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The Project to Reduce Illiteracy The project will be a 6-year computer-based course Each registered student will be required to provide their own computer CDs will distribute course content and assessments A maximum of 200 students will be accepted each year year
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The Project to Reduce Illiteracy in Young Adults
A Systems Approach Feasibility Study
Presented by SG-1 ConsultantsDecember 2,2012
The Project to Reduce Illiteracy
An educational company forwarded to SG-1 Consultants the request of an anonymous developing country’s government for an educational project to reduce illiteracy in its young adult population.
The country has installed electricity and Internet to support the project.
The U.S. Agency for International Development (USAID) will fund a U.S contractor to develop and deploy this project and has requested a proposal from SG1 Consultants.
The Project to Reduce Illiteracy
The project will be a 6-year computer-based course
Each registered student will be required to provide their own computer
CDs will distribute course content and assessments
A maximum of 200 students will be accepted each year year
The Project to Reduce Illiteracy
The following feasibility study by SG-1 Consulting uses a systems approach and covers:
Course Management Course Materials Course Assessments Student Support
The Project to Reduce Illiteracy
The systems approach expense breakdown:
Development and production costs Maintenance costs of software Annual presentation costs per student
The Project to Reduce IlliteracyDevelopment and Production Costs
Course Management/Overheads: Needed for 18 months
Course Manager @ 35 % of $72,000/annum
Secretary @ 30% of $24,600/annum
Total Fixed Cost $48,870.00
The Project to Reduce IlliteracyDevelopment and Production Costs
Software Development:
Authoring - 1350 hours @$60.00/hr $81,000.00 Software copyright $ 500.00 _________ Total Fixed Cost $81,500.00
The Project to Reduce IlliteracyDevelopment and Production Costs
Printed Material Development:
Authoring software manual $1,000.00 Editing/Designing software manual $1,000.00 Software manual copyright $ 250.00 ________ Total Fixed Cost $2,250.00
The Project to Reduce IlliteracyDevelopment and Production Costs
CD Production:
Production development $5,000.00 Authoring assignments (included) $ 0.00 ________ Total Fixed Cost $5,000.00
The Project to Reduce IlliteracyDevelopment and Production Costs
SUMMARY
Total Cost of Course Management $48,870.00 Total Cost of Software Development $81,500.00 Total Cost of Printed Material Development $ 2,250.00 Total Cost of CD Development $
5,000.00
Total Fixed Cost of Development $137,720.00
The Project to Reduce IlliteracyMaintenance Costs of Software
Authoring - 700 hours @ $60.00/hr $ 42,000.00 Editing/Designing Software Manual $ 1,000.00 Production of CD $ 5,000.00
Total fixed costs of maintenance $48,000.00
The Project to Reduce IlliteracyTOTAL FIXED COSTS
SUMMARY
Total fixed costs of development $137,720.00
Total fixed costs of maintenance $ 48,000.00
Total Fixed Costs $185,720.00
The Project to Reduce IlliteracyAnnual Presentation Costs
Student Support - consists of a tutor to be paid hourly for each group of 25 students
Assignment markings (3) @ $95.00 $ 285.00 (variable cost) Tutor (per 25 students) $ 8.00 (semi-variable cost) Tutor expenses $ 2.00 (semi-variable cost) Total variable costs $285.00 Total semi-variable costs $ 10.00 Total Costs Student Support $295.00
The Project to Reduce IlliteracyAnnual Presentation Costs
Replication and Distribution of student materials(rate is per item)
Production of study guides $10.00 Production of CD $12.00 Packaging/Postage $10.00 ______ Total Fixed Cost $32.00
The Project to Reduce IlliteracyTOTAL VARIABLE COSTS
SUMMARY
Total Student Support Costs $295.00
Total Replication/Distribution Cost $ 32.00
Total Variable Costs Per Student $327.00
The Project to Reduce Illiteracy
Calculations
Annualization was based on the requested 6 year course life.
Annualization of Fixed Maintenance
Input r rate 7.5%
Input n years 2
Input C amount 48,000
(1+r) n (Intermediate value)
1.1556
a(r,n) Annualization factor
0.557
Result C*a(r.n) Annualized amount
26,733
The Project to Reduce Illiteracy
0
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Number of students
Average cost
Aggregate unit costs
Average Cost Per Student
The Project to Reduce IlliteracyBreak Even Point
As documented in the handout (Excel File) and shown in the table below, with tuition at $750.00 per student, the project will show a profit in Year 3. This will create a break even point at 542 students.
Year 1 2 3 4 5 6
Income 150,000 300,000 450,000 600,000 750,000 900,000
Profit -144,780 -60,180 24,420 109,020 193,620 278,220
Break EvenPoint
542
The Project to Reduce Illiteracy
0100000200000300000400000500000600000700000800000900000
1000000
200 400 600 800 1000 1200
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Number of students
Cost & Income
F annualized (total)
Income
TC=F+VxN
Break even pt 542
Cost & Income for Break Even Point
The Project to Reduce Illiteracy
AcknowledgmentThe SG-1 Consultants who prepared this study are:
Kabir Armand Bankole
Theresa Eugenia Callahan
Sandra K Haggerty
Paul Kemp
