exercises_module4

Class Objective: Apply theoretical concepts of Project Size, Optimal Location, and Organizational Structure to practical, real-world business scenarios.

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🟢 Exercise 1: Optimal Location using Qualitative Point Method (Basic Level)

Context: A renewable energy company, "Solaris", wants to open a new solar panel manufacturing plant. They have narrowed the options down to three cities: City A, City B, and City C. To make the decision objectively, the technical committee has defined four locational factors and assigned them a specific weight (importance percentage):

Factor	Weight (%)
Proximity to Raw Materials	35%
Cost of Qualified Labor	25%
Logistics and Transport Infrastructure	25%
Tax Incentives (Regional Development)	15%

The technical team visited the three cities and scored them from 1 to 10 on each factor (10 being perfect):

Factor	City A	City B	City C
Proximity to Raw Materials	9	6	8
Cost of Qualified Labor	5	8	7
Infrastructure	8	9	6
Tax Incentives	4	7	10

The Challenge:

• Calculate the weighted score for each city. Which city is the optimal location for the plant?

• If the Government removes the Tax Incentives for City C (Score drops to 1), does the final decision change?

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Teacher's Solution Notes (provided)

City A Total Score: 7.00 City B Total Score: 7.40 City C Total Score: 7.55 --> City C Wins.

(If C loses incentives, its score drops to 6.20, making City B the winner).

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🟡 Exercise 2: Sizing the Project & Modular Growth (Intermediate Level)

Context: A tech startup is building a data center to offer cloud storage services. Installing servers is highly expensive.

• Total Market Demand (Unsatisfied): Currently 5,000 Terabytes, but growing 20% annually for the next 5 years.

• Minimum Economic Size (Technology restriction): You cannot buy servers smaller than blocks of 2,000 Terabytes.

• Current Financing Capacity: Enough to purchase a maximum of 6,000 Terabytes of infrastructure right now.

The Challenge:

• Year 0: How much installed capacity should the project buy on day 1 to meet demand without keeping massive unused servers (idle capacity)? Prove why buying 10,000 Terabytes right now is a bad financial idea.

• Formulate a modular growth plan.

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Provided Plan (diagram)

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🔴 Exercise 3: Organizational Design & Legal Framework (Advanced Level)

Context: Three engineering students have designed a revolutionary drone for agricultural fumigation. They want to start selling it commercially and flying it over large crop fields. They need to structure their project administratively and legally.

The Challenge:

• Legal Solution: Should they register as a sole proprietorship, a general partnership, or a Limited Liability Company (Corporation)? Justify the answer focusing on isolating investor risk from company risk.

• Organizational Structure: Based on the business needs (building drones, selling drones, complying with the law), design a functional organizational chart indicating the minimal necessary departments (e.g., Production, R&D, Sales, Finance, Legal). Draw it!

• Legal Framework (Regulations): List at least 3 specific, highly critical areas of law or regulation they must research and comply with before flying drones that drop chemicals over commercial crops.

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Hint for the Legal Framework (provided)

Think about civil aviation authority regulations, environmental protection laws (handling toxic pesticides), and occupational risk laws for drone pilots and farm workers.

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You can use these exercises as in-class activities or assignments. Each exercise contains context and clear challenges — use the steppers above to guide students step-by-step.