Reference no: EM13938430

As the Information Systems Manager you have been given the responsibility for implementing a new "smart shopping trolley" system for a grocery/supermarket chain. This smart shopping trolley technology will help customers in the store by adding up the cost of items at the same time that they are placed in their supermarket trolley. It will also help shoppers locate the items in the store, in the quantities needed, when they enter or select a particular recipe. As you have studied Information Systems Strategy, you know that introducing a new information technology system won't be successful unless you have assessed the impact on the business strategy and the four business functions (marketing, production, finance and HR) within the firm. You also need to do a cost benefit analysis of introducing the technology across 10 stores in different regions, if the pilot study in the first store is successful. Your report includes a presentation to the CEO. You will submit a handout for the CEO containing the Cover letter, Spreadsheet and Reference List. Financial model of the business case Based on your research develop a spread-sheet model of your business costs over a 6 year period; assume a discount rate of 10 per cent. Your business model should include the following analysis to ascertain the financial viability of the project: 1. Payback period 2. Net present value (NPV) 3. Internal rate of return (IRR), and 4. Profitability index HINTS: To obtain the payback period you would first need to calculate the cumulative net cash flow. Use the NPV and IRR functions provided in Microsoft Excel. You may need to search the Internet for information if you are not familiar with how to use these functions. Provide an explanation to the CEO to help him/her interpret your results and what they mean. Sensitivity analysis for the business case Using the results you obtained above as the base case, conduct a sensitivity analysis to examine the impact of the critical cost and benefit variables on the viability of smart shopping trolley system project. Provide three specific scenarios of consideration. You must clearly specify the basis of the three scenarios i.e. which critical cost variables they are examining in the sensitivity analysis. Provide a note to explain the results to the CEO.