Dashboard Logistics Inc. $($DLI$)$ is looking to revolutionize the supply chain market by reducing

the complexities that smaller firms experience in the supply chain process.

Currently, DLI gains customers through direct sales. They estimate it takes

approximately $16$ hours of sales effort and the associated time to $$on board$$ a customer. DLI is

targeting a narrow niche of customers characterized as having pre$-$packaged physical products

that require no additional preparation. They plan to attract customers who want to know exactly

when and what they are going to pay. DLI plans to grow with these customers handling their

fulfillment as the customer expands. As DLI grows, it will then plan to take on medium sized

companies who want to upgrade their supply chain process.

There are approximately $8,000$ startups in the US today in which DLI can target. Based

on the company$$s calculations, this is approximately $$30$ million in potential revenue. Secondary

research indicates that the average startup company starts by shipping $3,000$ orders$/$month and

grows to $5,000$ orders$/$month after one year.

DLI has three main competitors, Boatline which has their services online, but requires

customers to know both the location of their warehouse and how best to ship their products to the

warehouse. Choosing a warehouse can be one of the most costly factors in logistics$.$ S$-$

Commerce includes the entire logistics process, but focuses mainly on e$-$commerce. Their third

customer, Jungle, prefers only large customers.

It is November and DLI is seeking a $$10,000$ grant from IDEA$$s Funding Board to help

grow their company. DLI plans to use part of the funds to hire a designer to improve the user

experience. The improved user experience on the website will facilitate the process of gaining

customers.

DLI also plans to use some of its sales efforts to start strategic partnerships with company

incubators to become preferred vendors and be able to reach more startups. Ideally, DLI plans to

be relevant to physical product companies at every stage of the supply chain. After DLI has built

up their user interface and has on$-$boarded $10$ paying customers, they plan to target popular

newspapers, magazines and social media platforms to write content about the innovative nature

of DLI$$s business model.

As part of the funding process, DLI has developed projected sales and expense forecasts,

with and without funding. These are displayed in Tables $1$ and $2.$ As part of the stage gate

process, DLI has a meeting with the IDEA Board relative to their funding request, strategy and

projected business plan. In preparation for the meeting, the DLI team $$ largely current or

recently graduated software engineer majors at Northeastern University $$has asked for your help.

As a student in DMSB and someone who has successfully completed the managerial accounting

course, they know that you can help them prepare for their meeting. You think that this is a great

opportunity for you to put your managerial accounting skills to work in an advisory role for these

entrepreneurs. Knowing the power of managerial accounting data, you anticipate the following

questions to be asked. You should prepare cogent answers to these questions, draw relevant

insights and provide any supporting exhibits and$/$or visualizations that you believe will

illuminate your analysis. You should use Excel for your analyses. In your advisory role, you

need to prepare DLI to pitch their idea for funding.

REQUIRED QUESTIONS

$1.$ Describe the industry and the competitors in which DLI is entering. Discuss DLI$$s

strategy to compete in this market.

$2.$ In what specific ways $$ financially $$ would the grant funding help DLI? How would

this be expressed quantitatively? What further questions might you want to ask of

this venture $($and is there any other types of data that you think would be useful?$)$

$3.$ Classify the costs by behavior using number of transactions $($customer orders$)$ as the

activity. Be sure to provide both quantitative and qualitative support when applicable.

Does there seem to be an opportunity to substitute fixed for variable costs $($or vice

versa$)?$

$4.$ Prepare a contribution margin income statement by month with and without the

funding. Comment on DLI$$s cost structure.

$5.$ Calculate DLI$$s breakeven point. How does breakeven with and without the grant

financing compare? Show your calculations in detail and provide any assumptions

and$/$or approaches that you took to frame an answer to this potential question posed

by the Board.

Assume grant funding for these questions

$6.$ Which forecasts will the Board be most concerned about accuracy and$/$or not meeting

the projections? Why? How should DLI respond to alleviate some of the Board$$s

concerns?

$7.$ Prepare a sensitivity analysis $(+/-10\%)$ around the average transactions per customer

for the Q$1$ forecasts $($present as a contribution margin income statement$).$ What can

you conclude from the sensitivity analysis?