Brilux Memo and Report Essay

1386 Words Oct 14th, 2011 6 Pages
FOT-320 | R&D Investment Decision | Memo to Claude Boucher – Director of Research and Development | In recent months, Brilux customers have hinted that combining ARTRAN, our flagship optical data service platform, with a new fibre optic transportation product would increase the market appeal of the Brilux portfolio. The investment required to bring this product (tentatively dubbed FOT-320) to market is still uncertain but clearly represents a major investment. Moreover, developing FOT-320 will tie up valuable human resources for twelve to eighteen months. . This memo attempts to provide numerical analysis of the variables associated with development costs and projected sales revenue to support a decision.Using the data given, …show more content…
What other use can we make of our R&D capital and resource?
In order to provide more complete decision support, this data and information is required.
Incomplete Analysis: Missing Data Evaluated on its merits alone, the FOT-320 decision is well supported by the data provided.
However, given the significant costs involved in a failed FOT-320 investment (money and resources) we require more than fiscal projections for FOT-320 to make a sound recommendation.
The alternative of finding a partner to provide the fibre optic transport product was not subjected to analysis.
What other use can we make of our R&D capital and resource?
In order to provide more complete decision support, this data and information is required.
R&D Investment Decision
The Situation
Our flagship product, ARTAN, is extremely popular and is, in fact, responsible for Brilux’s better-than-industry-average performance in spite of the current historical low for the telecommunications equipment market. Our customers are suggesting that a fibre optic transportation add-on would make ARTAN even more attractive.
Brilux has the engineering horsepower required to develop such a product (dubbed FOT-320) and we foresee no significant technical hurdles. Financially, the development does represent a large capital investment. The investment in human capital, tied-up solely on this project for 12-18

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