Ice Cream Truck Project

King Abdulaziz University

Faculty of Engineering
Engineering Economy

Engineering Economy (IE255)

Ice Cream Truck Project

Member name ID number

Ibrahim Kensarah 1846033

Khalid Abdulmajeed 1740001

Moath Basuhail 1847706

Omar Al-Sharef 1766797

Instructor’s Name: Dr. Majed Abubakr Baghdadi

Section: CA

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 Ice Cream Truck Project

Table of Contents
Introduction:.................................................................................................................3
Project Management:...................................................................................................3
Deployment chart:....................................................................................................3
Gantt chart:...............................................................................................................3
Problems’ Definition and Results:..............................................................................4
Cost Estimation.........................................................................................................4
Cash flow diagram....................................................................................................5
Conclusion:...................................................................................................................5
References:....................................................................................................................6
Appendix A (Meeting Agenda):..................................................................................7
Appendix B (Excel sheet):...........................................................................................8

List of Table

Table 1: Deployment chart for the task's distribution.............................................3

Table 2: Gantt chart for the project tasks.................................................................3
Table 3: Estimation costs of project items.................................................................4
Table 4: Fixed costs table............................................................................................4
Table 5: Variable costs table.......................................................................................4
Table 6: Attendees........................................................................................................7
Table7 : The work of the meeting...............................................................................7

List of Figures
Figure 1: Cash flow dighram......................................................................................5

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 Ice Cream Truck Project

Introduction:

Engineering economics, previously known as engineering economy, is a

subset of economics concerned with the use and "application of economic principles"
in the analysis of engineering decisions. In this project, we will use what we have
learned in IE255. We will study the project of our colleague Ibrahim which is an ice
cream truck project. Then we will decide if the project will succeed or loses. The life
time of the project is five years because we think this is a good lifetime for a small
business. After that, we will find the breakeven point for the chosen project. Finally,
we will use MS Excel to solve all these problems.

Project Management:

One of the requirements of the IE255 Project is to create a Gantt chart using
the tasks that were assigned to each member and its timeline. The first table will
illustrate our tasks disruption to the team members the second one shows how much
time each task will take.

Deployment chart:

Table 1: Deployment chart for the task's distribution

TASK discretion KHALI MOATH IBRAHEM OMAR

D
The selection of the project topic
Making of gantt chart
Getting items cost estimation
Making the cost calculation
Creation of deployment chart
Getting rustles using MS excel
Edit and finish the final project

Gantt chart:

Table 2: Gantt chart for the project tasks

TASK discretion Sunday Monda Tuesday Wednesday Thursda

y y
The selection of the project
topic
Making of Gantt chart
Getting items cost
estimation
Making the cost calculation
Creation of deployment
chart

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 Ice Cream Truck Project

Getting rustles using excel

Edit and finish the final
project

Problems’ Definition and Results:

First, we have gathered information about the costs of each item in our project.
We have used some websites to find information. After that, we will study if the
project is financially viable or not. The lifetime of the project is five years. The
minimum attractive rate of return of the project is 7%/year, and the cost of the items is
shown in Table3. For the market value of the truck, the price will decrease by 15%
every year. For the salvage value of the ice cream machine, after five years no one
will buy it so it will be sold as scrap. Scrap can be sold by 6 SR/kilo, the machine
weight is almost 200 kilograms, so its salvage value is 1200SR.

Cost Estimation

Table 3: Estimation costs of project items

ITEM COST
Ford Transit Custom (1) 105,000SR
M & O for Ford Transit Custom 3,500SR/year
Ice cream machine 25,000 SR
M & O for Ice cream machine 300SR/year
Preparing the truck 23,000SR
Utility (Electricity and Water) 1,500SR/year
Salary of Worker 18000/year
Ice cream mix [2] 0.5SR/unit
Ice cream cone [2] 0.4SR/unit
Salvage value for Ice cream machine 1200SR
Market value of truck after 5 years 52277SR

Table 4: Fixed costs table

ITEM COST
Ford Transit Custom (1) 105,000SR
M & O for Ford Transit Custom 3,500SR/year
Ice cream machine 25,000 SR
M & O for Ice cream machine 300SR/year
Preparing the truck 23,000SR
Utility (Electricity and Water) 1,500SR/year
Salary of Worker 18000/year

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 Ice Cream Truck Project

Table 5: Variable costs table

Ice cream mix [2] 0.5SR/unit

Ice cream cone [2] 0.4SR/unit

Cash flow diagram

242,477SR

189,000SR

151,200SR

113,400SR

75,600SR

0 1 2 3 4 5

A= -23,300SR

-128,000SR
Figure 1: Cash flow dighram

Conclusion:

At the end of the project, we think this project is financially viable. In

addition, we have learned many skills such as how we can study a small business. It
helps us a lot in the future to make one or more businesses. The Excel cheat that we
used is good enough to run a small project like this project (ice cream truck).

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 Ice Cream Truck Project

References:

[1]:https://ar.aljazirahford.com/Product/1632?typeId=7

[2]:https://haraj.com.sa/1135044680/**42125745**42763639**25886061**3553873
4**42335847**42321551**41004936**42629851**34315052**35044680**356306
62**34982099**39762769**42294328**31639168**42132464**40661115

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 Ice Cream Truck Project

Appendix A (Meeting Agenda):

Meeting No.1 Date: 3/04/2019

AGENDA FOR MEETING # 1

Meeting Time: 3:00 PM.

Meeting Place: In Class 108 at the College of Engineering Building 40.
.Meeting Date: 4/04/2019 (Wednesday)

Table 6: Attendees

Member Member Name Present

No.
1 Ibrahim Kensarah Present

2 Khalid Abdulmajeed Present

3 Moath Basuhail Present

4 Omar Al-Sharef Present

Table7 : The work of the meeting

S/No Description Member Resources/Comments Estimated

of Task responsible Time

1 Read the Everyone Each member read about 28 min

required requirements project. And
content. understand each point of
requirements.
2 Project Everyone Discussion about the project and 22 min
Selection. choose a good example for it.
3 Distribute Everyone we distribute the work on each 9 min
work. member.

Results:

 Each member understood each point in the project.

 The tasks were distributed. Every member knows what he has to do.
 Next meeting will be on 4/04/2019.

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 Ice Cream Truck Project

Appendix B (Excel sheet):