Chi-Chi Cheese Grinder

Gainesville, Florida

Preliminary
Design Report
Liu Yue, Aimin Jiang, Yi Zhang, Ashish Vishnoi

Table of Contents

Contents
To Our Stockholders___________________________________________________________1
Financial Summary___________________________________________________________2
Financial Statements__________________________________________________________2
Notes to Financial Statements___________________________________________________2
Independent Auditors Report____________________________________________________2
Contact Information___________________________________________________________2
Company Information__________________________________________________________2

Business CaseBusiness Case

Pg. 1

Analysis of Competitive Products

We have analyzed many cheese grinders in Amazon and Walmart websites. Below is the
table of comparison for different brands of cheese grinders.
BRANDS

Zyliss Classic

Presto 02970

Ikea Stralande

Rotary Cheese

Professional Salad

Rotary Cheese and

Grater / Grinder

Shooter Electric

Food Grater, White ,

Slicer/Shredder/

Right or Left Hand

Grinder

Product
Dimensio
ns

Weight
Price

Dish

6.5 x 5 x 3 inches

12.5 x 11.8 x 5 inches

Not Provided, Similar to

Approx. 0.8 pounds

4 pounds

1 Pound

16 USD

46 USD

34 USD

Dishwasher safe

Only Removable Parts

Dishwasher safe

Plastic

Plastic

Plastic

No Warranty

Two year parts limited

No Warranty

Washer
Safety
Material
Warranty

warranty

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Pg. 2

Cutting

Soft Cheese , Hard

Soft Cheese , Hard

Soft Cheese , Hard

Items

Cheese, Vegetables

Cheese, Vegetables

Cheese, Vegetables

Norpro 339 Stainless

Browne-Halco 746607

Stainless Steel 1 1/2 HP

Stainless Steel Rotary

Electric Cheese Grater -

BRANDS

Cheese Grater

Steel Grater
110V
Product
Dimensio
ns

8.2 x 3.2 x 4.2

(8 High) 8.2 x 3.6 x

14 13/16 Inches X 15

inches

2.8 inches

1/2 Inches X 10 3/4

Inches

Weight

Less than 1 Pound

1 Pound

Price

5.6 USD

26.5 USD

700 USD

Material

Stainless steel

Stainless steel

Stainless steel, Cast Iron

Dish

Dishwasher safe

Dishwasher safe

Dishwasher safe

Not Applicable

Not Applicable

CSA approved, NEMA

Washer
Safety

Plug
Warranty

No

No

Extended 2 year

Cutting

Soft Cheese , Hard

Soft Cheese , Hard

Soft Cheese , Hard

Items

Cheese, Vegetables

Cheese, Vegetables

Cheese, Vegetables

Business CaseBusiness Case

Pg. 3

Norpro 338

American Metalcraft

American Metalcraft

Stainless Steel 3-

PCG9 Hand Cheese

R1464 Hand Held

Drum Grater

Grater

Stainless Steel

BRANDS

Grater

Product
Dimensio
ns

2 x 2.2 x 7.5 inches

Not Available

Not Available

Weight

Less than 1 Pound

Less than 1 Pound

Less than 1 Pound

Price

14 USD

8 USD

15 USD

Material

Stainless Steel

Plastic

Stainless Steel

Dish

Yes

Yes

Yes

Extra

With 2 more cutting

With 2 more cutting

Single Drum

Attachme

pattern drum

pattern drum

Cutting

Soft Cheese , Hard

Soft Cheese , Hard

Soft Cheese , Hard

Items

Cheese, Vegetables

Cheese, Vegetables

Cheese, Vegetables

Washer
Safety

nt

After analysis, we found following things:

1- There is no product which we can change cutting speed and torque for cutting.
2- Motor driven cheese grinders are very costly due to high cost of motor.
3- There are hardly any crank driven cheese grinder which are selling below 8 USD.
4- Most of cheese grinders except automatic grinders have weight below 1 pound.

Business CaseBusiness Case

Pg. 4

Business Case
Assumptions:
1-Through market research, the investors concluded that a good quality product with the
following unit price structure would provide the corresponding sales volume in the next 5
years.
Price

sales yr. 1

sales yr.2

sales yr.3

sales yr. 4

sales yr. 5

$4.00

1,450,000

1,450,000

1,450,000

1,450,000

1,450,000

$5.00

1,350,000

1,350,000

1,350,000

1,350,000

1,350,000

$6.00

1,250,000

1,250,000

1,250,000

1,250,000

1,250,000

$7.00

825,000

825,000

825,000

825,000

825,000

$8.00

400,000

400,000

400,000

400,000

400,000

2-Total waste in material is around twenty (20) percent.

Pg. 5

Business CaseBusiness Case

Chart Title
1,600,000

1,450,000
1,400,000
1,350,000
1,250,000
1,200,000

1,000,000

800,000

825,000

600,000

400,000

400,000

200,000

4 5 6 7 8

Sales yr. 1
Sales yr.2
Sales yr.3

3- Ten (10) Percent extra factor in price escalation.

Business CaseBusiness Case

Pg. 6
Estimated product cost:

Estimated Product Cost per Unit

Estimated Weight

1 lb. + (10 %) / (-30 20 % Steel 78

%)

% 2% Rubber

Plastic

=1.1 lb. to 0.7 lb.

Raw Material Cost
Plastic @ 0.9-1.5 $/ lb.
Estimated

Raw

Steel @ $ 2 - 2.5 / lb.

Material

Cost=

Rubber @ $ 1.8 - 2.5 / lb.

2.2704

USD

(1.1*0.2*2.5+1.1*0.78*1.5+1.1*0.02*2.5)*1.2 =

Estimated development effort:

Engineering and Design Hours
Design Hours

300

Engineering Hours

200

Engineering and Design Cost 25000

USD

@ $50/hr.
Labor Cost
Mold Making Time

400

hours per 10000 Pieces

Mold Setting Time

0.5

hour per day

Injection Molding Time

60 pieces per hour per machine

Total

Machines
Blade Manufacturing Time

60 Pieces per hour forming machine

Total
Machines

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Pg. 7
Assembly Time

10 Min per Assembly line per piece

16, Assembly lines, One assembly line have 10
labors.

No. of Shifts of 8 hours

Labor Cost Asian Countries

USD 2 per hour

Total Labor Cost Per Piece

0.970972222

USD

Per

Piece
Sales yr. 1

Labor Cost

Material Cost

1,450,000

1407909.722

3292080

1,350,000

1310812.5

3065040

1,250,000

1213715.278

2838000

825,000

801052.0833

1873080

400,000

388388.8889

908160

Marketing and support costs:

Overhead Administrative Cost

5 Percent of Revenue

Marketing Cost

5 Percent of Revenue

Inventory Cost

2 Percent of Revenue

Shipping Cost (1 ton=2200 Pieces)

500 USD Per 1 ton

Insurance Cost

0.1

Percent

of

Revenue

Cost of Product ( By self-Manufacturing)

Sales
Unit

Revenue

No.

Labor

Material

Marketi

Sales

Cost

Cost

ng

Sales

& Tax

Total

Cos

Cost

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Pg. 8
Price

yr. 1

$4.00

5800000

1450000

140791

6750000

1350000

7500000

1250000

131081

5775000

$8.00

825000

3200000

400000

Unit

3065040 112356
8

121371

2838000 119159

5
$7.00

t Cost
5

3
$6.00

Per

3292080 103134

0
$5.00

Suppor

801052
388389

1873080 886275
908160

478109

72500

645633

84375

634317

93750

618080

72187

428228

40000

217465

4.45
4.70
4.94
5.19
5.44

Cost of Product if Parts are Manufactured by Suppliers and Assembled at Owner

factory
Sales

Revenue

No.

Labor

Material

Marketin

Sales

Total

Supplie

Cos

Unit

Sales yr.

Cost

Cost

Tax

Cost

r Profit

Price

@ 50%

&

Support

@ 25%

Cost
$4.00

5800000

1450000

703955

329208

1031345

0
$5.00

6750000

1350000

655406

306504

1123568

0
$6.00

7500000

1250000

606858

283800

1191591

0
$7.00

5775000

825000

400526

187308

886275

0
$8.00

3200000

400000

194194

908160

478109

Per
Unit

72500

575238

719047

84375

568776

710970

93750

557394

696743

72187

388175

485219

40000

198046

247557

4.96
5.27
5.57
5.88
6.19

Business CaseBusiness Case

Pg. 9
Total Capital Invested:
Total Capital Invested
Shareholder Capital

600000

Depreciable Capital

530000

Rent Cost

40000

Debt

600000

Depreciation Expenses of Capital Equipment =15 Percent Per Year ( Useful Life
5years)
Salvage Value of Machine after 5 Year = 10 Percent of Capital Equipment Cost
Depreciation first Year

79500

Profit before/after taxes:

Self-Manufacturing:
Sale

No.

Revenu

Total

Sales

Cost

Unit

yr. 1

Profit

Intere

Incom

Depreciatio

Net

Profit

ROI

( PBITD

st

e Tax

Profit

Margi

(%)

Pric
e
$4.0
$5.0

145000

580000

645633

135000

675000

634317

-656335
406829

60000
60000

79500

-795835

-10.2

-132

10404

79500

163281

6.4

27.2

Business CaseBusiness Case

Pg. 10
$6.0

$7.0

$8.0

125000

750000

618080

131919

825000

577500

428228

149271

320000

217465

102534

400000

9
60000

37775

79500

801936

21.3

8
60000

42981

79500

923403

34.9

5
60000

133.
153.
9

28960

79500

596239

47.1

99.3

Manufacturing by Sub Supplier and Assembly by Chi-Chi Grinder

Sale

No.

Revenu

Total

Profit

Intere

Income

Depreciatio

Net

Profit

ROI

Sales

Cost

(PBIT

st

Tax

Profit

Margin

(%)

60000

79500
-1529975

-19.3

-254.9

-499206

-5.1

-83.2

Unit
Pric

yr. 1

D)

$4.

145000

$5.

135000

$6.

125000

$7.

825000

5800000

6750000

1390475

710970

-359706

60000

79500

6
7500000

696743

532564

60000

141769

79500

251295

7.6

41.8

922805

60000

258841

79500

524463

19.0

87.4

724421

60000

199326

79500

38559

29.2

64.2

6
5775000

485219
5

0
$8.

719047

400000

3200000

247557
9

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Pg. 11

Notes to Financial Statements

Accounts
When you have a document that shows a lot of numbers, its a good idea to have a
little text that explains the numbers. You can do that here.

Type caption here.

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you can click to
select your image.

Pg. 12

Business CaseBusiness Case

Independent Auditors Report

1.1 Unqualified Opinion
1.2

Business CaseBusiness Case

Pg. 13

Contact Information
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Name
Title
Tel [Telephone]
Fax [Fax]
[Email Address]

Name
Title
Tel [Telephone]
Fax [Fax]
[Email Address]

Name
Title
Tel [Telephone]
Fax [Fax]
[Email Address]

Pg. 14

Company Information
Chi-Chi Cheese Grinder
Gainesville, Florida
Tel [Telephone]
Fax [Fax]
[Website]

Business CaseBusiness Case