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Con Club - Fms Delhi: Online Induction Learning - Batch 2021 - Activity 3

The document contains 4 cases related to business decisions: Case 1 analyzes whether goats should walk or run into a processing room, finding running is more cost effective. Case 2 evaluates the optimal year for a company to enter a foreign market, determining year 4 would be most profitable. Case 3 reviews finances for a national zoo, including revenues from visitors and costs of maintaining pandas. Case 4 estimates the number of footballs that could fit inside an airplane based on data about an airline's operations.

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138 views3 pages

Con Club - Fms Delhi: Online Induction Learning - Batch 2021 - Activity 3

The document contains 4 cases related to business decisions: Case 1 analyzes whether goats should walk or run into a processing room, finding running is more cost effective. Case 2 evaluates the optimal year for a company to enter a foreign market, determining year 4 would be most profitable. Case 3 reviews finances for a national zoo, including revenues from visitors and costs of maintaining pandas. Case 4 estimates the number of footballs that could fit inside an airplane based on data about an airline's operations.

Uploaded by

tusharsinghal94
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Con Club |FMS DELHI

Online Induction Learning | Batch 2021 | Activity 3

Case 1: Whether to have the goats walk or run into the meat processing room.
No. of burger from 1 goat 20
Working Hours in a week 50
WALK RUNNING
Goat Processed each hour 10 25
No. of burgers per week 20*50*10 20*50*25
No. of burgers per week 10000 25000

Overhead $5,000 $10,000


Labour $1,000 $2,500
Total Costs of production per
$6,000 $12,500
week

Operating Cost per burger $0.60 $0.50

Since operating cost per burger is less while running, the manager should decide to make the goats
run.

Case 2: Year to enter the country for business.


Production Shipping Import Cost due to Total Selling
Year Net
Cost Cost Duty import duty Cost Price
Year 1 $40.00 $5.00 50% $22.50 $67.50 $50.00 ($17.50)
Year 2 $38.00 $5.00 45% $19.35 $62.35 $50.00 ($12.35)
Year 3 $36.10 $5.00 40% $16.44 $57.54 $50.00 ($7.54)
Year 4 $34.30 $5.00 35% $13.75 $53.05 $50.00 ($3.05)
Year 5 $32.58 $5.00 30% $11.27 $48.85 $50.00 $1.15

So the company should enter the market 4 years after the current year to make a profit.

Case 3: National Zoological Park case.


Area 163 acre
Founded 1889

Total Animals 1800


Species 300
Endangered
60
Species
Total Visitors 600000
Adult Children
No of visitors 300000 300000
Cost of ticket $15 $10
Revenue $4,500,000 $3,000,000

Panda Cost
Acquisition $890,000
Transportation $335,000
Enclosure $1,475,000
Consultation $200,000
Maintainence/year $300,000
Total $3,200,000

Case 4: Estimate the number of footballs that would fit inside an airplane.
Given

Destinations 100
Countries 11
Employees 55000
Departures/Day 4000
Points/Mile 1
Redeeming Points 10000
Deluxe Regular
Fixed Cost 500 300
Variable Cost/Mile 2 1
Old Scenario

Old Scenario Business Recreational


Probability 50% 25%
Miles/Year 10000 4000
Avg. Distance of Flight 250 1000
No of Flights 40 4
No of Deluxe Flight 20 1
No of Regular Flight 20 3
Revenue from Deluxe Flight 20000 2500
Revenue from Regular Flights 11000 3900

Total Revenue 31000 6400


This revenue is per year.

New Scenario Business Recreational


Probability 75% 50%
Miles/Year 10000 4000
Avg. Distance of Flight 250 1000
No of Flights 40 4
No of Deluxe Flight 30 2
No of Regular Flight 10 2
Revenue from Deluxe Flight 30000 5000
Revenue from Regular Flights 5500 2600

Total Revenue 35500 7600


This revenue is per year.

So in 20 years, a business customer will get 15 free tickets and a recreational customer will get 4 free
tickets.

Old New
20 year revenue.
Scenario Scenario
20 year revenue - Business $620,000.00 $695,000.00
Customer
20 year revenue - Recreational $128,000.00 $142,000.00
Customer

Thus the scheme is profitable in both the cases.

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