MIS Supply ChainStudent Name, Stud.docx

MIS Supply Chain
Student Name, Student Name, Student Name, and Student Name
MGT 311
Dr. Bhargavi Bandi
25 April 2016
21 April 2016
Table of Contents
Executive Summary 2
Company Profile 2
Company Problems 3
Project Scope 4
Enterprise Applications 5
Option 1: TradeGecko 6
Services 6
Implementation Timeline 9
Budget 9
Risks 10
Pros 11

Cons11
Option 2: ShipStation 12
Services 12
Features 12
Implementation Timeline 13
Budget 13
Risks 14
Pros 14
Cons15
Final Verdict 16
Works Cited 17
Executive SummaryCompany Profile
Sevenly was founded in 2011 by Dale Partridge and Aaron
Chavez. The company operates as an online retailer based out of
Fullerton, California and is known as one of the world’s leading
“social good” companies. This label is indicative of its weekly
cause activation platform, in which a charity of the week is
selected and has a spotlight for seven days. During those seven
days, Sevenly donates $7 for each product sold to that charity.
At the end of the week, the charity will receive a check. Each
year, Sevenly selects 52 charities and designs custom t-shirts,
mugs, and other accessories and apparel for each charity. Each
charity receives one week in the spotlight, but its products will
continue to be sold for the rest of the year. If a purchase is
made in the name of a charity that is not currently in the
spotlight, Sevenly donates 7% of the sales from that product to
that charity. Due to this unique business model, Sevenly is
widely recognized as “an organic funding movement to raise
capital and awareness for the world’s greatest
causes.”[footnoteRef:1] [1: Sevenly. (2016). About Us.
Retrieved April 20, 2016, from
https://www.sevenly.org/pages/about-us]
Company Problems

While Sevenly is a wonderful company devoted to great causes
and putting people first, its customers are not too happy at the
moment. The company has been facing a massive supply chain
issue that stems from its outdated model for an eCommerce
business. The effects of this outdated model include problems
with order fulfillment—namely, a huge backlog of orders—
shipping delays, and poor communication with suppliers and
customers. The problems and complaints got so bad that
Sevenly’s Marketing and Creative Director hosted an AMA on
the company blog.[footnoteRef:2] In the past year, the Better
Business Bureau has recorded 233 complaints that have been
lodged against the company. For a company as small as
Sevenly, that is a huge number of dissatisfied customers. A
breakdown of the complaints can be seen in the chart below. Of
those 233 complaints, 158 of them are due to delivery issues—
an overwhelming majority. Looking into the complaints more
closely, however, our team discovered that the majority of the
complaints stemmed from late delivery. Customers were mad—
and rightfully so—that it took 3 months to ship them their
products![footnoteRef:3] [2: Laubhan, L. (2016, March 18).
Sevenly AMA [Web log post]. Retrieved April 20, 2016, from
http://blog.sevenly.org/sevenly-ama] [3: Better Business
Bureau. (2016). BBB Business Review for Sevenly Inc.
http://www.bbb.org/sdoc/business-reviews/online-
retailer/sevenly-inc-in-fullerton-ca-1011025]
Project Scope
Clearly, something must be done to rectify Sevenly’s supply
chain problems. As of now, Sevenly does not have a viable
supply chain management model. In fact, the company is
currently trying to revamp its supply chain model. Our goal is
to successfully transform Sevenly’s supply chain model into an
efficient, cost-effective, and customer-approved set of business
processes. We have identified two types of MIS software,
examined the advantages and disadvantages of each, and chosen
one solution as our final verdict for the company. Enterprise

Applications
The use of enterprise applications will help Sevenly fix many of
its problems. There are a great variety of applications that can
be used. An enterprise application is defined as:
“A large software system platform designed to operate in
a…business or government…Enterprise Application software
consists of a group of programs with shared business
applications and organizational modeling utilities designed for
unparalleled functionalities.”[footnoteRef:4] [4: Techopedia.
What is an Enterprise Application? (n.d.). Retrieved April 20,
2016, from
https://www.techopedia.com/definition/24804/enterprise-
application-ea]
This kind of software is important in any information system
that is computer-based. This is important because Sevenly was
founded online and does not have a “brick and mortar” store.
Similar applications improve productivity and can be very cost
effective. Many small businesses do not have the funds to hire
someone to be in charge of their inventory or just create reports.
These apps let anyone in the business take charge of day-to-day
functions. Because these apps are so easy to use, it allows any
level employee to use them. This means that the company can
save money because they don’t need to spend extra time training
employees on specialized applications. The company will stop
losing business due to processing errors because the
applications are so streamlined and will help correct errors.
Many enterprise applications are customizable to each business.
This allows for each company to use what they need. Enterprise
applications are useful for all businesses—exactly why they will
help us improve Sevenly.
Option 1: TradeGeckoServices
TradeGecko is a cloud-based inventory management platform
geared towards retailers wanting effortless e-commerce
capabilities. Its software as a service (SaaS) fuses inventory
management operations, critical business applications, and

online commerce to build the central core of business
operations. In the past, small and medium businesses have had
the choice between using ledger books or spreadsheets to
manage their inventory. Managing hundreds or thousands of
products this way is inefficient and of course prone to human
error. This complexity can be multiplied hundredfold when
dealing with multiple warehouses, multiple selling channels,
and if more than one person is involved. Rather than using
ledgers or spreadsheets, companies such as Sevenly can improve
their business processes by using software to manage their
inventory and track shipping and order fulfillment.
This software company’s intuitive cloud-based software
combines the most powerful inventory management suite with
integrations that are essential to business—thus freeing
management and employees to focus on what makes their
business special. TradeGecko supports businesses that operate
with multi-users, multi-currencies and tax requirements, and
multi-warehouses, as well as CRM tools and integrations that
are essential to business such as QuickBooks, Xero, Shopify,
Bigcommerce and more. However, Sevenly is in need of several
specific solutions: inventory management, order management
and fulfillment, and multichannel sales.
The first major service that TradeGecko provides is inventory
management. The software would allow Sevenly to improve
inventory control through automatically updated stock levels
whenever sales and purchases are made. This is done using
inventory control features such as inventory lists, product
details, product history, variants, barcode scanning, and
incoming stock reports. Inventory lists will enable the user to
view all of the company’s products as a complete list or as
organized by custom filters. Every product on the list displays
its stock on hand, committed stock, cost, moving average cost,
reorder point, and stock history. The product details screen
allows each product to be edited to include information—image,
variants, SKU code, barcode, supplier code, color, size, weight,
buy price, wholesale price, retail price, sellable option, taxable

option, description, and notes. The product history screen
reports each product’s stock history, making it easy to see a
comprehensive restock log. Additionally, barcode scanning can
be used to search products by barcode, immediately entering
item information into sales and purchase orders. TradeGecko
works with all standard barcode scanners, making it simple and
cost-effective to implement.[footnoteRef:5] [5: TradeGecko.
(2016). Inventory Control. Retrieved April 20, 2016, from
https://www.tradegecko.com/product-tour/inventory-control-
system]
TradeGecko also has order management software that makes it
extremely easy to track and manage orders. For a company that
is having issues with shipping and fulfillment—like Sevenly—
this software would be a welcome relief. From order creation to
fulfillment, TradeGecko’s software allows the company to track
every step of the process. Use of this software enables
companies to access all of their sales channels at once, access
sales reports in real time, and create sales orders quickly, even
outside of the office! The ease and efficiency which this
software provides will go a long way towards successfully
revamping Sevenly’s supply chain process.[footnoteRef:6] [6:
TradeGecko. (2016). Order Management Software. Retrieved
April 20, 2016, from https://www.tradegecko.com/product-
tour/order-management-software]
In addition to order management, TradeGecko provides order
fulfillment software that “allows you to delight your
customers.”[footnoteRef:7] This software enables companies to
fulfill orders faster, in greater volume, and at lower costs. This
trifecta of order fulfillment is an absolute must for Sevenly,
given its massive amount of complaints about order fulfillment.
The features that this software package includes are
professional shipping documents, partial fulfillment, and
automated shipments.[footnoteRef:8] [7: TradeGecko. (2016).
Order Fulfillment Software. Retrieved April 20, 2016, from

https://www.tradegecko.com/product-tour/order-fulfillment-
software] [8: TradeGecko. (2016). Order Fulfillment Software.
https://www.tradegecko.com/product-tour/order-fulfillment-
software]
Another benefit to using TradeGecko is the possibility of
multichannel sales. TradeGecko will allow Sevenly to sell on
the following sales channels: Shopify, WooCommerce, Amazon,
and mobile sale apps. As a result, Sevenly would only need to
update its products on TradeGecko for the information to get
pushed automatically to all e-Commerce channels. Thus,
Sevenly online shops will always reflect the latest product
details, available products, and the exact stock on hand for each
item—all without the company having to update each and every
channel at a time.[footnoteRef:9] [9: TradeGecko. (2016).
Multichannel Sales. Retrieved April 20, 2016, from
https://www.tradegecko.com/product-tour/multichannel-sales]
Implementation Timeline
There are five phases to a software implementation project, and
these phases can and probably will overlap. Based on a 10- to
12-week implementation, our team has come up with an
approximate percentage of time a company spends on each.
· Project Preparation – 10%
· Business Blueprint – 9%
· Project Realization – 10%
· Final Preparation – 11%
· Go-Live and Support – 60%Budget
TradeGecko offers four different types of price packages. The
first package is the Basic Package, which is the cheapest with a
starting rate of $79 per month. The package includes ecommerce
integrations, accounting integrations, unlimited orders,
currencies, support offering through email, and one warehouse
tracker. The second plan is the Business Package, which has a
price tag of $199 per month. At this price, businesses would

receive everything in the Basic package as well as multiple
warehouse tracker and B2B ordering. The third package is the
Business Premium, priced at $359 per month. This package
includes all the features of the aforementioned packages in
addition to iPhone/iPod Sales App, Account Manager, API
access, advanced warehousing, sales force integration, and
order history. Finally, the Enterprise Package, priced at $799 a
month, includes everything in the Business Premium package as
well as multiple brands and 24/7 support offering. The Business
package is the most popular of these four packages. TradeGecko
also offers a unique 14 day trial for those who want to test the
company and its product offerings out.[footnoteRef:10] [10:
TradeGecko. (2016). Pricing. Retrieved April 20, 2016, from
https://www.tradegecko.com/pricing]
Risks
· Support
· Advice and guidance for the customer on the
products/applications in operation. It can include a helpdesk,
website, bug fixes and patches. Depending on the criticality of
the application to the business support can be provided to meet
the business requirements.
· Maintenance
· Provides the customer with an upgrade path to the next version
of software as it is made available by the software
ownerPros[footnoteRef:11] [11: Hansen, R. (2016).
TradeGecko Small Business Review 2016. Retrieved April 20,
2016, from http://inventory-software-
review.toptenreviews.com/tradegecko-review.html]
· Full inventory control including real-time stock level update,
various sales channels, and product history visibility
· Multi-warehouse feature that allows syncing of multiple
inventories in different warehouses
· Multi-channel sales feature that places all sales data in one
location for easy access and monitoring
· Analytics that generate sales reports, among others, to identify

best products, best performing sales channels, and top-grossing
sales teams
· System integrations to allow for complete order fulfillment—
purchased orders, shipping, and reorders
· More robust features besides inventory management—CRM,
sales reports, and accounting
· Easy to use and very accessible Cons[footnoteRef:12] [12:
Hansen, R. (2016). TradeGecko Small Business Review 2016.
Retrieved April 20, 2016, from http://inventory-software-
review.toptenreviews.com/tradegecko-review.html]
· TradeGecko doesn’t offer an option for on premise
deployment, which can be a problem for some companies
· TradeGecko offers only 14 days free trial instead of 30 days
like other similar tools
· The customer support of this inventory and sales management
solution does not offer phone support for Starter plan users
· Very slow support team response to problems that arise
Option 2: ShipStationServices
ShipStation is a shipping software company that is designed to
help online retailers and other eCommerce businesses
consolidate their ability to process, fulfill, and ship orders from
all the major eCommerce marketplaces and shopping cart
platforms. It offers seamless integration that allows
synchronizing with payment gateways, mail carriers, and
more.[footnoteRef:13] Sevenly’s USPS postage account would
be built into the ShipStation account at no cost with access to
premium features. These premium features include all USPS
mail classes, access to first class mail rates, flat rate and
regional rate pricing, USPS scan form support, and hidden
postage costs.[footnoteRef:14] This software is Cloud-based
and automatically imports orders and order updates, exports
shipment and tracking information, and chooses the best
shipping option based on the criteria that the business
specifies.[footnoteRef:15] [13: ShipStation Review 2016.
(2016). Retrieved April 20, 2016, from

http://www.merchantmaverick.com/reviews/shipstation-review/]
[14: ECommerce Fulfillment & Shipping Services. (2016).
http://www.shipstation.com/features/] [15: ECommerce
Fulfillment & Shipping Services. (2016). Retrieved April 20,
2016, from http://www.shipstation.com/features/]
Features[footnoteRef:16] [16: ECommerce Fulfillment &
Shipping Services. (2016). Retrieved April 20, 2016, from
http://www.shipstation.com/features/]
· Integrations for all mail carrier accounts
· Integrations for all major online shopping carts
· API access
· Automatic order retrieval
· Customized confirmations and tracking information
· Batch-printing
· Shipping rates calculated in real time
· Returns processing with single click
Implementation Timeline
Because the software is on the Cloud, there is no need to
download software. Thus, the installation time is less than a few
minutes. The implementation time is approximately 2 to 5 days.
After the implementation stage, businesses can expect to launch
their new services in one day.[footnoteRef:17] [17:
ECommerce Fulfillment & Shipping Services. (2016). Retrieved
April 20, 2016, from http://www.shipstation.com/features/]
Budget
The most popular option is the Gold membership, which is $65
per month. This is considerably lower than what Sevenly is
paying already, due to the fact that this software is Cloud-based
so it is instantly cheaper. However, this only covers 3,000
shipments per month. On the other hand, it is very simple and
easy to upgrade packages. The next package is the platinum
membership at $95 per month, which includes 6,000 shipments
per month. There is also an enterprise membership that allows
unlimited shipments per month.[footnoteRef:18] [18:

Risks
· Maintenance
· Application has been known to malfunction with large volume
orders
· Security
· Cloud is not secure yet, so additional precautions would need
to be takenPros[footnoteRef:19] [19: ECommerce Fulfillment
& Shipping Services. (2016). Retrieved April 20, 2016, from
http://www.shipstation.com/features/]
· No hardware or software required for installation
· Plenty of video tutorials to get company started
· Excellent customer service
· Create custom views
· Automation
· Virtually no work is needed to ship a product
· Website employs HTTPS encryption
· Makes shipping quicker and easier Cons[footnoteRef:20] [20:
· Cloud is not that secure yet
· The app could malfunction—resulting in a huge shipping delay
· Only deals with the shipping aspect of the business, nothing
else
· Does not handle high order volume very well
· However, it does now have an option for an add on for orders
bigger than 10,000
· Hard to figure out at first
· Complicated to set up the automation
Final Verdict
TradeGecko is the clear winner for Sevenly’s needs. Sevenly’s
main problem was with its outdated eCommerce business model.

It was negatively affecting order fulfillment and caused
shipping delays and poor communication with suppliers and
customers. ShipStation helps with the customer database and
order management. TradeGecko does that and more! The main
reason that this solution is so great for Sevenly is because it
also has the capability to work with barcoding and RFID tags
which provides so many more opportunities for Sevenly to
grow.
ShipStation:
TradeGecko:
Works Cited
Better Business Bureau. (2016). BBB Business Review for
Sevenly Inc. Retrieved April 20, 2016, from
http://www.bbb.org/sdoc/business-reviews/online-
retailer/sevenly-inc-in-fullerton-ca-1011025
Cloud Services. (n.d.). Retrieved April 19, 2016, from
https://www.logility.com/solutions/cloud-services
April 20, 2016, from http://www.shipstation.com/features/
Hansen, R. (2016). TradeGecko Small Business Review 2016.
Retrieved April 20, 2016, from http://inventory-software-
review.toptenreviews.com/tradegecko-review.html
Laubhan, L. (2016, March 18). Sevenly AMA [Web log post].
Retrieved April 20, 2016, from http://blog.sevenly.org/sevenly-
ama
Sevenly. (2016). About Us. Retrieved April 20, 2016, from
https://www.sevenly.org/pages/about-us
ShipStation Review 2016. (2016). Retrieved April 20, 2016,
from http://www.merchantmaverick.com/reviews/shipstation-
review/
Techopedia. What is an Enterprise Application? (n.d.).
https://www.techopedia.com/definition/24804/enterprise-
application-ea

TradeGecko. (2016). Inventory Control. Retrieved April 20,
2016, from https://www.tradegecko.com/product-tour/inventory-
control-system
TradeGecko. (2016). Multichannel Sales. Retrieved April 20,
2016, from https://www.tradegecko.com/product-
tour/multichannel-sales
TradeGecko. (2016). Order Fulfillment Software. Retrieved
tour/order-fulfillment-software
TradeGecko. (2016). Order Management Software. Retrieved
tour/order-management-software
TradeGecko. (2016). Pricing. Retrieved April 20, 2016, from
https://www.tradegecko.com/pricing
Page 1 of 18
2
Table of Contents
Executive
Summary.................................................................................
3
Team
Profile....................................................................................
........4
Business Plan
Operations
Summary......................................................................... 6
Technology
Requirements.............................................................. 6-7

Marketing
Strategy......................................................................... 7 -9
Budgets...................................................................................
.....10-11
Risks......................................................................................
............12
Summary.................................................................................
...............13
References..............................................................................
................14
Executive Summary
Muffin Tops bakery seeks to earn a competitive advantage over
other local bakeries and food stores by using our unique
products and cost saving techniques to operate on an efficient
frontier that will aid us in providing return to our investors and
reinvest into expanding our business. Commercial space in the
downtown area of Evansville has opened and we believe that
there is an opportunity for a specialty muffin shop to step in and
take over a large market share in the greater Evansville area.
We believe that this opportunity combined with our patented
Tops Only! baking technique will allow us to recover our initial
capital investment and return a profit within the first 5 years of
operation.
Muffin Tops Bakery seeks to keep costs low and margins as
high as possible for our specialty muffins especially within the
first 5 years. We plan to initiate our market penetration plan by
June 1st, 2016 and have our Main St. Evansville location open
by July 1st, 2016 to capture the potential rise in demand from
the Independence Day crowd. When our outstanding product
hits the market, we expect demand to hit approx. 1000 muffins
per day which will allow us to cover our fixed costs rather
quickly. In order to operate, our store only needs 1 baker and 1
cashier per shift, operating from 6am to 7pm daily keeping our

wages cost quite low. No specialty equipment is required to
create our patented Tops Only! muffins, allowing us to build
our competitive advantage. All of these elements in combination
means that we will have the capital required to pay back any
well-rated loan from any institution.
We understand the risks associated with our specialty business
and are prepared to face them head on. Our biggest risk is that
another product will come into the market that mimics our Tops
Only! technique thereby removing our competitive advantage.
Another risk that we face as a business that prepares food is the
possibility of food poisoning deriving from our products. Our
expert chefs are loyal and well-trained, which should reduce
these risks extensively. These are two primary risks that we felt
needed addressed in this section; Other risks that we have
discovered can be found in the “Risks” section.
Muffin Tops Bakery is an exciting new business venture that is
sure to draw the attention of the entire greater Evansville area.
After the five-year schedule that we have planned, we expect
that there will be room to grow into other markets all across the
tristate and continue to operate at a profit. Our Tops Only!
muffins are sure to be the talk of the town, and we couldn’t be
happier to provide them to our customers!Team Profile
Ben Phillips - Finance ‘16 - Ben has had extensive experience
in finance, accounting, and managerial practices during his time
at the University of Evansville (2012 -2016). While holding
positions at Vectren and SS&C in Evansville, IN, Ben earned
the respect of his coworkers and superiors with a hearty work
ethic and dedication to the job. Ben currently works as an
assistant to Financial Advisor Nate Monroe through Old
National Investments and works extensively in managing
clients, investment research, and client prospecting. He hopes to
bring his experience, entrepreneurial mindset, and love of
cooking to the Muffin Tops Bakery project. He will be
responsible for organizing the company’s CRM and maintaining

relations with suppliers and investors/loan officers.
Gabriel James- Finance/Economics ‘18 - Gabe currently is in
pursue to acquire a bachelor's degree in both Economics and
Finance by the year 2018. Through his first 2 years of college
he has worked at a Managerial internship for TJ Maxx and also
in their HR department, this summer he is also going to be an
intern for One Main Financial as a financial advisor's assistant
all while swimming for the University of Evansville. With his
great understanding in the HR occupation and having a great
skillset in time management skills, Gabe is responsible for the
workers of Muffin Tops Bakery and their salaries. He also is
responsible for finding the technology to innovate the company.
Justine Suanes - Accounting/Finance ‘18 - Justine graduated
Summa Cum Laude from Vincennes University with an
Associate’s Degree in Business Administration (2013-2015). In
the summer before and during her last semester at Vincennes
University, she interned in the office at King’s Great Buys Plus
in Lawrenceville, IL where she applied and strengthened her
skills in accounting. Justine is currently pursuing her
Bachelor’s Degree in Accounting and Finance at University of
Evansville by 2018. She is also participating in the CFA
Investment Research challenge in 2017, where she is further
developing her analysis skills. During her time in school, she
worked at the YMCA in Vincennes from 2011 to 2015, and just
started working at the YMCA in Evansville this year, 2016.
Justine hopes to utilize both accounting and analysis skills in
the Muffin Tops Bakery Project. She will be the accountant in
this project.
Courtney Nelson - Multimedia Production ‘16 - Courtney is
graduating the University of Evansville in the Communication
Department with a focus in Video Production and a minor in
Computer Science. For the last 2 years she has done freelance
work building websites for a couple start-up companies and

producing videos for bigger organizations such as Vectren,
Evansville-Vanderburgh County Schools, Vanderburgh Humane
Society, and WNIN. She has created several different marketing
campaigns for nonprofit organizations and is a keynote speaker
for Hope Harbor’s yearly fundraising events. She interns at
WFIE on set in the production crew and works part time for
WNIN as a videographer for location shoots. Courtney is in
charge of the Marketing department for Muffin Tops Bakery.
Blake Adams - Culinary Arts ‘18 - Blake is in the process of
graduating from the University of Evansville with a culinary
arts degree. Through his first two years of school he worked as
an intern for Rolling Hills Country Club as a chef. Here, he
learned hands how the culinary world operates. Blake has
worked at Rolling Hills Country Club two years and has slowly
and the head chefs respect. He is a hard worker and will take on
whatever responsibilities are thrown at him. Over his two years,
he has gained much more responsibility than a beginning chef
through determination and teamwork. Blake hopes to bring his
previous experiences and his hard-working mindset to Muffin
Tops Bakery.Business PlanOperations Summary:
Muffin Tops Bakery will operate as a simple specialty muffin
shop in the downtown Evansville area. We will build our
business on the foundation of our industry and local knowledge,
and the expertise of our staff. We plan to have two cashiers and
two bakers on staff that will allow for streamline production
and sales. Our world class bakers have also perfected the Tops
Only! baking technique and carry a specialized set of talents.
Muffin Tops Bakery also seeks to keep overall equipment costs
low by starting off with top of the line cooking equipment and
on-site technology. Our mixing and baking equipment is top of
the line from a great supplier, and we believe our depreciation
schedule will span the next 15 years before it is cost effective to
replace. The TPS and computer system we have purchased will
also last us quite a long time.
In combination, all elements of Muffin Tops Bakery will

provide any lending institution a full return on investment. With
a small start-up loan, we expect to be making a profit within
two years, allowing us space in the budget to stay on time with
loan payments.Technology Requirements:
Technology is a very important thing to consider when
developing a company and expecting it to thrive. Technology is
needed to not only keep up with your competitors but also make
it a lot easier for your employees to acquire data and analyze
the data to make decisions regarding our company going
forward For starting up our company there are 4 mandatory
things we need to help run our business.
Credit Card Machine/Cash Register (TPS)- We purchased a
uAccept POS which is a cash register/ credit card machine that
is a cloud-based system that does the following:
· 9.7" touch screen plus a customer display screen makes
operation easy
· Plug-and-play cloud-based software gets you up and running
quickly
· Touch screen allows custom screen views with the option to
change as sales fluctuate throughout the day
· Connect to the POS from any Internet-connected device to
keep you in touch with real-time business data
· Generates sales reports and helps manage loyalty programs
with the option to easily add products and categories or manage
multiple devices from a single account for streamlined
management
· Monthly software subscription includes free upgrades and web
portal access for affordable, up-to-date software
· Comes with a cash drawer, card reader and receipt printer to
make it a complete POS
· Payment options include cash, credit, debit, checks and
Bitcoin for flexibility
· Allows customers to submit inquiries or orders via text
message for expanded sales options
· Optional USB barcode scanner allows for faster sales

transactions
This machine not only helps us analyze and gather data on our
sales but it is also more user friendly, its touch screen, gives
visuals on the sales we made throughout the day, and is also
cloud based which makes it easier recording the data on our
business computer and analyzing from there.
Business Computer- We purchased a “Dell - Inspiron 23.8"
Touch-Screen All-In-One - AMD A8-Series” This computer can
do it all, it has tons of space and memory to store data and other
information on it and is also compatible with our TPS, Its touch
screen and user-friendly. The computer has Windows 10
software, accelerated processor, 8GB system memory, and a
1TB hard drive which is enough to start off our business and
expand.
Security System- We purchased a Security system with ADT
who is most well-known for providing security for many
businesses and homes. We not only want our customers to feel
safe, but we also want our data and building to be protected if
anything should happen. Another good thing for having this
system with ADT is that it also comes with a Timestamp so if
anything were to occur we will have the exact time and date to
bring to the court of law.
Company phones- Communication with our employees and co -
workers are very important to our company in order to thrive.
That's why we have a business phone for the store and our
providers are AT&T. we chose AT&T because it had the better
bundle then the other competitors.Marketing Strategy:
The main objective for Muffin Tops marketing campaign is
to grow awareness in the Evansville area about this new
business. We want to let the community know who we are,
where we are, and what we do so that we can start bringing in
those sales. To start, we created a simple and elegant logo
through Adobe Illustrator. This logo will be seen on the

business’ sign, memo letterhead, and business cards. This
software allowed us to export the design in both CMYK and
RGB colors as well as different file formats such as PNG, JPG,
and TIFF so that it can be used in many different platforms and
mediums.
When deciding our target audience we realized that our location
greatly impacted this. Opening the business downtown on Main
St. means that we are not only surrounded by corporate and
local businesses but also schools and younger families who
walk around the area. Therefore we are targeting business men
and women to get a quick breakfast before work or a midday
snack. Students on their way to school or on lunch break or
looking for an afterschool snack. And young families who are
walking the strip, easily interested in a light, sweet, and
somewhat healthier snack. This targeted demographic would be
able to use our muffin tops for special events as well such as
birthdays, sport games, and/or office meetings.
Considering we live in the “digital age”, it was pertinent to our
startup plan that we create a strong online presence for the
bakery. This consists of both a website and social media pages.
For the website, we chose to use the host, GoDaddy, this was
based off of the reviews for the quality, convenience, and price.
In the initial startup costs we have allotted for a good portion of
the marketing budget to go to the website being professionally
built and to create a strong Search Engine Optimization for the
site. GoDaddy will also be in charge of website maintenance
and upkeep. Maintenance plus the domain fee adds up to only
$22 per month. The business will also be on Facebook, Twitter,
Instagram, and Google+. Here we hope to build a two way
communication with our customers, so not only will we be
posting about deals, muffin tops updates, events, and
promotional items but we will also be asking for feedback from
our followers. We will inquire about what their favorite muffin
top kind is, what they hope to see from us in the future, what

muffin top kinds would they like us to bake, and any other
requests, suggestions, and/or feedback they wish to contribute.
Much of our advertising will be in print or radio ads. In the
Evansville area it is only $18 to $30 for a 30 second
advertisement, so those will be running on Evansville’s top 3
stations. Much of our print advertisements will be located in the
local paper and magazines, with a more concentrated amount in
the Evansville Living magazine and the Crescent, the University
of Evansville’s magazine. Our other print advertisements will
be on flyers and business cards. You can print 1,000 flyers for
$230 and we will post them around town and on school
campuses, posting a greater amount within a 5 mile radius of
the bakery’s location. 1,000 business cards can be printed for
only $38 so we will print a large amount of those and place
them all around town. Many of the businesses in Evansville
have a little section devoted to business cards from other local
businesses in the area, so we will be taking advantage of that.
After some extensive research on the businesses in the area, it
was discovered that many are a part of the Southwest Indiana
Chamber of Commerce. Its popularity is due to the extensive
amount of events they host that bring the local businesses and
the community closer together. Muffin Tops Bakery would join
this with a classic membership for $435 a year. A grand opening
will be hosted as well to try and bring the community into the
store and get our name out there. Advertising for this will start
a little over a month prior to the opening. Shown below is an
overview of the Marketing plan’s calendar along with the
monetary value of each stage in the plan. The colored cells
show when each part of the marketing plan is active throughout
the first year.
Marketing Plan and Budget Calendar 2017

Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Social Media
$100
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
$650
Print Advertising
$300
$300
$300
$200
$200

$150
$150
$200
$300
$2,100
Radio Advertising
$360
$480
$480
$360
$240
$240
$240
$240
$360
$480
$3,480
Website
$521.97
$21.98
$21.98
$21.98
$21.98
$21.98
$21.98
$21.98
$21.98
$21.98
$21.98
$21.98
$763.75

Business Cards
$190
$190
Flyers
$230
$130
$130
$130
$130
$130
$880
Promotional Events
$300
$300
$300
$250
$250
$150

$200
$250
$2,000
Grand Opening
$800
$800
SWI Chamber of Commerce
$435
$435

Total:
$11,298.75
To evaluate the effectiveness of this marketing plan we will be
looking at sales by the end of the first year and see at what
points in the year was sales the highest then we will cross
examine that with our marketing calendar and see what
advertising mediums were being used most at those times as
well as documenting the times of the year, in relation to seasons
and holidays, where the sales were highest. Then with this
information we will create a new calendar that better

compliments these patterns in sales data. We will also look at
the data social media platforms provide to see which posts were
the most popular and which events or promotions brought us
more followers.
Budget:
Startup Budget
Property and Equipment
Computers
700
Oven
21000
Refrigerator
2050
Display case
8700
Food Mixers
1300
Business Phone
25
Total Property and Equipment
33775
Systems
TPS
850

Security
360
QuickBooks
350
Total Systems Cost
1560
Marketing
3237
Total Startup Costs
$38,572
Operating Budget
Rent
18000
Utilities
14400
Marketing
8062
Salary
Bakers
47200
Cashiers
53964

Total
101164
Supplies
26373
Phone Service
1140
Total Operating Costs
$169,139
*Figures calculated to annual costs
Total Start up and Operating Budget Costs
$207,711
Start Up Costs
Based on the market demand in Evansville and average costs of
bakeries and cafes, we came up with the startup costs shown
above. A total estimate of $33,775 goes towards our property
and equipment. This category includes a computer, oven,
refrigerator, two display cases, two food mixers, and business
phone. Each item helps accommodate the bakery and its needs.
The computer is used to process transactions to provide
financial statements and help facilitate the communication
between suppliers and customers. The oven, refrigerator, and
food mixers are needed to keep the supplies fresh and make the
muffins for the customers. The business phone will be used to
receive pick-up orders from customers and contact suppliers.
The systems category totals up to an estimate of $1,560.
The transaction processing system is needed to process all the
transactions within the bakery. These transactions may include
purchase orders for the supplies and inventory, marketing costs,

and customer orders. The security system will be used to
protect the asset and information the bakery will have and hold
in both the store and on the computer. QuickBooks will be used
for the accounting department to produce the financial
statements and tax forms needed for investors and other
government entities.
The last category will include all the initial marketing
costs to get the business started. A total estimate of $3,237 will
be needed. Under the marketing category, the items include
social media, print advertising, radio advertising, website,
business cards, flyers, promotional events, the grand opening of
the bakery, and SWI Chamber of Commerce.
Operating Costs
These figures are also based on the market demand in
Evansville and average costs of bakeries and cafes. We have
separated the operating costs from the initial startup costs.
Additionally, the operating budget costs are also made on an
annual basis. Each month, we pay a certain amount at the end
of each month. We aren’t buying a building, but instead renting
at an estimated price of $18,000 per year. Utilities are at a cost
of $14,400 and marketing is at a cost of $8,062. The team
decided that we would hire two bakers and two cashiers to
accommodate the demand of the market. The bakers’ salaries
are combined at a price of $47,200 and the cashiers are at a
combined price of $53,964. We estimated the price of supplies
at $26,373. Supplies include the utensils and ingredients
needed by the bakers to make the muffins. The average price of
internet service providers come out to $1140. Total operating
costs is at an estimated $169,139.
Summary Costs
Total start up and operating costs sum up to an estimated
$207,711. We wanted to separate the startup costs from the
operating costs to show which items are more likely to be a one-
time purchase, plus depreciation, versus the items that are

ongoing costs. As mentioned above, the costs are based on the
market demand and average costs of bakeries and cafes.Risks:
Although the idea of starting up a bakery sounds great, there are
many potential risks that come along with it. One of the big
risks of starting bakery is the limited growth opportunities.
There is already a vast community of bakeries around every
corner. Therefore, it will be hard for Muffin Tops to gain
customers when they are already loyal to other bakeries. Muffin
Tops will have to provide a product and service that separates
itself from the competition in order to thrive in the industry.
Another big risk that Muffin Tops faces are health concerns.
When operating a small bakery there are many health codes
that have to be followed. When baking specialty items light
gluten free, it is imperative that there is no cross-contamination.
If Muffin Tops is not careful they could potentially get gluten
in a gluten-free roll and cause someone physical harm. Also, if
someone gets sick from a product of Muffin Tops, they will
spread bad reviews and no one will go there anymore.Summary
In summation, we believe that Muffin Tops Bakery has the
formula to succeed in the Evansville area. Our killer recipes,
baking systems, employees, and potential customers will
provide Muffin Tops Bakery with everything required to thrive
in this market. The detailed planning and budgeting information
included in this document gave a detailed look at how
everything will come together. We have covered all of our
points and have proven our business strategy. All of the pieces
of the puzzle are in the right place. For everything to come to
fruition, all that is required is a start-up loan.
References
"Business Plan Risks." Entrepreneur. N.p., 10 Dec. 2004. Web.
<https://www.entrepreneur.com/article/49042>.

"QuickBooks Premier Desktop 2016:." QuickBooks Premier.
N.p., n.d. Web.
"Southwest Indiana Chamber | Evansville & Posey
County." Southwest Indiana Chamber. N.p., n.d. Web.
"10 Key Risk Factors to Minimize for Startup Success." Startup
Professional Musings. N.p., 28 Apr. 2013. Web.
<http://blog.startupprofessionals.com/2013/04/10-key-risk-
factors-to-minimize-for.html>.
"UAccept POS 9.7'' Touch Screen." Fryselectronics. N.p., n.d.
Web.
"The Ultimate Startup Marketing Strategy by Venture
Harbour." Venture Harbour. N.p., n.d. Web.
1
Final Project Plan
MGT 311
Dr. Bhargavi Bandi
Student 1, Student 2, Student 3, Student 4

April 27, 2015
Table of Contents
Executive Summary 3
Project Purpose 4
Project Objective 4
Property 4
Insurance 5
Vehicles 5
Tracking Software 5
Technology 6
Computers 6
Computer System: Oracle 7
Potential Risks 8
Project Budget & Financials 9
Conclusion 10
References 12
EXECUTIVE SUMMARY
With environmental awareness becoming more and more
prominent in our society, Evergreen Recycling Management will
look to provide the residents of Warrick County, IN, with an
alternative to city-provided waste services through a cheaper
and more simplified approach to the recycling process.
Currently there are four companies vying for individual

curbside trash pickup in Warrick county, Eric Griese, Advance,
Waste Management, and Republic. Only one of these companies
offers the option to recycle.
These companies charge a varied price for service to Warrick
County’s 22,000 residential units, each currently paying an
average of $35.00 per month for their waste and recycling
services. We believe they deserve a better, cheaper option that
will meet their waste-elimination needs. With a commercial lot
now available in centrally located Boonville, IN, introducing
Warrick County to a new system of recycling can now be
managed in an efficient and effective way.
With a zoned one acre lot, service building, and utilities readily
available at 424 West Main Street in Boonville, Evergreen
Recycling Management would not need to dedicate an
unnecessary amount of time in clearing land or building
necessary structures. The lot would include a service building
equipped with WIFI and other technological capabilities
(computer systems, telephones, etc.) as well as plenty of space
for the rented trucks and equipment to be stored when not in
use.
PROJECT PURPOSE
Our project’s main goal is to provide a realistic and affordable
alternative for Warrick County residents to be able to dispose
properly of their recyclable items. We would like to operate
from our central location in downtown Boonville, IN, in hopes
of effectively serving the county’s 22,000 households by
making regular routes five days a week.
PROJECT OBJECTIVE
The recycling industry can be very profitable if implemented
correctly, and we believe that the fees and revenue collected
from each customer will help us to begin making a profit after
the first year. With our initial investment of $259, 081.17, we
expect our one-time costs such as vehicle tracking equipment

and computer software such as Oracle to help offset our
monthly costs including vehicle rent, utility, security, and
maintenance costs. We hope that ending our first year with a
marginal profit will allow us to grow to be a strong contender in
Warrick’s recycling system.
PROPERTY
Our property, located at 424 West Main Street in
Boonville, IN, is the prime location for Evergreen Recycling
Management to begin its business. With a fully-constructed
office building ready for use on this $136,000 lot (Zillow), this
location would enable our company to operate out of a
centralized location on a daily basis. The open space on the lot
allows for plenty of room to park our three recycling trucks
with room to spare. This lot also provides Evergreen with an
ideal central location to serve Warrick’s nearly 700 miles of
maintained roads.
INSURANCE
We are prepared to enter into a contract with State Farm’s local
branch and have chosen to have Vicki Brasel serve as our
insurance agent. State Farm would provide us not only with
protection and limited liability for our vehicles but also for any
cases involving personal injury and safety. Our insurances costs
are expected to be $2,084 monthly with our annual insurance
fees being $25,000 to finish out our first year of operation.
VEHICLES
Evergreen Recycling Management intends to rent three
recycling trucks from RDK Truck Sales at a rate of $6,500 per
month per truck. We currently plan to run these three vehicles
on specified routes five days a week, and each vehicle’s safety
guards and coverage will be purchased and installed through
American Medical Response (AMR) with the necessary
equipment and software being purchased at $1,500 each.
Services and maintenance for each truck will also be provided
by RDK for another $1,500 each month to ensure that each
vehicle is up to code and meets all necessary safety standards.

Tracking software
Our vehicle tracking software will be licensed through
Rhino Fleet Tracking. Our initial order cost for this technology,
which would enable our business to track the speeds of the
vehicles at any given time and monitor fuel levels and
mechanical functions, would be about $494.25 with our monthly
payments coming to be about $84.75.
TECHNOLOGY
Computers
The computer power that we will need for this company will be
fairly simple. For the four of us we will have a desktop
computer from Dell and will cost $479 each. These computers
do not need to be the fastest on the market since we will only be
using them for email, tracking software for our trucks, and
maybe some YouTube videos. These computers will have the
Dell i5 processors which are about middle grade. We do not
need advanced graphics cards or water cooled CPU fans. These
are simple and perfect for what we will use them for. For our
monitors we will need the Dell 22 Dual Monitor which will cost
$469.99 each. These screens will be perfect for our business
because we can have the truck tracking software on one screen
at all times and still have a free screen to do other business on.
They are full 1080p which is good enough for what we will use
them for. We do not need a screen that has 4K resolution
because our desktops would not be able to handle that
resolution anyway. We will need a server for our tracking
software and for a potential website. The Dell PowerEdge T330
Tower Server will be perfect. We will only need one which will
cost us $699. This entry level server is ideal for our business
because we will only be using it for lower power usage
programs. The T330 has an Intel Celeron G3900 processor with
4GB of memory and a 500GB hard drive. This server also has a
1 year warranty if anything goes wrong with it.
Of course with these computers and servers, we will need
an internet connection. We will need the extreme internet

package from Time Warner Cable which will cost us $54.99 a
month. This internet package goes up to 50 megabytes per
second which is perfect for our vehicle tracking software to run
on and get the fastest updates. This will also enable us to get
back to customers emails faster. Another reason we will need 50
megabytes per second is between the four of us in the office we
have to split the speed. So if all of us are in the office we will
only be able to get 12.5 megabytes per second. This is still a
good speed to run our vehicle tracking software and be able to
get to our emails. We will also need wifi for our personal
computers to be able to get to our emails and vehicle tracking
software from anywhere in the office. We will need the Netgear
Rangemax WiFi Modem which will cost us $79.99. This modem
will enable us to have internet connection from anywhere in the
building. For our desktop computers we will need an ethernet
cable box. This gives us the best internet connection possible
for our desktops. The Black Box 6-Port Ethernet Box will cost
us $209.99 but will also enable us to add two more computers
for expansion. The Black Box is the best on the market because
it gives us surge protection from the internet cable line so a
lightning strike doesn't fry our computers if it hits the internet
line. They are also the most durable and long lasting ethernet
boxes on the market.
Computer Systems: Oracle
In order to best track daily operations, we would like to install
and utilize certain applications provided by Oracle’s E-business
Suite, particularly Oracle’s Human Capital Management
services. Through the E-Suite, Evergreen’s management would
be able to monitor and manage nearly every possible aspect of
the business, including but not limited to managing payroll
accounts and time cards, refining its Customer Relations
Management by collecting consumer data and ensuring that all
customers served are having their needs satisfactorily met, and
much more.
For $9.50 per month per user, Oracle’s E-business Suite
would also enable Evergreen to manage its financials and

reporting systems as well as inventory. Being able to handle all
of this data in one place will help Evergreen to be organized
and prompt when documenting training sessions for employees,
reporting site standards to the Occupational Safety and Health
Administration, tracking all financial processes such as taxes,
and completing other tasks.
We would like to pair the E-business Suite’s capabilities
with Oracle’s WebLogic Suite. For $900 per license, WebLogic
would enable Evergreen’s management to merge its database
from E-business to a more sophisticated format should the
business decide to grow into surrounding areas such as
Vanderburgh, Posey, Dubois, or Daviess counties in Indiana.
WebLogic’s capabilities would allow Evergreen to build a more
specialized infrastructure to hold larger quantities of data and to
expand its ability to process this information in a more efficient
and useful way.
POTENTIAL RISKS
The greatest risk in starting any business is arguably the
competition. Since we will be a new company, without any prior
exposure to the market, our competitors will have an edge,
especially if they are well established. We hope to overcome
this risk by segmenting the market and targeting customers who
we think will desire our services most. By offering better
services than our competitors at competitive pricing, we think
that we can overcome the risk of going bankrupt early in our
career.
Another potential risk is our team setup. Since the four of
us have an equal share in the company, it requires us to be in
agreement on most issues. It will be important for us as a team
to listen to one another and consider all of the suggested
options. This will ensure that our plans are well thought out and
that everyone feels as though they are bringing value to the
table.
Arguably the greatest risk is financial mismanagement.
With all startup businesses, financial stability is always a risk.
Once we begin to bring in revenue, it is extremely imperative to

manage our money as we have planned according to the budget.
This will ensure that we maintain financial security.
BUDGET BREAKDOWN & FINANCIALS
Loan Request
Projected Profits
One Time Cost
Month
Year
Land and Improvements
$150,000.00
$150,000.00
Sales
$77,000.00
$924,000.00
Loan Closing
$1,753.60
$1,753.60
dump profit
$111,718.75
$1,340,625.00
Computing Equipment
$3,667.94
$3,667.94
Oracle

$900.00
$900.00
Salary
$26,666.00
$319,992.00
Vehicle Safety and Tracking Equipment
$1,482.75
$1,482.75
Bills
$8,439.74
$101,276.88
Month
Year
Loan Payment
$30,000.00
$360,000.00
1 year rent on vehicle
$6,500.00
$78,000.00
1 year maintenance cost
$1,500.00
$18,000.00
1 year utilities
$300.00

$3,600.00
1 year Internet
$54.99
$659.88
1 year safety monitoring
$84.75
$1,017.00
Total
Total
$259,081.17
$123,613.01
$1,483,356.12
CONCLUSION

With our local community becoming much more interested in
making recycling a priority, we at Evergreen Recycling
Management believe that our company would provide Warrick
County customers with a viable and affordable option for their
recycling needs. By keeping our employee base low with only
four employees, each of which will be fully trained and licensed
to drive our commercial vehicles, Evergreen will be able to
focus on ensuring that our daily services will help our
community to be more environmentally friendly but also help
our company build a profit through the high collection of low
rates of $14 per household and the revenue earned from
recycling the items themselves. We respectfully request this
loan as an investment to not only help our business flourish but
as an investment to help our area take steps to protect our
environment.
REFERENCES
Truck rental
RDK Truck Sales, Sales Manager, Phone, April 2016
Maintenance and service
Advance waste disposal, Area Site manager, Phone quote, April
2016
Insurance

State Farm, Vicki Brasel, Phone quote, April 2016
Property
ERA, Dave Talley, Realtor, Phone consult, April 2016
Title processing and Insurance
Bosse Title company, Christina Lefflers, Closing Agent, Quote,
22 April 2016
http://www.oracle.com/us/products/applications/ebusiness/overv
iew/index.html
http://www.oracle.com/us/products/applications/057307.pdf
http://searchfinancialapplications.techtarget.com/feature/Produc
t-of-the-month-Oracle-HCM-Cloud-8
https://shop.oracle.com/pls/ostore/product?p1=OracleWebLogic
Suite&p2=&p3=&p4=&p5=&intcmp=ocom_oracleweblogicsuite
Hands-on project: Decision Support
This project deals with business forecasting and decision
support systems. You are encouraged to create a
spreadsheet to answer the questions below. You do not need to
submit the spreadsheet.
It is December 2016. You are planning to start a small airline in
bush Alaska. The grand opening is January 2017.
You have $250,000 startup capital. You have fixed payments to
make for your airplanes, staff and office space, at

$80,000 per month. Your variable costs are $120 per passenger
and you charge an average of $180 per passenger.
You expect to have 800 passengers in January 2017 and you
expect a uniform rate of increase in this number, some
X % month to month. Set up a spreadsheet so that you can
calculate your cash balance at the start and end of each
month, given the number of passengers for that month. Link
your cells to allow you to specify the month to month
growth rate X% in a single cell.
1. In any given month, how many passengers do you need to be
profitable? (to make enough money during
that month just to cover your expenses for the month)
2. If you start with 800 passengers in January and the growth
rate X is zero (no growth), what is the first
month at the end of which you will have a negative cash
balance?
3. Calculate the smallest rate of increase in the number of
passengers per month X, to make sure you do not
run out of cash at any time (you always end up with some cash
left at the end of each month). You might
want to use goal seek (try various starting values for X to help
goal seek to coverage).
4. Calculate the rate of increase in the number of passengers per

month X if each month you must maintain a
cash reserve (at the end of the month) of at least 10% of the
current month’s expenses.
5. Redo the previous question if the inflation rate is at 1% per
month (assume that all your expenses will
increase 1% per month).
6. Faced with high demand on one of your routes, you charter a
larger airplane for a one-time flight. You are
able to sell first class tickets at $1200 per person (but will only
be able to sell at most 10 tickets), economy
tickets at $400 per person or you can carry cargo for $1.20/lb.
Each first class passenger comes with 600 lbs of weight
(luggage, passenger and in-flight meals) and each
economy passenger weighs in at 300 lbs (including luggage,
passenger and in-flight meals). According to
FAA specifications, the aircraft can carry no more than 25,000
lbs, including both passengers and the
cargo weight.
Additionally, you need to figure out space limitations on board.
Each first class seat takes 30 s. ft. of space
and each economy seat takes 13 sq. ft. you can pile up cargo 50
lbs/sq. ft.The total floor space in the plane

is 1000 sq. ft., which needs to accommodate all the passengers
and the cargo. For simplicity, you do not
need to have full rows of seats ( i.e., you could have 17 seats on
the whole plane) and do not need to worry
about aisle space.
Use solver to figure out how many passengers and how much
cargo you can carry to maximize your
revenue for the flight. Make sure you consider all the conditions
you need for solver. The program does not
How many pounds of cargo will you need to carry to achieve
this maximum?
7. You also need to purchase insurance for you employees. The
three options available are given below:
Plan A: Monthly charge -$30, Deductible-$1300, Out of pocket
maximum-$5000
Plan B: Monthly charge-$60, Deductible-$500, Out of pocket
maximum-$2000
Hands-on project: Decision Support

Plan C: Monthly charge-$150, Deductible-$200, Out of pocket
maximum-$750
Employees may elect to participate in any one of the three
plans, or to opt out of insurance totally.
Employees who select a health plan pay the monthly charges for
all the twelve months per year; no
fractions of a year are allowed.
We use the term “medical care expenses” for the amount billed
by the medical providers. This amount is
paid in part by the patient, with the balance covered by the
insurance. “Patient costs” are the charges
incurred by the patient ( which include monthly charges and the
patient’s portion to the medical providers’
bill).
As employees incur medical expenses, they pay for part of the
medical case and the insurance pays for the
balance. Given a certain cost of medical care expenses, the
relative share of the employee and the insurance
company are as described below. The employee must pay for the
full cost of the medical care until the
expenses exceed the Deductible. For the medical care expenses
in excess of the Deductible, the plan pays
for 80% for the expenses, and the employees are responsible for
the remaining 20%. Finally, once the

expense incurred by the employee reaches Out of pocket, the
plan pays for 100% of the medical charges.
The Out of Pocket charge does not include the Monthly
Charges, not the Deductible. Both the deductible
and the out of pocket amounts are for the year; at the end of the
year, the patient needs to start over and
meet the deductible and out of pocket as new.
If the employee selects Plan B, what is the maximum amount of
patient costs they will spend on health care
by the end of the year (including Monthly charges and their
portion of the medical care, not covered by
insurance)?
8. How much do the medical care expenses need to be (at least)
for the employee to have to pay the maximum
figure, as in the question above?
9. At what cost of medical care is the employee paying the same
amount whether using insurance (the lowest
cost plan) or paying for medical care entirely on her own? You
might want to use goal seek for this
question.
10. An employee expected the cost of medical care for the
following year to be $7,000. Based on this

assumption, the employee chose the plan with the lowest
expenses for that level of medical care. IF the
actual expenses are in fact $9,000 at the end of the year, this
choice of plan might not be the best anymore.
How much worse off is the employee because of the error in
estimating medical expenses? ( What is the
difference between what the employee would have paid under
the best plan and what s/he is actually paying
in the scenario above?)

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