PLAYBOOK Training Series: Graphical Economic Model - Feasibility Studies to Improve Products
1. This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
Graphical Economic Models of
Various Project Types
Feasibility Studies to Improve
Products
The following example came from an actual customer. Sales
curves differ customer to customer and project to project.
Your case may not look like this, however this gives you a
picture of these concepts you can modify to your specific case.
PLAYBOOKHQ.co
@PLAYBOOKHQ
2. Profit (Volume x Margin)
Feasibility Studies to Improve
Products A & B
Product A Value (before cost)
No Project
(Do Nothing)
Product B Value (before cost)
No Project
(Do Nothing)
0
Today
PLAYBOOKHQ.co
@PLAYBOOKHQ
Time
3. Profit (Volume x Margin)
Feasibility Studies to Improve
Products A & B
Product A Value (before cost)
Project A on time
Product A Value (before cost)
No Project
(Do Nothing)
Product B Value (before cost)
No Project
(Do Nothing)
0
Feasibility
Duration
Today
PLAYBOOKHQ.co
@PLAYBOOKHQ
Project A
Duration
Start Now
Project A
Completion
Date
Time
4. Profit (Volume x Margin)
Feasibility Studies to Improve
Products A & B
Product A Value (before cost)
Project A on time
Product A Value (before cost)
Project A 1 mo. late
Product A Value (before cost)
No Project
(Do Nothing)
Product B Value (before cost)
No Project
(Do Nothing)
0
Feasibility
Duration
Today
PLAYBOOKHQ.co
@PLAYBOOKHQ
Project A
Duration
+1 mo.
Start Now
Project A
Completion
Date
Time
5. Feasibility Studies to Improve
Products A & B
Profit (Volume x Margin)
Product A
1 mo. Cost of Delay
Product A Value (before cost)
Project A on time
Product A Value (before cost)
Project A 1 mo. late
Product A Value (before cost)
No Project
(Do Nothing)
Product B Value (before cost)
No Project
(Do Nothing)
0
Feasibility
Duration
Today
PLAYBOOKHQ.co
@PLAYBOOKHQ
Project A
Duration
+1 mo.
Start Now
Project A
Completion
Date
Time
6. Profit (Volume x Margin)
Feasibility Studies to Improve
Products A & B
Product B
1 mo. Cost of Delay
Product B Value (before cost)
Project B on time
Product B Value (before cost)
Project B 1 mo. late
Product B Value (before cost)
No Project
(Do Nothing)
0
Feasibility
Duration
Today
PLAYBOOKHQ.co
@PLAYBOOKHQ
Project A Project B
Duration Duration +1 mo.
Start Now
Project B
Completion
Date
Time
7. Feasibility Studies to Improve
Products A & B
Profit (Volume x Margin)
Product A
1 mo. Cost of Delay
0
Feasibility
Duration
Today
PLAYBOOKHQ.co
@PLAYBOOKHQ
Project B
Duration
Start Now
Project B
Completion
Date
Product B
1 mo. Cost of Delay
Time
8. Want to Learn More?
For an overview of these concepts, start here
– Project Economics
Read more about making project decisions based on economic
impact on Audible Ready, the #1 blog for teams engaged in
Agile, Lean and Flow in new product development.
– Profit Based New Product Development Decisions: Part 1
– Introduction to Cost of Delay
More
–
–
–
–
–
Graphical Economic Models of Various Project Types
New to the Company Product
Product Enhancement
Replacement/Next Generation Product
Sustaining Cost Reduction
Regulatory or Component End of Life (EOL)
PLAYBOOKHQ.co
@PLAYBOOKHQ