Financial Modeling for the Social Sector05+000Assignment 2

- Insert your assumptions and responses

- Calculated by formula

BOUNDING THE OPERATIONAL UNIT Scenario 1 Scenario 2 Scenario 3 Scenario 4

(1) Total population that can be reached by an Operational Unit 7,751 8,000 8,200 8,500
(2) % of that population that are potential target of the operation 10% 12% 15% 20%
(3) =(1) x (2) The size of the potential target market (Available Target Market) 775 960 1,230 1,700
(a) Penetration rate (%) of the product/the service in the market 20% 20% 20% 20%
(b) Market share (%) of your venture at steady state 50% 50% 50% 50%
(4) =(a) x (b) Penetration rate of your venture at steady state 10.0% 10.0% 10.0% 10.0%
(5) = (3) x (4) Operational Unit's customer/beneficiary base at steady state 78 96 123 170
(c) The products intended frequency of use (per Month) 0.04 0.04 0.04 0.04
(d) The product's average repurchase rate by consumers (per Month) 4% 4% 4% 4%
(e) The size of the customer unit 31 38 49 68
(6) = (5) x (c) x (d) / (e) Operational Unit's monthly customer transaction numbers at steady state 1 1 1 1

Notes on your assumptions

Share how you've decided to use some of the key assumptions in the above calculation
1. Our assumption on the potential target market are from 10 percent of the total population household in Distric Halim means that there are 775 household
become our potential target market, 2. Penetration rate of our venture are 20 percent means that the household already have skills in handicraft, 3. From
scenario 1 we found that with 20% penetration rate of our services in the market and 50% market share of our venture at steady state will cost our operational
unit for customer/beneficiary 78 percent, 4. The product's average repurchase rate by customer (per month) is 4 percent coming from 1/24 means that the
customer will use our service once a month with a project term of 2 years. Our operational unit's monthly customer transaction at steady state is 1, means that
once 1 month we have to produce someone in the field of waste handicraft.

Reflections
What have you noticed from this exercise? If you have tried to scenario test using different set of assumptions, share your findings here
1. We understand the concept of an operational unit, 2. We understand the difference of an operational unit and the head office, 3 we clearly understand the
process of bounding an operational unit and how to make projection at 'steady-state'. We understand how to make estimation of the number of customer a
single operational unit could serve at steady-state

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 Financial Modeling for the Social Sector
Assignment 3

- Insert your work from previous assignment

- Insert your assumptions and responses
- Calculated by formula
Scenario 1 Scenario 2 Scenario 3 Scenario 4
RUNNING COST (per OPERATIONAL UNIT)
(1) Human Resource Cost (per Month) 19,322,034 23,184,300 27,670,282 33,262,172
Salesperson
(c) Operational Unit's monthly customer transaction numbers at steady state 1 1 1 1
(a) - Days available for salespeople for doing sales (per Month) 18 18 18 18
(b) - The number of sales transactions performed each day 4.3 5.2 6.4 8.2
(d) = (a * b) Number of sales transactions per salesperson (per Month) (=client load) 59 59 88 136
(c / d) Number of salesperson required 0.01695 0.01686 0.01134 0.00738
- Wage and benefits (per Month per individual) 19,000,000.00 22,800,000.00 27,360,000.00 32,832,000.00
- Transportation allowance (per Month per individual) - - - -
- Phone allowance (per Month per individual) - - - -
- Other costs (per Month individual) - - - -
(sum) HR cost for everyone in this position 322,034 384,300 310,282 242,172
FACILITATOR
Number of individuals required 3 3 3 3
- Wage and benefits (per Month) 2,000,000.00 2,400,000.00 2,880,000.00 3,640,000.00
- Transportation allowance (per Month) - - - -
- Phone allowance (per Month) - - - -
- Other costs (per Month) - - - -
HR cost for everyone in this position 6,000,000 7,200,000 8,640,000 10,920,000
PROJECT OFFICER
Number of individuals required 2 2 2 2
- Wage and benefits (per Month) 1,000,000.00 1,200,000.00 1,440,000.00 1,700,000.00
- Transportation allowance (per Month) - - - -
- Phone allowance (per Month) - - - -
- Other costs (per Month) - - - -
HR cost for everyone in this position 2,000,000 2,400,000 2,880,000 3,400,000
FIELD STAFF
Number of individuals required 11 11 11 11
- Wage and benefits (per Month) 1,000,000.00 1,200,000.00 1,440,000.00 1,700,000.00
- Transportation allowance (per Month) - - - -
- Phone allowance (per Month) - - - -
- Other costs (per Month) - - - -
HR cost for everyone in this position 11,000,000 13,200,000 15,840,000 18,700,000
(2) Capital Asset Depreciation Cost (per Month) 625,000 625,000 625,000 625,000
Sewing Machine
(e) Number of units 5 5 5 5
(f) Cost per unit 1,500,000 1,500,000 1,500,000 1,500,000
(g) Useful lifespan for this capital asset (in month) 12 12 12 12
(h) = (e * f / g) Depreciation cost on this capital asset 625,000 625,000 625,000 625,000
(3) General Operating Costs (per Month) 2,000,000 2,450,000 2,890,000 3,500,000
General administration costs 1,000,000 1,200,000 1,440,000 1,700,000
Costs of selling or deliverying 500,000 625,000 725,000 900,000
Costs for marketing and advertising 500,000 625,000 725,000 900,000
(A) = (1+2+3) Running Costs for Operational Unit 21,947,034 26,259,300 31,185,282 37,387,172

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 Financial Modeling for the Social Sector
Assignment 3

RUNNING COST (for HEAD OFFICE)

(4) Human Resource Costs (per Month) 32,344,064 55,280,001 99,122,581 180,249,355
Territory Manager
(k) The entire population of the entire geography that the venture eventually aims to serve 7,751 8,000 8,200 8,500
(l) Total population that can be reached by a single Operational Unit 775 775 775 775
(m) = (k / l) Total Number of Operational Unit at steady state 10 10 11 11
(n) - # of days per visit 4.3 5.2 6.4 8.2
(o) - # of visits to each Operational Unit on average (per Month) 1.1 1.3 1.6 2.1
(p) = (n * o) Number of days spent by a territory manager for a vist to a single Operational Unit 4.7 6.7 10.2 16.8
(q) Days available for territory manager to visit Operational Units (per Month) 4 4 4 4
(r) = (m / (q/p)) Number of territory managers required 11.7 17.2 27.1 46.1
- Wage and benefits (per Month per individual) 2,500,000.00 3,000,000.00 3,500,000.00 3,800,000.00
- Transportation allowance (per Month per individual) -
- Phone allowance (per Month per individual) -
- Other costs (per Month individual) -
(sum) HR cost for everyone in this position 29,344,064 51,680,001 94,802,581 175,149,355
MONITORING AND EVALUATION
Number of individuals required 1 1 1 1
- Wage and benefits (per Month) 1,000,000.00 1,200,000.00 1,440,000.00 1,700,000.00
- Transportation allowance (per Month) - - - -
- Phone allowance (per Month) - - - -
- Other costs (per Month) - - - -
HR cost for everyone in this position 1,000,000 1,200,000 1,440,000 1,700,000
MARKET SPECIALIST
Number of individuals required 1 1 1 1
- Wage and benefits (per Month) 1,000,000.00 1,200,000.00 1,440,000.00 1,700,000.00
- Transportation allowance (per Month) - - - -
- Phone allowance (per Month) - - - -
- Other costs (per Month) - - - -
HR cost for everyone in this position 1,000,000 1,200,000 1,440,000 1,700,000
PRODUCT SPECIALIST
Number of individuals required 1 1 1 1
- Wage and benefits (per Month) 1,000,000.00 1,200,000.00 1,440,000.00 1,700,000.00
- Transportation allowance (per Month) - - - -
- Phone allowance (per Month) - - - -
- Other costs (per Month) - - - -
HR cost for everyone in this position 1,000,000 1,200,000 1,440,000 1,700,000
(5) Capital Asset Depreciation Costs (per Month) 4,166,667 4,750,000 5,000,000 5,416,667
OFFICE BUILDING 500,000,000 570,000,000 600,000,000 650,000,000
(s) Number of units 1 1 1 1
(t) Cost per unit 500,000,000 570,000,000 600,000,000 650,000,000
(u) Useful lifespan for this capital asset (in month) 120 120 120 120
(s * t / u) Depreciation cost on this capital asset 4,166,666.67 4,750,000.00 5,000,000.00 5,416,666.67
(6) General Operating Costs (per Month) 500,000 600,000 720,000 750,000
General administration costs 500,000 600,000 720,000 750,000
Costs of selling or deliverying - - - -
Costs for marketing and advertising - - - -
(B) = (4+5+6) Running Costs for Head Office 37,010,730 60,630,001 104,842,581 186,416,022
OPERATIONAL UNIT'S TOTAL RUNNING COSTS
(7) Total Number of Operational Units at steady state (see (m)) 10 10 11 11
(C) = (B)/(7) Allocated Head Office Running Cost (to each Operational Unit) 3,700,596 5,873,531 9,908,902 16,996,755
(A + C) Total Running Costs that each Operational Unit needs to cover 25,647,629 32,132,831 41,094,185 54,383,926

Reflections
What have you noticed from this exercise? If you have tried to scenario test suggested in the 'How to use the Template' document, please share your findings here
From this module we understand the concept of 'whole-cost structure' and How to identify the three main components of 'total running costs' and how to estimate them in our project. This
excel template really help us to identify the items of running cost for operational unit and which cost for the head office.

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