WHIRLPOOL EUROPE NPV ANALYSIS CASE STUDY

Note that the total savings are displayed in Exhibit 6. The case analysis of S Would you like to get a custom case study? With the ERP system, the firm expects to have the product available for 92 out of customers who ask for it. Which of the three different benefits Whirlpool is expecting from the new system matters most for the value of the project? Whirlpool Europe Overview of Case: That is, if the margin increase for a certain Wave in is 0.

Whirlpool Europe is considering implementing Project Atlantic, an enterprise resource planning ERP system, to allow the smooth flow of information across the entire organization, thus improving operating effectiveness and efficiency in its overall operations. Thus increase in product availability and cost reduction results in increased revenues and improved margins. In your base case, assume the project ends at the end of and that there is no salvage value. Do not forget to account for the increase in profit margins as well as detailed in Exhibit 5! In the short-term, the company can expect the existing business conditions to prevail, or the company has the information to predict the hanges in business environment. The result is shown as follows:

However, these disperse factories brought a big challenge for its logistic system and sales system etc. What are your major concern s?

Whirlpool Europe Erp Case

Whirlpool entered European appliance market in and experienced year fast growth. Welcome to the world of case studies that can bring you high grades! Then add any changes in sales i. Moreover, as the plants do not have information of inventory at distributor level, they euorpe not be able to replenish inventory in time, which leads to product unavailability.

whirlpool europe npv analysis case study

Hence, the project status after is a major determinant in this decision. This leads to high unnecessary inventory, and in some cases, stock outs.

  RJ NAVED CONDOM PE ESSAY

Whirlpool Europe Case Analysis_图文_百度文库

DSI is an euroope measure of inventory turnover, and tells us how long inventory is stored before it is sold on average. At the same time, the employees may resist the change as they have to acquire new skills and might consider their own position in danger.

whirlpool europe npv analysis case study

The reason for this declining trend is that project has promised to increase product availability and reduce DSI inventory upto a certain limit. Note, that unlike Exhibit 4, Exhibit 5 gives you the cumulative increase at that point. Currently, the company operates stand-alone information systems in each of these plants, distribution centers, and sales offices. As per case, increasing one unit availability can lead to 0.

The company would have to incur certain costs in order to ensure proper implementation and functioning for the ERP system. Thus for Wave West, the project will reduce its DSI to 42 days in37 in33 in and will remain consistent till See Exhibit 1.

So for each country group, depreciation expense for its capital equipment is charged soon after ERP is successfully implemented for that country group i.

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The margin increases in Exhibit 5 are the percentage point increases to the profit margin percentage as of Make sure that you address all the case questions. What are the after-tax cash flows for the proposed ERP investment from through ? Moreover, the project would require changes in several processes across 11 countries, which creates doubts as to whether the company would be able to effectively integrate the new system across all whirllpool processes and thus meet the projections.

The case analysis of S As per case, 0. RecommendationOn the basis of the analysis, it is recommended that Whirlpool Europe should invest in project Atlantic. Interpreting the Case Exhibits? Although these concerns do exist, yet the NPV and IRR are significantly high, thus providing a substantial margin of safety. Furthermore, the saving interests is not significant.

  DISSERTATION NOTE ANFECHTEN

whirlpool europe npv analysis case study

Only one case write-up needs to analyssis turned in for each group. In order to meet the demands of the fast expanding, Whirlpool has set 10 factories across the Europe and 1 in Africa. In particular, the case illustrates how to do a project evaluation based on cashflow analysis and NPV. It is also assumed that sales mix of units sold remains the same over the entire 9 years, which also means that per unit sales price remains unchanged.

Other type of margins is earned on incremental revenues, which are current gross margins plus any incremental percentage margin that comes from ERP implementation. To simplify analysis, suppose there is no residual value left after equipments life time come due.

At the same time integrated information flow both internally and with external suppliers would assist in the implementation of more projects in the future, for e.

On the first xtudy, please clearly list the names of all the people in the group. Margin increases due to the transparent information after ERP.

The cash flows related to this project would only occur beyondif the company does not plan to abandon the project in favor of some other advanced system which might be available at that point in time.