All seven sections and speaker notes follow in one document. The selector jumps to a section; edits still update every result.
01 / A BOARD DECISION
Launch a premium desk kit for hybrid-work teams. Compare a national rollout, a staged pilot and deferral before releasing capital.
Explore how a profitable base case can still fail a downside-loss limit.
proposed base-case funding
- Base operating result
- 60%-volume stress result
Synthetic annual case. Release is conditional on demand, supplier quotes and a cash-flow review. Funding and profit measure different things.
02 / THE FULL-LAUNCH ECONOMICS
Profit is not funding.
Base funding includes unit costs and fixed costs paid before receipts. Made-to-order output matches sales; taxes, financing and inventory losses are excluded.
03 / WHY STAGE THE COMMITMENT?
A smaller commitment
changes the downside.
Both gates must pass: a positive base result and a stress loss no worse than $200,000. Stress sales are 60% of base volume; no probability is attached.
If both pass, the illustrative policy prefers full launch. This preference does not maximize the displayed financial metrics. Pilot sales are 30% of full demand with 25% of fixed cost; this is a smaller one-period launch, not a valuation of learning.
| Option | Base | Stress | Funding | Gates |
|---|
04 / LIVE IN THE ROOM
What would change
the recommendation?
- Full-launch base result
- Full-launch stress result
- Pilot base result
- Pilot stress result
Pilot sales are 30% of full demand and fixed cost is 25%. Stress is 60% of each option’s volume. These scaling and governance assumptions stay fixed.
05 / FIND THE POINT OF FAILURE
Demand is the assumption
to prove first.
Exact sensitivity values
| Full-market kits | Full launch | Pilot |
|---|
These volumes are scenarios, not a forecast or confidence interval. Pilot volume rounds down to whole kits.
06 / TURN THE RECOMMENDATION INTO A DECISION
Approve conditions
before releasing funds.
- Commercial lead: validate signed demand at the quoted price and test a 40% volume shortfall.
- Operations lead: confirm unit quotes and that a pilot can incur only 25% of full fixed cost.
- Finance lead: approve the loss limit and replace the funding estimate with a timed cash-flow plan.
This arithmetic compares one-period launches; it does not value information or a second-stage rollout. What will the pilot reveal, and how would that evidence change the later decision? Update demand and costs before a separate scale decision. The model gives a conditional policy result, not an approval.
Inspect the policy recommendation
A / MODEL APPENDIX
A small model.
Explicit boundaries.
Equations and units
All money is stored in integer cents; displayed totals use whole dollars unless cents matter.
- Operating result
- sales × (price − unit cost) − fixed cost
- Whole-kit break-even
- ceil(fixed cost ÷ unit contribution), when contribution is positive
- Base funding
- base sales × unit cost + fixed cost
Options and policy
Pilot sales = floor(30% × full sales). Pilot fixed cost = 25% of full fixed cost, rounded to cents. Stress sales = floor(60% × each option’s base sales).
Pass requires base profit > $0 and stress profit ≥ −$200,000. Prefer full launch if both pass; otherwise choose pilot if it passes, or defer. Deferral has $0 launch profit and funding.
These thresholds and scale assumptions are illustrative governance choices, not estimates from evidence.
Assumptions, exclusions and provenance
Made-to-order output matches sales; unit costs stay constant at all volumes. Funding assumes all base unit and fixed costs are paid before customer receipts. No inventory write-offs, taxes, financing, timing, cannibalization or price–demand response. The pilot comparison does not value learning or model a second-stage rollout. A stress case is neither a confidence interval nor a worst-case guarantee.
Every number is synthetic. The original brief and actual simulated planning record are linked in How this was built. The later revision restores the requested board-level scope.