Monday, September 29, 2014

Week 0: Investment and Projections

As I've only started this process this week, I've got nothing but sunk costs, inventory, and projections to show for it.
I've got variable projected costs of about 48,000,000 per batch and a target of getting my first batch produced within a week.

Info Week Inflow Outflow Net
Actual 0 0 -77,836,602 -77,836,602
Projected 1 14,400,000 -2,376,000 12,024,000
Projected 2 28,800,000 -4,752,000 24,048,000

This is still a new venture so I'm not projecting very far. I've got a very heavy initial burden where I've placed purchase orders for enough materials to produce ~10 days worth of production. Of my investment, ~15,000,000 is for fixed cost structures and goods. Each unit of production costs approximately $1,000,000 on average, which indicates that my first full production completion should nearly pay off my fixed investments; however, I don't expect to complete production on this first set until week 3 or 4, depending on how smoothly things go. I hope to sell 12 units in the first week and 24 units in the second week, which is the basis for these calculations.

Note: Due to time constraints, this post is actually about 4 days late.. Hopefully I'll get better at this with time.

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