Training ROI Calculator

BASELINE ASSUMPTIONS Units TRAINING INVESTMENT

Annual Production Volume Required Lb 10,000,000 Length of training program Hrs/Course 15
Length of a production shift Hrs 8 Trainer Cost $/Trainer 1,500
Output per production shift @ standard Lb 10,000 T&E $ 850
Total cost per unit of production @ standard $/Lb 0.50 Participant hourly labor rate $/Hr 45
Total cost of one shift of production @ standard $/Shift 5,000 Number of participants #/Course 10
Participant cost $ 6,750
EFFICIENCY CALCULATION Overtime participant coverage cost @ 1.5 rate $ 10,125
Unplanned Equipment Downtime % 6.0% Documentation $ 1,500
Rejected / defective product % 4.5% Total Training Investment $/Course 20,795
Actual vs targeted speed % 95.0%
Line Efficiency @ standard % 85.3% ROI = (Savings - Training Investment) / Training Investment 847%

PRODUCTION COSTS
Required Production Shifts per Year Shifts/Yr 1,000
Total Cost per Year $/Yr 5,000,000
Number of changeovers per week #/Wk 2
Length of each changeover Hrs/Chg 2.0
Number of people per changeover #/Chg 1.0
Annual changeover cost $/Yr 8,571
Service Calls per year #/Yr 10
Avg Total Cost per Service Call $/Call 1,500
Annual Cost of Service Calls $/Yr 15,000 Using Your COST Calculator

Total Costs 5,023,571 1) Fill in the shaded YELLOW boxes with actual data OR assumptions

SAVINGS 2) The values entered into the shaded boxes under the SAVINGS heading should be
Unplanned Equipment Downtime - AFTER training % 4.0% better' than those entered above or you MAY see a NEGATIVE ROI
Rejected / defective product - AFTER training % 4.0%
Actual vs targeted speed - AFTER training % 96.0% 3) The calculated values (NO yellow shading) change automatically,
Line Efficiency AFTER training % 88.5% including the final ROI
Change in Efficiency % 3.5%
Output per shift AFTER training Lbs/Shift 10,374 4) Do NOT enter data into any cells other than those with YELLOW shading
Required Production Shifts per Year AFTER training #/Yr 964
Total Cost per Year $/Yr 4,819,602
Production Savings $/Yr 180,398

Number of changeovers per week AFTER training #/Wk 2.0

Length of each changeover AFTER training Hrs/Chg 1.0
Number of people per changeover #/Chg 1.0
Annual changeover cost $/Yr 4,131
Changeover savings $/Yr 4,440 Prepared by Dan Pettit for Partners in Possibilites, Inc.
If you need additional information about this contact Nancy Cobb at cobbnb@comcast.net
Service Calls per year AFTER training #/Yr 2
Annual Cost of Service Calls $/Yr 3,000
Service Call Savings $/Yr 12,000

Total Savings $/Yr 196,839

 Year
0 1 2 3 4 5 6 7 8 9 10
Production Cost Before -2,000,000 -2,080,000 -2,163,200 -2,249,728 -2,339,717 -2,433,306 -2,530,638 -2,631,864 -2,737,138 -2,846,624 -2,960,489
Production Cost After -2,000,000 -1,883,161 -1,958,488 -2,036,827 -2,118,300 -2,203,032 -2,291,154 -2,382,800 -2,478,112 -2,577,236 -2,680,326
Change in Cash Flow 0 196,839 204,712 212,901 221,417 230,274 239,484 249,064 259,026 269,387 280,163

Investments
Capital -1,000,000
Training -20,795

Net Annual Cash Flow -1,020,795 196,839 204,712 212,901 221,417 230,274 239,484 249,064 259,026 269,387 280,163 236,327
Sum Cash Flows -1,020,795 -823,956 -619,244 -406,343 -184,926 45,347 284,832 533,896 792,922 1,062,310 1,342,473

Discount Rate 8%
NPV $487,188
IRR 18%
Payback 4.32