Final Part: Lifecycle Costing & Optimization in a Nutshell

 

Hi all!

In our previous discussions, I promised to guide you through Working Capital Management, essential for both new startups and existing product manufacturing and selling needs. Let's revisit the steps:

Step 1:

In the initial 10-minute video, I demonstrated how to start optimization with a set markup. By using step-by-step solvers, I ensured that everything tallied correctly. However, the bank and profits were still negative. I then incrementally increased the working capital from 500k to 1 million, but the bank and profits did not turn positive.

Step 2:

In the following video, I adjusted the markup to balance both bank and profits, proving that these innovative techniques and model-building methods work precisely. (Click here for Excel)

Recap:

Chapter 1: I constructed standard financial statements and utilized solvers on them.

Chapter 2: I challenged you to identify linking and financial errors in the model to highlight that these techniques still function despite errors and to provide a learning opportunity in fixing those errors.

Chapter 3: I introduced economic pricing models (MC=MR & TC=TR) and demonstrated their effectiveness in financial planning.

Chapter 4: I then shifted the focus to Multi-Product optimization, which we successfully accomplished.

Chapter 5: In this chapter, I introduced the linear equation method of tallying the balance sheet. While less effective, it provided a different perspective on financial management.

Chapter 6: This final chapter focused on managing working capital and markups, analyzing simulations to ensure you meet your goals.

This concludes the free optimization techniques available online.

Thank you all for your dedication and engagement throughout this journey. It's been a pleasure sharing this knowledge with you. Keep pushing the boundaries of your financial planning skills!

Goodbye and best of luck in all your future endeavors! 

Author's Note: As we’ve wrapped up setting the optimal prices, I'm excited to announce the next step: implementation! Once you start operations, what happens if sales don't meet the defined levels? My model anticipates this scenario and includes solutions to overcome it. Stay tuned, folks! 

Warm regards,

© Yasaswi Gomes 2024.

 

Disclaimer

This publication presents unprecedented methods and techniques in financial optimization and management. Readers are free to conduct further research based on the content provided. The information contained herein can be used for both personal and professional gains.