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Problem Definition

Our client is an electronics holding called Chip’n’Chip.
They want to invest in a Printed Circuit Board (PCB) manufacturer called OnBoard, and asked you whether it’s going to be a good investment.
How would you help them?

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Exhibits

Structure

Cost overview OnBoard

If the investment takes place, the unit costs for the new 3-layer boards will be exactly the same as for the old technology. The unit price, however, will be of $6.5.

Cost overview OnBoard

If the investment takes place, the unit costs for the new 3-layer boards will be exactly the same as for the old technology. The unit price, however, will be $6.5.

That means a profit US$ 3 instead of US$ 1.5.

Profits at 100% production

Assuming the transportation costs from China and Germany to the USA are not significant (as PCBs have a very high value per kilo) this increase in production would result in a new profit for the sales of 2-layer PCBs of US$27.5 million (15+7.5+5).