Feasibility Analysis Executive Summary for a Video Store

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Feasibility Analysis Executive Summary ..............................................................................................2 Business Plan .....................................................................................................................................5 System Request – Lucky8 Video Store .................................................................................................7 Project Standards............................................................................................................................. 11 Description of the Application .......................................................................................................... 12 Risk Assessment............................................................................................................................... 13 Feasibility Study............................................................................................................................... 14 Functional Requirements: ................................................................................................................ 21 Nonfunctional Requirements: ........................................................................................................... 22 Appendix A: FSSD Financials ............................................................................................................. 23 Appendix B: DFD .............................................................................................................................. 26 Appendix C: ERD & Database Relationships ...................................................................................... 28 Appendix D: System Analysis Scheduling .......................................................................................... 31

Lucky8 Video’s System

Feasibility Analysis Executive Summary

The First State System Development team has created the following feasibility analysis for the Lucky8 Video’s System Project. The System Request is attached, along with a detailed feasibility study. The highlights of the feasibility analysis include:

Technical Feasibility ● Competition risk: high ● Technological feasibility risk low ● Cost of materials risk medium ● Location feasibility risk medium

Economic Feasibility  Costs and benefits Development Expenses include: Developer salaries, server hardware Operation Expenses include: Maintenance salaries (servicemen/programmer troubleshooters) Intangible benefits include: Faster service, more convenient 

Values of Costs/Benefits Estimated Development Expense: $7500 ($2500 server + $5000 total development salary) Estimated Operational Expense: $700 maintenance fee Estimated Consumer-Related Expense: $20,000 for each rental box (includes DVD’s, Blue-Ray, and Games)

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Cash Flow Year 1: $8200 Year 2: $700 + ($20,000 * X) Year 3: $700 + ($20,000 * X) Year 4: $700 + ($20,000 * X) Year N: $700 + ($20,000 * X)



Net Present Value (NPV) Current Redbox Competitor System Cost: $15,000 each Redbox rental unit + $7000 merchandise $2 - $20 per DVD Computer Analyst – Annual Salary: $57,202 Marketing Manager Annual Salary: $90,000 500 – 1000 items in a Redbox machine $147,202

Redbox income DVD rental price $1.20 * X Blue-ray rental price $1.50 * X Game rental price $2.00 * X

Lucky8 System Cost: $20,000 each Lucky8 rental unit 3 Servicemen at $15,000/yr 1 System administrator at $56,000/yr $101,000

Lucky8 income DVD rental price $1.20 * X Blue-ray rental price $1.50 * X Game rental price $2.00 * X 3

Net Present Value = 147,202 – 101,000 = $46,202 Return on Investment (ROI) (147,202 – 101,000) / 101,000 = 0.457 Break-even Point $8200

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First State System Development Business Plan

Description of FSSD A pioneer in comprehensive IT outsourcing since 2008, First State System Development (FSSD) is a full-service IT consulting and outsourcing firm for businesses in and...
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