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Economic Consideration

Economic Consideration. Chemical Product Engineering asep muhamad samsudin. Commodity Product Vs Non-Commodity Products [ how much product is made] [what equipment is used][which producer makes the most money]. Commodity Products.

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Economic Consideration

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  1. Economic Consideration Chemical Product Engineering asepmuhamadsamsudin

  2. Commodity Product Vs Non-Commodity Products[how much product is made] [what equipment is used][which producer makes the most money]

  3. Commodity Products • How much is made? Commodities are normally made in quantities greater than 10.000 tons per year. • What equipment is used? Commodities are normally manufactured in dedicated equipment which is operated continuously. • Which producer makes the most money? As a general rule, the one with the lowest manufacturing cost will be the most profitable.

  4. Non-Commodity Products • How much is made? While there is a much wider range for products than for commodities, the volumes are much smaller, and many are made in quantities less than 10 tons per year. • What equipment is used? These chemical products tend to be made in generic, off-the-shelf equipment, the operation of which is sometimes not well quantified. • Which producer makes the most money? The company perceived as making the most effective product usually makes the most money. As a rule of thumb, the first company to market gains around 70% of total sales.

  5. Economic for Commodities

  6. Hierarchy of Process Design • Batch vs. continuous • Input - output structure • Reactions, including recycles • Separations and energy integration

  7. Economic Potensial Three sequential test • Estimate the potential based only on the current prices of the product and the raw materials. • How much energy we will need to make our product. • Estimate the capital required in order to complete this economic précis.

  8. Capital Requirement

  9. Economic for Non-Commodities

  10. Product's Viability • The important factors determining a product's viability are • Its potential life­time in the market, • The size of that market. • The price the product. • The life of non-commodity chem­ical products in the market may be limited by • The expiry of patent protection. • The arrival of a competitor's better product, • Changes in fashion.

  11. Product‘s Economy Summary • Product economics can be summarized in various ways, including net present value, return on investment, and payback time. • Net present value (NPV) is the product's total value. in today's money, including all future cash flows. • Return on investment (ROI) is the average profit per year (again in today's money) divided by the investment. • The payback Period (PBP) is the point at which the initial investment has been just recouped by net profits. The payback time must be significantly less than five years. • Costs are normally dominated by salaries, usually mainly research and development and marketing.

  12. Gantt Chart

  13. Gantt Chart

  14. BUSINESS PLAN

  15. Introduction • Business plans are commonly around 40 pages long, including perhaps 10 pages of financial analysis, often as an appendix. • The purpose of the business plan is to persuade the reader, who has money, that the potential benefits of the busi­ness proposition outweigh the risks and that a healthy profit is likely to be made. • Doing this effectively requires not only outlining the benefits and how they will be achieved, but also realistically estimating the risks • The business plan must emphasize the positive, but must also be realistic.

  16. Good Business Plan • The executive summary • The business idea • The management team • Intellectual property • Market potential • Competition • Finance

  17. Business Model • A business model describes the rationale of how an organization creates, delivers, and captures value

  18. 9 Building Blocks

  19. 9 Building Blocks

  20. 1 CUSTOMER SEGMENT/CS • MASS MARKET • NICHE MARKET • DIVERSIFIED • MULTI SIDED PLATFORM

  21. 2 VALUE PROPOSITION/VP • PRICE • DESIGN • BRAND • FAST/GETTING THE JOB DONE • CONVENIENCE • ACCESSIBILITY • ETC

  22. 3 CHANNEL/C

  23. 4 CUSTOMER RELATIONSHIP/CR • PERSONAL ASSISTANCE • SELF SERVICE • AUTOMATED SERVICE • COMMUNITIES • CO-CREATION CUSTOMER HELP EACH OTHER.

  24. 5 REVENUE STREAM/RS • PRODUCT SALE • USAGE FEE • SUBSCRIPTION FEE • LENDING/RENTING/LEASING • LICENSING • BROKERAGE FEE • ADVERTISING

  25. 6 KEY RESOURCES/KR • PHYSICAL • INTELLECTUAL • HUMAN • FINANCIAL

  26. 7 KEY ACTIVITIES/KA • PRODUCTION • PROBLEM SOLVING • PLATFORM&NETWORK

  27. 8 KEY PARTNERSHIP/KP • MOTIVATION: OPTIMIZE RESOURCE AND ACTIVITIES, REDUCTION OF RISK & UNCERTAINTY, ACQUISITION OF PARTICULAR RESOURCES &ACTIVITIES

  28. 9 COST STRUCTURE/CS • FIXED COST VS VARIABLE COST • COST DRIVEN VS VALUE DRIVEN

  29. 7 8 4 1 2 3 6 9 5

  30. Thank You

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