Galorath ROI Calculator

COMPUTERIZED RETURN ON INVESTMENT ANALYSIS

EXECUTIVE SUMMARY

This software based “Return On Investment (ROI)” analysis program is intended for businesses that in need for computer based forecasting investment tools. This analysis system can be used for analyzing organization’s cost and benefit forecasting values in a sense of investment opportunities. This project is being developed by Binghamton University senior students for almost four year, and it’s supervised by Galorath organization’s one of the IT Professionals Lee Fischman. This year, project actually has the potential for being sell in the software market, which is the biggest step of this on-going student based software development process. Organizations, by using this software based analysis solution, can achieve efficiency reports on their planned investments, and compare efficiency levels of other investment plans. This software will give the organization the perspective of cost and benefit values in a user interactive point, and break even points of an investments will be much easier to understand and analyze.

WHAT IS RETURN ON INVESTMENT?

“Return On Investment” is an analysis type that is being done, when the organizations plan new investments to their existing resources. Purpose of computerized ROI systems are measuring net gained return values from the market, analyzing the demand values on the market, and create what-if analysis to be ready for every aspect of the business. Most of the organizations need their ROI analysis when they plan to acquire another company, or create another start up for their organization. Acquiring can be a vertical integration which is based on holding all of the level of supply chain of the production for their business needs. Nowadays, most of the companies does not vertical integrate their supply chains but everyday deficiencies on that type of model increases because of the labor right management errors in the far east countries such as China, Taiwan. Thus, these problems force organizations bring back the production and hold all the aspects of supply chain within their organizations. To do that, they have to analyze the investment values, and strategically plan their forecasted benefits and costs. Furthermore, organizations need to use the historical data that they hold on their data warehouses. It can be understood that, this kind strategically decisions can’t be leaved to basic business analysts. There is a need for computerized business intelligence and our ROI software provides this needed segment for organizations.

CONCEPT OF THE SOFTWARE SYSTEM

To achieve what the organization need there is a need for strong training bases. Training base for our software is pure values that are gathered from our data grid in the Graphical User Interface. Our software development had to utilize these values to get the best out of these base values. Basic return on investment analysis consists of three values. These are segmented as least, likely and most. These value segments represent organizations forecast about the assigned item for that year, or the following years that follow. Using three dimensional data is not and should not enough for making important strategic decisions for any organization. Therefore, our software solution does not only use those there values. Our software gathers those values, and by using Monte Carlo simulation algorithm it creates thousands of sample values. What is Monte Carlo simulation? : Monte Carlo simulation is a computerized mathematical technique that allows people to account for risk in quantitative analysis and decision making. This simulation performs analysis by building models of possible results by substituting range of values for any factor that has inherent uncertainty, in our case, least, likely and most values. It then calculates results over and over, each time using different set of random values from the probability functions. Using probability distributions, variables can have different probabilities of different outcomes. This gives organization number of different perspectives of those three dimensional cost and benefit values. While the simulation algorithm works in our self-designed software, values are sampled at random form the input probability distribution values which are provided by the user of our software on the analysis page of our graphical user interface. We use this simulation algorithm to furnish the decision maker with a range of possible outcomes and the probabilities they will occur for any choice of actions. It shows us the extreme levels of possible benefit and cost values within least, likely and most dimensions. After calculating the likely outcome values of the investment we provide user with a set of charts and graphics. More information about this is not the next segment “Used Libraries and Technologies”

USED LIBRARIES AND TECHNOLOGIES

For software development process itself, and the software itself we used couple of outsourced technologies. Since our software is a Windows based application, we used the programming language of C#. While doing this we used the Microsoft Visual Studio. Our team is supervised by Mr. Fischman, and the only way to communicate with him is through the web services. WebEx is the communication tool, our team used while discussing improvements, deficiencies and changes during the software development process. For the software itself, to show Monte Carlo simulated values to the user in much more intuitive way, we used the open sourced library of ZedGraph. Our project uses three different graphs. ZedGraph is a GNU licensed SDK for .NET framework and provided lots of opportunities which made our product much more user friendly. Here are the some examples of those graphical instances:

DESIGN OF THE SOFTWARE

Our software design consists of number of C# library classes and ZedGraph library. Our software first gathers data from the organization’s user from its Data Grid in three dimensions: least, likely and most. These values are being computed in the Monte Carlo algorithm processes. Also these processes get input values from the Analysis segment of the program, which helps user to determine sampling values. The last point of project is showing graphs to the user, and letting him/her to get this report as a PDF file, XML or as an Microsoft Excel file.

IMPROVEMENTS

The Data Grid improvements are the most essential one. Since our whole software design depends on the values gathered from the data grid, any defects on those values would cause our program to crash or more badly, give wrong calculated errors. Now, our data grid works in a fashion of flawless. It controls every possibility of input from the perspective of user. Second to the Data Grid, there was no way of adding “Items” to invest in our program. We achieved our goal of adding multiple items, copying those items and pasting those values from other ROI projects. Our graphical user interface is the face of our software and the face of our project in general. What was missing on that face were sense organs. There were no menu items before. We improved the navigation bar and now, it is fully functional.

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