Description

Assignment Overview and Requirements

 Use the information provided, for PV and Risk, in order to complete the tables of

data for each scenario.

 Discuss the calculations in detail. Describe what the difference between each type

of financial tool is (NPV, PI, ECV….), how it’s calculated, and the strengths and

weaknesses of each tool.

 In depth Discussion on relevance of the four (4) scenarios – discuss what each

scenario is, and how each scenario builds and improves upon the previous, as well

as why such evolution is important in go/kill decision gates. Think real-world…

 In depth discussion on important sections from the text – where did you gain the

technical skills, reasoning skills, and overall background knowledge required for this

assignment (include proper citations, page numbers, etc. according to APA

formatting requirements)

 Each scenario has a specific outcome. Discuss the similarities and differences in

those outcomes. How do the outcomes differ from your predictions? How are the

outcomes similar to what you predicted?

 Discuss Risk – what factors play into Risk of technical success and failure, as well as

commercial success and commercial failure? Discuss how risk can be understood

and why it’s important to understand risk. Use data and other appropriate sources.

Focus on differences in Scenario 3 and Scenario 4.

 Describe, in detail, whether this analysis outcome is the only information needed in

order to properly select a project in the Go-to-Development gate.

 Cite three sources that review financial analysis as a means for go/kill decision

criteria

 Compare and contrast each of the scenarios and provide a final suggestion on the

type of analysis that should be completed AND what the decision is for each project.

Assignment Background

You are the senior manager in charge of innovation at your company. Over the past several years you

company has done, only OKAY, in terms of developing a new-product development portfolio. After

attending Trine University Innovation Days and listening to students discuss the importance of several

strategies in selecting profitable projects through managing resources and making tough decisions on what

projects live and what projects die, you have decided to take this approach to developing your company’s

portfolio.

After reviewing these strategies for new-product development with your director of R&D, he has decided to

provide you with the necessary budget and man-power to revolutionize your company’s new product

portfolio. However, he noticed several interesting analysis tools based on your review of the Innovation

Days, and has tasked you and your team with presenting four (4) scenarios for his review before moving

forward with the go/kill decision point.

GE 5113 Midterm Assignment Spring 2016

As luck would have it, your team has passed through Discovery and Scoping, and in the second screen you

have already narrowed the number of projects to nine (9). You are in Stage Two (2): Building the business

case. The scenarios your director has provided you are as follows:

 Scenario 1 – NPV, Business as Usual

Eliminate the Negative Projects

The team has been working throughout the Pre-development stage in order to get an understanding

of the present value of each of the (9) projects by understanding market pricing and the position

within the market of each of the prospective projects, among other things. This analysis has given

the team accurate information surrounding the overall development costs and costs to

commercialize for each project as well. As a part of your normal business strategy, prepare a report

analyzing the net present value of each project, rank those projects, and provide a Go/Kill

recommendation for each.