BSS002-6 Business Data Analysis Report: Solar-Powered Camping Tent

This report presents a comprehensive business data analysis of a solar-powered camping tent, addressing financial planning and risk analysis. The assignment requires developing a financial planning model to determine the impact of sales volume and price changes on net profits over four years, considering inflation and tax rates. It also involves analyzing 'what-if' scenarios to assess profitability under different inflation and sales conditions. Furthermore, a risk analysis is conducted on a new rainwear product, using simulation to evaluate potential outcomes based on factors like selling price, variable costs, and sales volume, with associated probabilities. The report includes recommendations on simulation results, including the worst and best results, mean profit, and risk interpretation, providing insights into the product's financial viability.

Unit Title: Business Data Analysis
Unit Code: BSS002-6
Referral work for Assessment 1: Individual Report – It is expected that each student work independently on all the tasks set
out in this assignment, applying problem solving strategies and selecting appropriate techniques in modelling and simulation in
order to produce an individual report according to the guidelines provided. This individual work must be your own work only with
no consultation with others. The individual report must not exceed 2,000 words. Submit your completed report only via the
turnitin link which will be available a week before the assignment submission deadline in the “Assessment & Feedback” folder.
Individual feedback will be provided within 15 working days and is based on: How well did your work meet the stated
assessment criteria? and How could you improve your future performance in this type of task?
Assignment Title: “A Solar-Powered Camping Tent”
Issued date: Thursday 08th September 2016
Submission due date: Friday 15 October 2016
A single report per student should be submitted via the TURNITIN link in the Assessment folder. Assignment must not be e
mailed under any circumstances.
Unit co-ordinator’s name: C F Shooshtarian
Threshold standards
Assessment
number In order to pass the assessment you will need to:
1 Develop a basic mathematical model of a business scenario.
Use Excel to construct charts and summary measures to assess the essential features of the model.
Grading/
Criteria
A+ A A- B+ B B- C+ C C- D+ D D- E
80-
100
75-
79
70-
74
67-
69
64-
66
60-
63
57-
59
54-
56
50-
53
47-
49
44-
46
40-
43
35-39
Research,
synthesise and
produce a technical
report
Communicate your
findings clearly
and concisely.
Recommend
solutions to
provide a better
insight to the
problem.
Justifying your
choice in a
technical report
which has a
clear structure and
logical sequence;
tables, diagrams
and figures are
appropriate,
clearly labelled
and interpreted;
accuracy;
objectivity;
continuity;
conciseness.
Communicate
your findings
clearly and
concisely.
Recommend
solutions to
provide a better
insight to the
problem. Justifying
your choice in a
technical report
which has a clear
structure and
logical sequence.
Communicate
your findings
clearly and
concisely.
Recommend
solutions to
provide a better
insight to the
problem. A report
which has a clear
structure and
logical sequence.
Communicate
your findings in
your report and
recommend
solutions to
provide a better
insight to the
problem.
Communicat
e your
findings in
your report.
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A Solar-Powered Camping Tent
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The Concept Tent (also known as the solar powered tent) was thought up because of demand by
nomads, recreational campers, and disaster victims. Tents are typically used as overhead shelter for
festivals, weddings, backyard parties, and major corporate events and the fact that all tent users need
to keep in touch with their families, friends and colleagues while they’re for example, camping and
roaming around the festival site.
Kaleidoscope and Orange Company designed it in partnership to celebrate Glastonbury Festival. Its
design is the revolutionary new way it collects direct sunlight. The idea is that specially coated solar
threads are woven into conventional fabric so designers wouldn’t have to use fixed solar panels to
harness the energy. It would also have three directional glides that can be moved throughout the day
to maximise solar efficiency and energy collection.
But the most amazing bit about this concept solar powered tent is its central wireless control hub
which lets you see the amount of energy being generated and used, as well as sending out a wireless
internet signal for anyone who needs to surf the internet.
The control hub also has a wireless charging pouch which powers mobile phones and other portable
devices without the need for messy wires and multiple chargers. The ‘magnetic induction’ technology
passes an electric current through a coil embedded in the charging pouch and this in turn generates a
magnetic field which creates a charge and powers the battery.
Also controlled by the central hub is the most amazing bonus for the ultimate posh camping
experience… an internal heating system. This takes the form of a heating element that’s embedded
within the tent’s groundsheet giving under floor heating that can be triggered automatically once the
temperature falls below a set level.
The market demand for the Concept Tent is estimated to be 2,000 units in its first year of production
and expect to increase sales by as much as 10% per annum thereafter. The variable costs per unit
are estimated as follows: raw materials, £8.00; packaging, £2.00; direct labour, £5.00; distribution,
£3.00.
The inflation rates for the next three years are forecast to be 3%, 5% and 6%. Inflation will affect
variable costs for the product but fixed costs are likely to remain at the same level of £10,000 over the
next four years. In calculating profits over the next four years, the tax rate can be taken as 20%.
Kaleidoscope and Orange intend to sell the Concept Tent at £65 for the first year with an annual
increase of £2.00 thereafter.
Task 1
(a) Kaleidoscope and Orange have asked you to develop a financial planning model so that they can
determine how net profits would be affected by changes in planned sales volume and product price
over years 2 to 4.
(b) Having built the financial planning model, Kaleidoscope and Orange now want to look at three
‘what-if’ scenarios.
 Scenario 1: Suppose inflation is predicted to be 2.5% during the second year and 3%
thereafter. What would be the profitability of the new carving knife in these circumstances?
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 Scenario 2: Suppose the Company decides to sell 3% more units per year as well as
increasing the current selling price by 10% per year. What would be the effect on the ‘net
profit after tax’ for each year?
Kaleidoscope and Orange have decided to make a major capital investment in the introduction of a
Rainwear that acts as smart as it looks. Effective rainwear keeps out the rain, but no membrane
breathes well enough to keep you comfortable during exertion. When rainwear is necessary, this
design offer unique physical venting approaches to keep you more comfortable.
There is usually a large amount of uncertainty associated with the development and marketing of any
new product, e.g., the size of potential sales, the ideal selling price of the product, and the
manufacturing costs. These uncertain factors are best represented by appropriate probability
distributions, and the project’s profitability can then be investigated using simulation. Such an
approach is generally referred to as ‘risk analyses.
Kaleidoscope and Orange has asked you to perform a risk analysis on the marketing of their new
rainwear product. The capital investment required to market the product is £12,000. The factors
associated with the new product and their respective probabilities are provided in Table 1.0 below:
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Table 1.0: The factors associated with the new product and their respective probabilities
Selling Price Probability Variable Cost Probability Sales volume Probability
£32
£34
£37
0.3
0.4
0.3
£8
£10
£12
0.4
0.4
0.2
10,000
15,000
20,000
0.25
0.50
0.25
Task 2
Prepare a report that discusses the general development of the spreadsheet simulation model, and
make any recommendations that you have regarding:
a) The worst and best results obtained in a simulation of 1000 trials;
b) The mean profit and its corresponding risk;
c) Interpretations of your findings.
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