Delicar Application

What is it?

Delicar: It is an application and a website that allows you to shop and meet all your daily needs with just a click of a button.

What makes it special?

Since the appearance of the Corona virus, many of our daily habits have changed, as many of us have become afraid of mixing with humans.

And the tight curfew hours do not allow us to spend our daily needs comfortably.

Also, not many of us have enough time to

shop.

And from here the idea of the Delicar application began

Why Delicar App?

Delicar has all your daily needs, non-daily needs (E.g. : Electronics, Clothes etc.) You dont have to waste your time to visit the mall to buy this stuff. You can easily open the app and order your needs and it will be delivered to your door.

But in this project, we are going to talk specifically about our food needs and how this app is the best competition among other food delivery apps.

Features:

1. There is a timer and a map that shows where the delivery man is and when it will be exactly delivered to your door.
2. If you have a fridge with advanced technology, you can connect the app with it, so you will get an alert if anything of your food has finished.
3. There will be different types and methods of paying (Cash, Visa, PayPal) so you dont have to go to ATM to get cash.
4. Easy Order Placement.

Why did we choose this idea?

First of all, it is a unique idea that no one has implemented. Also, every business has the same goal that is to meet customers satisfaction and needs.

So why dont we meet them while we can get a competitive advantage by making our customer relaxed in his home.

But as we mentioned previously, today we will define our talk only about the food section of all kinds in this mobile application, and its features compared to other applications.

Who are our competitors?

Our biggest competitor in Jordan is Talabat because it has the same nature of work, but the features of our application are more modern and developed.

But in fact, until now if we look at the application completely without specifying any particular division, we will not have competitors unless you count other typical markets as a competitor (speaking locally).

So, changing the typical shopping to using the app will be very successful, because we make our customers relaxed, and it can save money and time.

financial details:

First of all, and before we start working on the application, we must know the expected costs and to make sure that we are able to cover it, so that the work will be very successful.

The process of calculating the cost of creating the application is carried out according to the following formula:

App build price = development time x hourly rate

Development time:

• Define features.
• collect the times necessary to develop each of those features.

Hourly rate:

• The average hourly rate varies from one region to another in the world.
• Most developers from the Middle East earn between $40 and $60 per hour.

(And the prices in the same area are variable; it depends on the experience and competence of the developer)

Example:

Suppose we need one year (5 days working in a week) to finish working on this application and to have all the features done. During this working time (per day is 6 hours), the average hourly rate for developers is $10.

(At the moment we don't want to bring developers with a very high experiences. that would be considered too risky, because until now we are not sure that we will really be successful in this business)

App build price = development time x hourly rate

Development time (365 days):

Working days in a week: 5 days -----<So working days in a year: 240 day

Working time on a day: 6 hours-----<So working hours in 240 days :1440 hours

Development time = 1440 hours

Hourly rate = 10 $

App build price = 1,440 * 10$ = 14,400 $

Contribution margin income statement for one year in the future:

Delicar application has a product (family meal is only sold in this app) with the following information: selling price per unit = 20 $, Variable cost per unit = 10 $, number of units sold = 15,000 unit, and the Fixed cost was 40,000 $.

Sales Revenue	300,000
Variable Cost	150,000
Contribution Margin	150,000
Fixed Cost	40,000
Net Operating Income	110,000

• Sales revenue = selling price per unit * number of units sold

= 20 * 15000 = 300,000

• Variable cost = Variable cost per unit * number of units sold

= 10 * 15000 = 150,000

• Contribution margin = sales revenue variable cost

= 300,000 150,000 = 150,000

• Net operating income = contribution margin fixed cost

= 150,000 40,000 = 110,000

CVP analysis based on the previous Contribution margin incomestatement:

• We want to find the amount of sales needed to achieve the break-even point (insales)

BEP in sales = fixed cost / contribution margin ratio

Contribution margin ratio = contribution margin / sales revenue

= 150,000 / 300,000

= 0.5

SO, BEP in sales = 40,000 / 0.5

= 80,000

• Also we want to know the break-even point in units

BEP in units = Fixed cost / Contribution margin per unit

Contribution margin per unit = contribution margin / number of units sold

= 150,000 / 15,000

= 10

So, BEP in units = 40,000 / 10

= 4000

Target profit:

• What is the number of units that must be sold in order for the company to make a profit of 110,000$?

Profit = Sales Revenue Variable cost fixed cost

= 300,000 150,000 40,000

= 110,000

Target profit in units: the number of units that must be sold in order to attain the target profit

= Fixed cost + Target profit / Contribution margin per unit

= 40,000 + 110,000 / 10

= 15,000

• What is the amount of sales must they accomplish in order to attain this profit?

Target profit in sales: the amount of sales revenue that must generated in order to attain the target profit

= Fixed cost + Target profit / Contribution margin ratio

= 40,000 + 110,000 / 0.5

= 300,000

Margin of safety:

• we want to know how much sales do the application generate above its break-even point sales

Margin of safety = sales revenue BEP in sales

= 300,000 80,000

= 220,000

• and also we have to calculate the margin of safety ratio:

Margin of safety ratio = Margin of safety / Sales revenue

= 220,000 / 300,000

= 0.7

Operating leverage:

• What will happen if the applications sales revenue increased by 10%?

Operating Leverage = Contribution Margin / net income

= 150,000 / 110,000

= 1.4

% change in sales * operating leverage = % change in net income

10% * 1.4 = 0.14

If the sales revenue increased by 10% then the net income will also increase by 0.14. Required : - The budgets: the future budgets for the period of 3 months based upon the financial data estimated and the expectations for the business growth. (5 grades)