perfume final presentation
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Perfume EngineeringPerfume EngineeringPure AmbitionPure AmbitionPure AmbitionPure AmbitionPure AmbitionPure AmbitionPure AmbitionPure Ambition
Clare HoangClare Hoang
Cicely WilliamsCicely Williams
Kyla PattersonKyla Patterson
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OverviewOverview
1.1. ObjectiveObjective
2.2. BackgroundBackground
4.4. MarketingMarketing
5.5. Happiness FunctionHappiness Function
6.6. ResultsResults
7.7. Economic AnalysisEconomic Analysis
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ObjectiveObjective
The objective of our project is toThe objective of our project is toengineer a new scent of perfumeengineer a new scent of perfume
over a 10 year life span. Inover a 10 year life span. In
addition to this, marketing of theaddition to this, marketing of the
product and economic analysisproduct and economic analysis
must also be taken into account.must also be taken into account.
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BackgroundBackground
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Functions of a PerfumeFunctions of a Perfume
FunctionsFunctions Provide a pleasant odorProvide a pleasant odor
Cover base smell ofCover base smell of
productproduct
Give product identityGive product identity
Signify product changeSignify product change
ExamplesExamples Air freshenersAir fresheners
Soaps or lotionsSoaps or lotions
Banana Boat sunscreenBanana Boat sunscreen
New and Improved!New and Improved!
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Perfume ConstructionPerfume ConstructionMaking a scentMaking a scentAttributesAttributes
ScentScent IngredientsIngredients
ColorColorAestheticsAesthetics
Oiliness of fluidOiliness of fluidConcentration of Essential OilsConcentration of Essential Oils
Initial strength of fragranceInitial strength of fragrance -- ConcentrationConcentration
EnduranceEndurance --TimeTime*These attributes*These attributesrole in the happiness function willrole in the happiness function will
be discussed in later slidesbe discussed in later slides..
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Parts of a PerfumeParts of a Perfume
There are three main parts of a perfume:There are three main parts of a perfume:
BasicsBasics
the basics are the materials in the essential oilthe basics are the materials in the essential oil
that are present at higher percentagesthat are present at higher percentagesDiluentDiluent
ingredients in the perfume that dilutes theingredients in the perfume that dilutes the
mixturemixtureSolventSolvent
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EmulsionEmulsion
Due to the solubility of the essential oils inDue to the solubility of the essential oils in
water, perfume is an emulsionwater, perfume is an emulsion Range from < 1Range from < 1 ppmppm to 20,000to 20,000 ppmppm
Not a significant amountNot a significant amount
Oil and aqueous phaseOil and aqueous phase Continuous phaseContinuous phase
Dispersed phaseDispersed phase
A stable emulsionA stable emulsionis necessary
http://www.lesestein.de/bildarchiv-vorschau/wissenschaft.htm
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VocabularyVocabulary Top noteTop notecomponent of a fragrance with highcomponent of a fragrance with high
evaporation rateevaporation rate Middle noteMiddle notecomponent of a fragrance withcomponent of a fragrance with
medium evaporation ratemedium evaporation rate
Base noteBase notecomponent of a fragrance with lowcomponent of a fragrance with lowevaporation rateevaporation rate
Odor thresholdOdor thresholdminimum concentration in airminimum concentration in air
at which an odor is detectable by the human noseat which an odor is detectable by the human nose
Odor valueOdor valuethe concentration in air of an odorthe concentration in air of an odor
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Scent Pyramid ExampleScent Pyramid ExampleType of scentType of scent Typical Percentage ofTypical Percentage of
(Examples)(Examples) Scent in FragranceScent in Fragrance
Lemon, LavenderLemon, Lavender 1515--25%25%
Hibiscus, RoseHibiscus, Rose 3030--40%40%
Musk, VanillaMusk, Vanilla 4545--55%55%
Top Note
Middle Note
Base Note
Mata, Vera G., Paula B. Gomes, and Alfrio E. Rodrigues. "Engineering Perfumes." AIChE
Journal 51 (2005): 2834-2852.
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Types of PerfumesTypes of Perfumes
10 to 2010 to 2080 to 9080 to 904 to 84 to 8Eau de ToiletteEau de Toilette
10 to 2010 to 2080 to 9080 to 908 to 158 to 15Eau de ParfumEau de Parfum
5 to 105 to 1090 to 9590 to 9515 to 3015 to 30ParfumParfum
WaterWaterAlcoholAlcoholOilOilRemainder (vol %)Remainder (vol %)Total (vol %)Total (vol %)TypesTypes
We chose to use Eau de ParfumWe chose to use Eau de Parfum
to reach theto reach the averageaverage marketmarket
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Plan of ActionPlan of Action Determine the components of a perfume thatDetermine the components of a perfume that
maximize the ROI and the Happinessmaximize the ROI and the Happiness To do this:To do this:
First calculate the market and the demandFirst calculate the market and the demand
Next determine the initial composition of perfumeNext determine the initial composition of perfume
Relate attributes of perfume to economics using theRelate attributes of perfume to economics using thescent concentrations as manipulated variablesscent concentrations as manipulated variables
Use Solver in Excel to optimize ROI by varyingUse Solver in Excel to optimize ROI by varyingscent concentrationsscent concentrations
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MarketingMarketing
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Target MarketTarget Market
FemaleFemale
Age 25Age 25--4040
We chose this market becauseWe chose this market because
this group is more likely tothis group is more likely to
have a stable job/income.have a stable job/income.
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Introduction LocationIntroduction Location Due to investment opportunities, Oklahoma CityDue to investment opportunities, Oklahoma City
Metropolitan Statistical Area (MSA) is our choiceMetropolitan Statistical Area (MSA) is our choice
introduction locationintroduction location
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AdvertisingAdvertisingThe intended course of action is to advertise to theThe intended course of action is to advertise to the
target market in the MSA. Therefore we havetarget market in the MSA. Therefore we havechosen to advertise in the following areas:chosen to advertise in the following areas:
Advertising
7%
86
11% 5 0% Newspapers
Television
Direct Mail
Radio
Magazines
Online
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Pricing ModelPricing Model
Budget ModelBudget Model
WhereWhere pp11 and pand p22 are ours and our competitorare ours and our competitors product pricess product prices
($/bottle)($/bottle) dd11 and dand d22 are our and our competitorare our and our competitors demand (# ofs demand (# of
bottles sold)bottles sold)
Y is total amount of sales for product ($)Y is total amount of sales for product ($)
Ydpdp =+2211
2
1
2211
d
ddpdp =
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Pricing ModelPricing Model Fixed Demand ModelFixed Demand Model
For our product, the budget model is mostFor our product, the budget model is most
appropriate. Although this may be the case,appropriate. Although this may be the case,
due to demand constraints, the fixed demanddue to demand constraints, the fixed demand
model will be implemented accordinglymodel will be implemented accordingly..
( )
= 1
1
1
1
1
1 dDdDdd =+ 21
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Determination ofDetermination of determined through several logicaldetermined through several logical
assumptionsassumptions Assume that competition is completelyAssume that competition is completely
recognized, horizontal fitrecognized, horizontal fit
Assume linear recognition fit, then plateau forAssume linear recognition fit, then plateau for
our recognitionour recognition
All of theAll of the ss are averaged over timeare averaged over time
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Graph ofGraph of DeterminationDeterminationConsumer Awareness
020000
40000
60000
80000
100000
120000
140000
0 1 2 3 4 5 6 7 8 9 10
Time (years)
Awa
reConsume
rs(peopl
Competition
Pure Ambition
Alpha
0
0.2
0.4
0.6
0.8
1
0 2 4 6 8 10 12
Time (years)
alpha
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Happiness FunctionHappiness Function
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Perfume SurveyPerfume Survey A survey was used to determine the qualities of aA survey was used to determine the qualities of a
fragrance desired by the target marketfragrance desired by the target market Given to a sample group of target market;Given to a sample group of target market;
females between the ages of 25 and 40females between the ages of 25 and 40
Asked to rate several perfumes over a period ofAsked to rate several perfumes over a period ofeight hourseight hours
Asked to define characteristics of ideal perfumeAsked to define characteristics of ideal perfume
These values were used to model theThese values were used to model the perfectperfectfragrancefragrance
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ComponentsComponentsWhat are consumers looking for in a perfume?What are consumers looking for in a perfume?
Scent (60%)Scent (60%)
Endurance (35%)Endurance (35%)
Color (3%)Color (3%)
Initial strength ofInitial strength of
fragrance (1%)fragrance (1%)
Oiliness of fluid (1%)Oiliness of fluid (1%)
H(perfume) = (0.6)yH(perfume) = (0.6)yscentscent + (0.35)y+ (0.35)yenduranceendurance++
(0.03)y(0.03)ycolorcolor+ (0.01)y+ (0.01)yviscosityviscosity+ (0.01)y+ (0.01)yinit.strengthinit.strength
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Additional VariablesAdditional Variables There were other determinants to consider in aThere were other determinants to consider in a
consumerconsumers initial purchase of a perfume thats initial purchase of a perfume thatwere not considered directly in the happinesswere not considered directly in the happiness
function. These include:function. These include:
Skin reactionSkin reactionSet as a concentration constraintSet as a concentration constraint
(Each EO cannot exceed 5 vol% of total(Each EO cannot exceed 5 vol% of total
perfume volume)perfume volume)
PricePriceDetermined with pricing modelDetermined with pricing model
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Initial ScentInitial Scent
How pleasing or displeasing the scent of theHow pleasing or displeasing the scent of the
perfume on immediate application is to theperfume on immediate application is to theconsumerconsumer
Where z = weight each scent carriesWhere z = weight each scent carriesWhere x = mole fraction for each scentWhere x = mole fraction for each scent
orientalwant
haveoriental
muskwant
havemusk
floralwant
havefloral
naturalwant
havenatural
citruswant
havecitrushrscent
x
xzx
xzx
xzx
xzx
xzy
+
+
+
+
=0
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Scent After Four HoursScent After Four Hours
The smell of the perfume after four hoursThe smell of the perfume after four hours
How pleasing or displeasing to the consumer theHow pleasing or displeasing to the consumer the
scent of the perfume is four hours after applicationscent of the perfume is four hours after application
Top note is no longer detectableTop note is no longer detectable
orientalwant
haveoriental
muskwant
havemusk
floralwant
havefloral
naturalwant
havenaturalhrscent
x
xz
x
xz
x
xz
x
xzy
+
+
+
=4
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Scent After Eight HoursScent After Eight HoursThe smell of the perfume after eight hoursThe smell of the perfume after eight hours
How pleasing or displeasing to the consumer theHow pleasing or displeasing to the consumer thescent of the perfume is eight hours after applicationscent of the perfume is eight hours after application
Top note and middle note are no longer detectableTop note and middle note are no longer detectable
orientalwant
haveoriental
muskwant
havemusk
naturalwant
havenaturalhrscent
x
xz
x
xz
x
xzy
+
+
=8
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ColorColorThe color of the packagingThe color of the packaging
How appealing the color of the perfume packaging is toHow appealing the color of the perfume packaging is to
the consumerthe consumer
For our fragrance, the happiness due to colorFor our fragrance, the happiness due to color
is assigned the number 1is assigned the number 1 The color red was chosen based on the results of theThe color red was chosen based on the results of the
survey which maximizes happiness for colorsurvey which maximizes happiness for color
)03.0(*Kwy colorcolor =
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OilinessOiliness The oiliness of the perfume was determined using theThe oiliness of the perfume was determined using the
concentration of the essential oils in the perfumeconcentration of the essential oils in the perfume
The range is determined by the concentration constraintsThe range is determined by the concentration constraintsset by the volume percentage of oil allowed in an eau deset by the volume percentage of oil allowed in an eau de
parfumparfum Volume Percent Range: 8%Volume Percent Range: 8%15% of total15% of total
( )01.010 =
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Initial StrengthInitial Strength Any unhappiness caused by the initial scent of theAny unhappiness caused by the initial scent of the
fragrance being either too strong or too weak on initialfragrance being either too strong or too weak on initialcontactcontact
Where CWhere CAA is the actual initial concentration in air, andis the actual initial concentration in air, and
CCWW is the wanted concentration in air determined byis the wanted concentration in air determined bysurvey data and comparison to competitionsurvey data and comparison to competition
)01.0(*1..
=
W
WA
strengthinitstrengthinitC
CC
wy
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EnduranceEndurance How long the smell will still be noticeable to othersHow long the smell will still be noticeable to others
after it is appliedafter it is applied
The amount of time that the perfume can still be detectedThe amount of time that the perfume can still be detectedby others in a ten centimeter radius from the personby others in a ten centimeter radius from the personwearing the perfumewearing the perfume
Thrs = odor thresholdThrs = odor threshold OV = odor valueOV = odor value
With: f = 0; if 0
)17.0(1
=
z
ti
z
tienduranceendurance ThrsOVwy
z
ti
z
ti ThrsOV
z
ti
z
ti ThrsOV
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Diffusion ModelDiffusion Model The endurance parameter in the function hasThe endurance parameter in the function has
two variables: time, distancetwo variables: time, distance A diffusion model was used to approximate theA diffusion model was used to approximate the
change in concentration of the fragrance overchange in concentration of the fragrance over
time and distancetime and distance
R
i
c
ii lnlnln +=
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Activity CoefficientsActivity Coefficients Activity coefficients were obtained using theActivity coefficients were obtained using the
UNIFAC method from The Properties ofUNIFAC method from The Properties ofLiquids and Gases by Reid, Poling, andLiquids and Gases by Reid, Poling, and
PrausnitzPrausnitz[1][1]
This method was used because it determinedThis method was used because it determined
activity coefficients due to interactions betweenactivity coefficients due to interactions between
structural groups instead of utilizingstructural groups instead of utilizingexperimental dataexperimental data
iii lnlnln +
[1] Reid, Prausnitz, Poling.[1] Reid, Prausnitz, Poling.The Properties of Gases and LiquidsThe Properties of Gases and Liquids. 4th Edition. New York City,. 4th Edition. New York City,
NY. McGrawNY. McGraw--Hill, Inc. 1987Hill, Inc. 1987
R
i
c
ii lnlnln += R
i
c
ii lnlnln +=
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Activity CoefficientsActivity Coefficients
CombinatorialCombinatorialdue to differences in sizesdue to differences in sizesand shapes of the molecules in the mixtureand shapes of the molecules in the mixture
ResidualResidualdue to energy interactions betweendue to energy interactions betweenthe different groupsthe different groups
iii iii
Ricii lnlnln +=
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Analysis in ExcelAnalysis in ExcelUsing Excel, we iterated the change in concentrationUsing Excel, we iterated the change in concentrationover time up to a distance of 1 ft and a time of 8 hoursover time up to a distance of 1 ft and a time of 8 hours
Most data was knownMost data was known
with the exception of thewith the exception of theconcentration changeconcentration changeover distanceover distance
This was calculatedThis was calculated
using a derivation ofusing a derivation ofFickFicks Second Laws Second Law
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FickFicks Second Laws Second Law
Small amount of liquid on surface with concentrationSmall amount of liquid on surface with concentrationchanging over timechanging over time
Derivation for numerical analysisDerivation for numerical analysis
Required assumptions due to lack of experimental dataRequired assumptions due to lack of experimental data Liquid and gas phases are in equilibriumLiquid and gas phases are in equilibrium
Unidirectional diffusionUnidirectional diffusion
Ideal gas law holdsIdeal gas law holds
Each component diffuses separatelyEach component diffuses separately
2
2
z
cD
t
c ii
=
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Diffusion ModelDiffusion Model A diffusion model was used to define enduranceA diffusion model was used to define endurance
in the perfumein the perfume Optimum endurance of the scent was defined byOptimum endurance of the scent was defined by
using the concentration of the fastest depletingusing the concentration of the fastest depletingbase note at time equal to eight hoursbase note at time equal to eight hours
This concentration must be equal or greater thanThis concentration must be equal or greater than
the threshold of the scent to be considered asthe threshold of the scent to be considered asenduringenduring
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Numerical AnalysisNumerical Analysis
Boundary Conditions:Boundary Conditions:
t = 0, Ct = 0, CAA (z, 0)= C(z, 0)= CAoAo for all zfor all z
z = 0, Cz = 0, CAA (0, t) = C(0, t) = CAsAs for t > 0for t > 0
z =z = , C, CAA ((, t) = C, t) = CAoAo for all tfor all t
2
,,,,, 2)(
z
cccD
t
cc ttzzttzttzzttztz
+=
+
Derivation of FickDerivation of Ficks 2s 2ndnd LawLaw
cccctt
zz
tt
z
tt
z
tt
zz
+
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Diffusion Model (cont.)Diffusion Model (cont.)
( )z
z
cc
z
cc
Dt
cc
tt
zz
tt
z
tt
z
tt
zz
tt
z
t
z
=
+
( )z
zzD
t
cctt
z
t
z
=
From Ficks 2nd Law
Expanding we get
Simplifying we get
with
[ ]ttzz
tt
z
tt
zz
tt
z
t
z cccz
tDcc
+
+
+= 2
2
[ ]ttzz
tt
zz
t
z ccc
+ +=
2
1tDz = 2
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Analysis in Excel ContAnalysis in Excel Contdd
zc /With these
values, we can
find the
concentrationat any time
and at any
position
t
zc|
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Concentration ProfilesConcentration ProfilesConcentration profiles were developed by plottingConcentration profiles were developed by plotting
concentration versus time at distance zconcentration versus time at distance z
Concentration vs. z-distance
Sandalwood (Linalool)
0
0.0002
0.0004
0.0006
0.0008
0.001
0.0012
0.0014
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35
z - distance (m)
Conc(mol/m
3).
t=1 hr t=2 hr t=3 hr t=4 hr t=5 hr t=6 hr t=7 hr t=8 hr
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Concentration vs. TimeConcentration vs. Time
Concentration vs. Time
z-distance = 0.1 m
-0.0001
0.0001
0.0003
0.0005
0.0007
0.0009
0 2 4 6 8 10 12 14 16 18 20
Time (hr)
Concentration
mol/m
3...
Sandalwood Musk Vanilla Amber Threshold
-0.000005
0
0.000005
0.00001
0.000015
0.00002
0 2 4 6 8 10
Time (hr)
Con
centration(mol/m3)
The fastestThe fastest
depletingdepleting
component wascomponent was
determined to bedetermined to be
Sandalwood, with aSandalwood, with a
threshold in air ofthreshold in air of
6.4 x 106.4 x 10--55
g/mg/m33
, and, andan endurance timean endurance time
of 9 hoursof 9 hours
Based on theseBased on these
values, thevalues, the
endurance of theendurance of the
perfume wasperfume was
determineddetermined
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Happiness FunctionHappiness Function
To determine the engineered variables withTo determine the engineered variables with
respect to the consumer variables from therespect to the consumer variables from the
survey, graphs of happiness versus eachsurvey, graphs of happiness versus each
consumer variable were developedconsumer variable were developed
These were then related to intermediateThese were then related to intermediate
variables which could be manipulated tovariables which could be manipulated toform the fragranceform the fragrance
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Scent GraphsScent Graphs
Happiness vs. Consumer Amount
Scent - 0 HR
0
0.2
0.4
0.6
0.8
1
1.2
0 0.2 0.4 0.6 0.8 1
Consumer Amount (Volume Fraction)
Happines
s. Citrus
NaturalFloral
Musk
Oriental
Happiness vs. Consumer Amount (Linearized)
Scent 0-HR
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Consumer Amount (Volume Fraction)
Happiness
Citrus
Natural
Floral
Musk
Oriental
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Scent GraphsScent GraphsVolume fraction vs. Mole fraction
Citrus (0-Hour)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Intermediate Variable (mole fraction)
Consumeramount
(volumefra
ction)
S G h Wi h I diS G h Wi h I di
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Scent Graph With IntermediateScent Graph With Intermediate
VariableVariable
Happiness vs. Intermediate Variable
Scent 0 HR
0
0.2
0.4
0.6
0.8
1
1.2
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Intermediate Variable (mole fraction)
Happines
s Citrus
Natural
Floral
Musk
Oriental
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Determination ofDetermination of
= Happiness of Competition / Happiness of Pure Ambition= Happiness of Competition / Happiness of Pure Ambition
0.7560.718Overall Happiness
7.66.90Overall Score
6.50.50Oiliness
8.510.0Color
6.79.9Init. Strength
8.08.0Endurance23.219.9Scent
CompetitionPure AmbitionCategories
Happiness Comparison
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Economic AnalysisEconomic Analysis
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Packaging
P-10
Process Flow DiagramProcess Flow DiagramMixer
StorageTank
DiaphragmPump
DiaphragmPump
Packaging
Based onBased on
demand modeldemand model
ProductionProduction 13300 bottles/year13300 bottles/year
1.7 oz/bottle1.7 oz/bottle
665 liters/year665 liters/year
High-Speed
HomogenizingEmulsifier
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Capital InvestmentCapital Investment
P d ti C tPr d ti n C t M ROIM ROI
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Production CostsProduction CostsMax ROIMax ROI
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Perfume ResultsPerfume Results
Formula of PerfumeFormula of Perfume MaxMax
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Formula of PerfumeFormula of Perfume -- MaxMax
Happiness ~ 80%Happiness ~ 80%
Top NoteTop Note0.500.50PeonyPeony
Top NoteTop Note2.322.32LemonLemon
Middle NoteMiddle Note0.500.50HoneysuckleHoneysuckle
Middle NoteMiddle Note0.500.50HibiscusHibiscus
Middle NoteMiddle Note0.500.50RoseRose
Base NoteBase Note1.091.09AmberAmber
Base NoteBase Note1.091.09VanillaVanilla
Base NoteBase Note3.853.85SandalwoodSandalwood
Base NoteBase Note4.654.65African MuskAfrican Musk
DiluentDiluent8.58.5DI WaterDI Water
SolventSolvent76.576.5EthanolEthanol
FunctionFunctionVolume%Volume%IngredientsIngredients
PERFUME FORMULATIONPERFUME FORMULATION
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Maximum Happiness DecisionMaximum Happiness Decision Based on project life of 10 years and MaxBased on project life of 10 years and Max
ROI @ 80% HappinessROI @ 80% Happiness Revenue:Revenue: $ 600$ 600
Total Capital Investment:Total Capital Investment: $286,000$286,000 Total Annual Production Cost:Total Annual Production Cost: $500,000$500,000
Total Profit:Total Profit: --$315,000$315,000
Return on Investment:Return on Investment: --110.43%110.43%
Formula of Perfume ~ 75%Formula of Perfume ~ 75%
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Formula of Perfume 75%Formula of Perfume 75%
HappinessHappiness
Top NoteTop Note0.260.26PeonyPeony
Top NoteTop Note2.982.98LemonLemon
Middle NoteMiddle Note0.260.26HoneysuckleHoneysuckle
Middle NoteMiddle Note0.260.26HibiscusHibiscus
Middle NoteMiddle Note0.260.26RoseRose
Base NoteBase Note1.731.73AmberAmber
Base NoteBase Note1.731.73VanillaVanilla
Base NoteBase Note6.996.99SandalwoodSandalwood
Base NoteBase Note0.540.54African MuskAfrican Musk
DiluentDiluent8.58.5DI WaterDI Water
SolventSolvent76.576.5EthanolEthanol
FunctionFunctionVolume%Volume%IngredientsIngredients
PERFUME FORMULATIONPERFUME FORMULATION
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Most Profitable DecisionMost Profitable Decision
Based on project life of 10 years and MaxBased on project life of 10 years and Max
ROI @ 75% HappinessROI @ 75% Happiness
Revenue:Revenue: $ 820,000$ 820,000
Total Capital Investment:Total Capital Investment: $255,000$255,000 Total Annual Production Cost:Total Annual Production Cost: $565,000$565,000
Net Profit:Net Profit:
$170,000$170,000
Return on Investment:Return on Investment: 56.91%56.91%
Market ScenariosMarket Scenarios
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Market ScenariosMarket Scenarios
Three economic scenarios in questionThree economic scenarios in question
High economic pricing on raw materialsHigh economic pricing on raw materialsAverage economic pricing on raw materialsAverage economic pricing on raw materials
Low economic pricing on raw materialsLow economic pricing on raw materials
A standard deviation of 20% wasA standard deviation of 20% wasassumedassumed
Raw materials contribute a largeRaw materials contribute a largepercentage of cost for calculating thepercentage of cost for calculating thetotal product costtotal product cost
ROI vs HappinessROI vs Happiness
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ROI vs. HappinessROI vs. Happiness
ROI vs. Happiness at differing economic scenariosROI vs. Happiness at differing economic scenarios
Ri k A l i f M H iRi k An l i f r M H ppin
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Risk Analysis for Max HappinessRisk Analysis for Max Happiness
Distribution for ROI (%)
Mean =-110.4282
X
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Risk Analysis for Maximum ROIRisk Analysis for Maximum ROI
Distribution for ROI (%)
Mean = 56.9146
X
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MiniMax RegretMiniMax Regret
A regret analysis wasA regret analysis wasperformed on low,performed on low,
medium, and highmedium, and highmarket values for rawmarket values for rawmaterial costmaterial cost
Based on MiniMaxBased on MiniMax
analysis F7 is theanalysis F7 is theoptimum choiceoptimum choice
Regret AnalysisRegret Analysis
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Regret AnalysisRegret Analysis
A regret analysis was performed on the perfume formulations atA regret analysis was performed on the perfume formulations atthe three economic scenariosthe three economic scenarios
TraditionalTraditional F7 OptimisticF7 Optimistic F7 PessimisticF7 PessimisticF7F7
Regret Analysis
-175
-125
-75
-25
25
Scena rio 1 Scena rio 2 Scena rio 3
Low Ma rket Average Ma rket High Ma rket
ROI
F1
F2
F3
F4
F5
F6
F7F8
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ConclusionsConclusions
Pure Ambition is profitable!Pure Ambition is profitable!
Based on the following parameters:Based on the following parameters: 75% Happiness75% Happiness
Demand = 13,300 peopleDemand = 13,300 people
Price = $60/bottlePrice = $60/bottle
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Questions?Questions?
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