the following schedule: 600 stores in 2017, 850 stores in 2018, 950 stores in 2019, and the remaining 629 stores in 2020 For the total time period: Each store will have 6 customer kiosks installed. Calculate the net present value (NPV) of the investment using a rate of There is a one-time cost per kiosk of $35,000 which represents the 15% kiosk's purchase and installation. There is an annual hardware maintenance fee of $7,000 to maintain Calculate the internal rate of return (IRR). At the bottom of your spreadsheet add the two questions below and include y them: our answer to each installed kiosk starting in the year the kiosk is installed Benefits The tangible benefits come from reduced labor costs and increased sales revenue r will Walmart break even on this project? The kiosks are expected to reduce the need for employees to spend Based on their target rate of return of 15%, should Walmart go forward time directing customers to products. This time savings will result in reduced labor costs equivalent to employing one employee during regular store hours from 8am-8p with this project? m per store where kiosks are installed. Supercenters are open 365 days per year
