COST OF IMPLEMENTATION All amounts in One time On going Rupees Hardware Software Customising / configuring Data control Data

Base Management Education External Internal Full time project team (5) Outside consultancy (3) Miscellaneous Total Implementatio n cost 20000000 22185420 2000000 700000 400000 400000

13483656

1000000

150000 730000 2500000

30000 300000

1800000

90000

125000 62974076

50000 2970000

BENEFITS

Sales Possible % increase if product always available (make to stock items)+Possible % increase with shorter lead times (make to order items) Gross margin% Annual benefit for 50% of above Annual direct labour cost (250x100x260) Possible % labour cost saving with stable schedules & no material shortages Annual benefit from 50% of above Annual purchase material cost Possible % purchase cost saving with better material requirement information Annual benefit for 50% of above Estimated inventory holding cost (% of inventory value) Reduction in raw material inventory value (50% of the benefit) less Depriciation (50%) Total annual benefit

All amounts in Rs 10000000000

2% 30% 30000000 6500000 2% 65000 4200000000 2% 42000000 1.6% 1000000 10000000 63065000

NVP ANALYSIS

Asumming that the recurring cost remains constant for the next 5 years, to avoid the impact of inflati discount the cost by the risk free rate Assuming that the risk free interest rate in the market is 8% Particulars One time cost Expenses Present value of the savings over the five year period Net Present Value= ### 0 62974076 1 2970000 Year 2 2970000

3 2970000

4 2970000

5 2970000

###

###

###

###

###

Since the NPV is positive the company should accept the project

the impact of inflation in the cost we donot

Hardware costs Datacenter, space capable of housing, powering, backup power Special power for uninterrupted power supply Server hardware, LAN,WAN, Client server Disk Subsystem Disaster Recovery infrastructure Deprication (50% as per Income Tax Act, 1972)

Rs. 10,00,000 2,00,000 10,00,000 15,00,000 50,00,000

(at (at (at (at (at

4 4 4 4 1

units) 40,00,000 units) 8,00,000 units) 40,00,000 units) 60,00,000 unit) 50,00,000 10000000

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