For Prof James ONLY!!!

Proposal for "A New Start-Up Company"

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Professor's name: Stephen Bartorillo

BUS 315: Cost And Price Analysis

July 20, 2017

Proposal for "A New Start-Up Company"

1. Describe the new start-up company that you have created. Include in your description the nature of your company, its mission and vision, your company's product, an analysis of your staff, and your target clientele.

DynaTech is a company that has emerged in the industry of drone navigation, and since it was established, it has been capable of developing a standard operating process, which has been essentially responsible for the acquisition, transfer, and identification of knowledge between the various company networks' sections. Due to the skills shown by its management in handling various concerns, the company has been proficient in developing a clientele in such a short period, where other institutions take years to attain the same. The vision of DynaTech is to create an improved form of expertise for all its customers in the most and best secure way possible. The mission of DynaTech is to provide the best technology available in the market, especially in the Drone Navigation System industry.

The policy for the human resource includes the provision of opportunities for rational people to grow in both professionally and individually to produce a better life every day for not only the workers but also its customers too (Burritt, Hahn & Schaltegger, 2002). The close association between the institution and the companies that it teams-up with provides DynaTech with the chance to make an examination of the elements that influence the performance of a company over a particular period.

1. Criticize VectorCal's forecasting method. Determine the appropriate forecasting approach for your company. Provide a rationale to support your determination.

VectorCal uses the time-series method of forecasting, which basically a "Time since the Last Buy" approach (Rowe & Wright, 2009). This method uses historical data to forecast future demand. It is not an efficient method because it assumes what took place in the past is what is taking place and will continue taking place even in the future; this not true especially in the drone navigation system industry. The forecast method cannot be used for long-term purposes because future trends are likely to be very different from the current ones. Depending on such a forecasting method will give unreliable results.

Being a company that has started and has no historical data, DynaTech decided to adapt the Delphi technique for forecasting. This method relies on opinions of experts and the predictions obtained through it have proved to be more accurate as compared to other methods. Expert opinions are assessed in successions that are keenly controlled to obtain the predictions. This method is reliable because the experts involved are drawn from different backgrounds, and they must be competent and knowledgeable (Armstrong, 2001). The approach is also based on current trends that are realistic.

1. Suggest the semi-variable, allocated, and indirect costs that you should address in the start-up phase of your company. Provide a rationale to support your response.

This cost remains unchanged or fixed up to a certain level of volume of production. For a start-up business, it is important that costs like these be estimated, so as not to halt the operations of the business. This cost should be fixed at least until a certain number of units have been produced by our company (Burritt, Hahn & Schaltegger, 2002). Direct costs are the ones that run particular schemes in our organization. These costs can be easily tracked down because they are used for items like salaries of employees or the needs of projects in the company. For a start-up company, the costs must be carefully set to meet the targets. On the other hand, indirect costs are responsible for multiple projects and a particular one as in direct costs. They finance activities that cannot be easily traced regarding how much each benefit.

All these costs are so important for the survival of a startup business; it is therefore advised that experts are involved in determining them. Here at DynaTech, we have employed a great group of accounts that have helped in the determination for pricing our goods and services to be the most competitive company in the market for supplying navigation components and systems.

References

Armstrong, J. S. (2001). Selecting Forecasting Methods. In Principles Of Forecasting (Pp. 365 386). Springer US.

Burritt, R. L., Hahn, T., & Schaltegger, S. (2002). Towards A Comprehensive Framework For Environmental Management Accounting—Links Between Business Actors And Environmental Management Accounting Tools. Australian Accounting Review, 12(27), 39-50.

Rowe, G., & Wright, G. (2009). The Delphi Technique As A Forecasting Tool: Issues And Analysis. International Journal Of Forecasting, 15(4), 353-375.