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Figure 2.30
Hitachi processor module. Module is 10.6 ´ 10.6cm, water cooled, and
has up to 41 ECL chips. Photo courtesy of Hitachi Corp. [168]. |
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unimportant. We can assume that the project is for the development of a network file or compute server for some unspecified environment. |
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Any project begins with a project plan. This plan has several aspects: |
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1. The technical specifications. These include a complete set of functional specifications that are to be met by the proposed system, together with an estimate of the expected performance and the component count/ultimate manufacturing costs. |
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2. Market analysis. This analysis is a study of the users' other suppliers (the competition) in the marketplace; what user needs are, what solutions are currently (or are expected to be) available, together with prices and the expected lifetime of the program. |
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We assume that the project plan has led us to believe that the proposed product could be sold for an average of $10,000 per unit, achieving sales of 10,000 units over a six- or seven-year period. We further assume that the ultimate cost to manufacture the processor is $1,000 (materials plus labor). As a profit margin, the ratio of selling price to marginal cost for production of 10:1 may seem generous, indeed, guaranteed to produce an enormous profit. However, as we shall see, a gross profit margin of even 10:1 may be insufficient to produce any profit at all, depending on the number of units sold and the size of the fixed-cost investment in product development. |
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The project may be broken up into time phases. |
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