"Money that is not in the bank is NOT money" . Elite sales persons know that and make sure they sell profitable products/solutions. In this exercise we teach the participants the importance of cash flow and its impact on the overall profitability and well being of his/her organization.

1. Case Study
Cash flow analysis
International Industrial Electronics Company, IIEC
International Industrial Electronics Company, IIEC is facing a chain of frequent and related
thefts from its premises. Despite the measures taken to stop the thefts the company fears that
they face a case of industrial espionage which is a serious threat to its business.
To remedy the situation IIEC issued an RFP for a security revamp the security of its facilities.
Congratulations, your company 365-24X7 has won the bid and now is the time to look seriously
into the health of this contract from a cash flow perspective. The high level requirements of the
project are:
• Review entry & exit points. • Recording of activities.
• Strengthen existing weak points. • Generate alerts.
• Install access control system. • Generate reports (logs).
• Install intruder delay and detection • Allow remote access.
systems.
• Train and handover
• Intruder prevention by alarms and
• Provide detailed documentation
lights.
Your solution was a great one and it includes components from a mix of different
subcontractors, each has state of the art sub-solutions which has a challenge in managing the
cash flow of the project.
While your customer payment terms are based on percentage of the contract value, your
subcontractors have a different set of payment terms. Your job is to analyze the cash flow
situation and provide a statement that shows the overall cash situation for the 12 months
(project duration).
Your analysis should include the Gross Profit at the happy scenario (no risk, no contingency) and
at the gloomy scenario with cost overrun, cost of money and currency devaluation.

2. High level implementation plan:
The work includes civil work, replacing doors and windows with robust ones, installing sensors
of different sorts and types, cameras, central control system, recording equipment,
programming, training and documentation.
1. System level design. 7. Programming
2. Detailed component design. 8. Cameras & Alarms
3. Material order. 9. Testing
4. Construction work. 10. Training
5. Doors & windows. 11. Documentation & handover
6. Sensors’ installation 12. Warranty 1 year
List of subcontractors, corresponding deliverables :
1. CON-MAN
CON-Man is a reliable civil works company, its scope includes:
• Reinforce factory gates’ concrete foundation.
• Increase walls’ height.
• Build new walls in sensitive areas to increase the perimeter.
2. Doors “R” us
• Replace external perimeter windows with reinforced glass ones.
• Replace wooden doors by steel ones.
• Replace main gates by Benford 6100 fortified gates.
3. Sense & sensibility
• Infrared motion detection
• Magnetic proximity for doors/windows
• Glass integrity sensor
• Temperature sensor

3. 4. Sensitive sensors Inc.
• Temperature: Analog or Serial
• Infrared Sensor: Self-Designed
• Magnetic sensors: HALL effect switch
5. Control System Inc.
• Main control processor: ATMega128
• RF link: ZigBee Wireless
• Internet: TBD Ethernet module
• Data Storage: SD cards
• Alarm Trigger: Standard IO
• Programming: C/C++ using Eclipse
• Visual Station: Connected via Serial
6. Electric works & beyond
• Provide separate feeder line for security system
• Provide AC hot backup
• Electrical wiring
• Signal wiring
• Switchboards

4. Quoted prices are mentioned in the spreadsheet that you will receive during the exercise,
however payment terms are provided in the following table:
Payment terms of subcontractor
Company Advance payment Second payment Third payment Fourth payment
Con-Man 50% 50% after 4 weeks
Doors-R-Us 80% 20% after installation
Sense & sensibility 60% 20% after delivery 20% after
installation
Sensitive sensors %011
Inc.
Control Systems Inc. 100% of SW 100% SW 50% installation
50% of installation
Electric works & 30% 30% cable delivery 30% Elec. cable inst. 10% signal. cable
beyond inst.
Payment terms of your customer IIEC:
1. stem level design.
2. Detailed component design.  10% Advance payment
3. Material order  10% after civil work completion
4. Construction work.  15% after doors and windows
5. Install doors & windows. installation
6. Sensors installation.  20% after sensors and cameras
7. Programming installation
8. Cameras & Alarms.  20% after testing and training
9. Testing  15% after preliminary acceptance
10. Training
 10 after warranty end and final
11. Documentation & handover
acceptance
12. Warranty 1 year.
Your analysis should include the Gross Profit at the happy scenario (no risk, no contingency) and
at the gloomy scenario with cost overrun, cost of money and currency devaluation.
Good luck to all participants
Ashraf Osman