Instructions:

Concepts:

NRE Cost = Non Returning Engineering Cost

Volume = total number of units produced

TotalCost = NRE + UnitCost * Volume

UnitCost = the cost to manufacture one unit of the product (materials and labor)

PerProductCost = UnitCost + NRE / Volume

PerProductProfit = the mark up per unit (difference between how much a unit is sold for and the PerProductCost )

UnitPrice = PerProductCost + PerProductProfit

TotalRevenue = the total amount of sales = (PeakRevenue * MarketWindow) / 2

PeakRevenue = the highest value of sales in a unit of time (week, month) - considered to be at the mid-point in the life time of a product (at w)

MarketWindow = life time of product = 2w

Delay in market entry = d = number of (weeks, months) that a product is launched in the market after the beginning of the market window

PercentageOfLoss (because of delayed entry) = d(3w-d)/2w²

TotalProfit = PerProductProfit * ( TotalRevenue (after subtracting the loss) - NRE ) / UnitPrice

Compute the revenue from selling a new generation of i-phone if the market window is approximately 2 years and at the peak of the sales, 8,000 items are sold /week in the US. The average price this product is sold for throughout its market life is $440.

a) what is the profit from sales if the mark-up for each item sold is 10%?

b) what was the NRE cost if the unit cost is $398?

c) what would be the loss (in $) if the market entry would be delayed by 10 weeks?

embedded systems