THE DRONE PARCEL DELIVERY PROJECT
Your team has been asked to determine what the delivery cost, in terms of $N, needs to be set to, to be able to break even at the end of the 15-year time frame while also being competitive.
To help you to provide a response to this request you are required to present the following in your formal report to the “Automated Parcel Delivery” company planning design team who will then submit your document at the board meeting.
- Draw the Gantt charts pertaining to each of the Work Breakdown Structures for the Mechanical, Communication/IT and Electrical scope of work components as per Tables 5, 6 and 7 respectively. (Note: No Gantt charts can be hand drawn as this is a formal report. All charts are to be clearly labelled including total time duration in weeks). Each Gantt chart drawn is to fit to the size of an A4 sheet of paper [24 Marks].
- Draw an AOA diagram for the of the Electrical Engineering scope of works, starting from and including activity “AE” up to and including activity “UE”. Refer to Table 7 [10 Marks].
- Find and state the critical path and determine its duration in weeks [2 Marks].
- State by how many weeks equipping the switch room with the main switchboard and protection fuses and circuit breakers at the docking stations can be delayed by, without affecting the completion time of the Electrical Engineering component of the project [2 Marks].
- State by how many weeks can the Installation of the interruptible power supply equipment in the main switch room(s) can be delayed by, without affecting the completion time of the Electrical Engineering component of the project [2 Marks].
- State by how many weeks the Termination of the diverse 66kV cable from Western Power for power robustness and reliability at the Kewdale docking station can be delayed by, without affecting the completion time of the Electrical Engineering component of the project [2 Marks].
- Similarly, by how many weeks could the installation of the lightning and surge protection at all docking stations be delayed by, without affecting the completion time of the Electrical Engineering component of the project [2 Marks].
- On one A4 sheet of paper using the data given in Table 4 of the Appendix and incorporating information attained from question 1, draw the complete Gantt chart of the “Master Plan” for this project. Note the total duration time is to be given in weeks [8 Marks].
- Using the now completed Table 4 determine the overall expected project completion time from the initial tender, “Activity A” to the commissioning and handover of the complete project, “Activity K”.
- Clearly state how many weeks in total it will take to build and commission the five docking stations. This is a critical number as it will determine when the project can commence earning revenue [2 Marks].
- Show the derivation of the total annual revenue equation in terms of $N that is expected during the 8th year of operation [6 Marks].
- Draw on one A4 sheet of paper and clearly label the pre-tax cash flow diagram for the total project showing all relevant contributing cash inflows and outflows [ 10 Marks].
- The project is to break even at the end of 15 years (this includes all feasibility and construction times). By calculating the value of $N, determine the delivery charges fin dollar terms for each order value given that “Automated Parcel Delivery” company can negotiate an interest rate of 2.02% and 25 delivery drones are purchased. Also comment on the competitiveness of the calculated $N value (show your working and equations used*) [20 Marks].
- Alternative Scenario: How many additional delivery drones can be purchased if the negotiated interest rate in this alternative scenario is 1.89% and the delivery price of $N is fixed at $20, given that you are still required to break even at the end of the 8-year time frame. (Show your working and equations used*) [20 Marks].
- You are asked to look at a further scenario, where the “Automated Parcel Delivery” wants to set the delivery prices of $N at $15 and that the project must break even at the end of 12 years using a total of 30 delivery drones. Calculate the required interest rate value to be negotiated to achieve this. Give your answer as a %, to an accuracy of seven significant figures. (Show your working and equations used to calculate this*). Comment on the calculated interest rate [20 Marks].
- Part of your role is to select the engineering contracting company to carry out the build of the Electrical, Mechanical and Comms IT construction work. The list of accredited tenderers has been narrowed down to two companies. Both companies have provided their respective financial statements for the past two fiscal years. Refer to Appendix 2. Calculate the solvency, liquidity, and profitability ratios for each company (for both financial years) and display your calculations. Based on your calculations in about 500 words make your recommendation as to which company would be better placed to undertake this project. In your own words clearly explain your reasoning.
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