Business Decision Modelling Project Case

OPIM 5641[pic 1]

Spring Semester 2016

Group Project

Team-10 Instructor:

Cuihong Li

Team Members:

                       Ashish Gupta

                       Jennifer Nielson

Monica Walters

Satinder Sondhi

EXECUTIVE SUMMARY

Due to high profitability of non-degree programs and surplus of funds, a University in Connecticut has decided to introduce a 3rd non-degree program in its line of other non-degree programs. This new program is aimed for teaching older generations of the community (55 years and more). Since this program is for social good, profit margins could be slashed by 25%. The University wants to have a thorough analysis of the feasibility and profitability of this new endeavor within the shell of all internal constraints, demand of the program and associated risks.

We, the team 10, worked as consultants with the university’s finance department and higher management throughout the duration of this project.

Objective of the Team:

• Build a base model that can help in analyzing the feasibility of the client’s new Business. Generate the optimized results through spreadsheet Engineering for maximum profits. Conduct thorough analysis of market fluctuations, internal parameter variations and associated risks.
• Generate Managerial-level insights and detailed Business-case findings. Identify scope for improvement in internal constraints and address the specific requirements.
• Deliver a highly efficient business model to address the problems at hand.

“The work contained and presented here is the work of Spring 2016 class Team#10 and Spring 2016 class Team#10 alone”

I.   Feasibility and challenges

BACKGROUND

Currently, the University offers 8 ‘degree’ and 2 ‘non-degree’ programs. Every year, a permanent budget of 6M comes to the university as sponsorship from state to support 8 degree programs. The non-degree programs are typically self-funded from tuitions and other sources of revenue. However, every fiscal year there is a surplus of 500,000, on average, which university decides to allocate to areas in need at their own discretion. This year, university is considering the benefits of starting a 3rd non degree program. The surplus of permanent funds can be allocated to start the new non-degree program. The 2 other non-degree programs, which are running from last 5 years, have generated average profit of $100,000 every year. Since this program is on offer to the 55 year and older community, profit expectations can be sacrificed for the social good by 25%. Due to space constraints enrollment cannot exceed 600 (10% of space) students. Also, student-teacher ratio can’t exceed 30, as per University policy.