... c. Breakeven point=(10,000+8,000)/(30-24) =3,000 batteries d. Breakeven point=(9,000+7,900)/(33-20) =1,300 batteries 7. Sensitivity analysis is a “what-if” technique managers use to examine how an outcome will change if the original predicted data are not achieved or if an underlying assumption changes. The analysis answers questions such as “What will operating income be if the quantity of units sold decreases by 5% from the original prediction?” and “What will operating income be if variable cost per unit increases by 10%?” This helps visualize the possible outcomes that might occur before the company commits to funding a project. For example, companies such as Boeing and Airbus use CVP analysis to evaluate how many airplanes they need to sell in order to recover the multibillion-dollar costs of designing and developing new ones. The managers then do a sensitivity analysis to test how sensitive their conclusions are to different assumptions, such as the size of the market for the airplane, its selling price, and the market share they think it can capture. Electronic spreadsheets, such as Excel, enable managers to systematically and efficiently conduct CVP-based sensitivity analyses and to examine the effect and interaction of changes in selling price, variable cost per unit, and fixed costs on target operating income. Sensitivity analysis gives managers a good feel for a decision’s risks. It is a simple approach to recognizing uncertainty, which is the possibility that...
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...Sensitivity analysis We conducted two types of sensitivity analysis. 1. Screen Upper Bound In order to figure out how much the result will be affected when the upper bound for the number of screens is modified, we ran solver table on constraint #3, which is the upper bound for the number of screens. The input cell was the maximum number of screens, and the output cells were total slack and movie schedule. We varied the maximum number from 1 to 8. According to the result from the solver table, the optimal solution turned out to be 4, showing the least slack. Currently set upper bound, 3, involved second least total slack. This meant that current distribution was not that bad considering that total slack showed only 2 in difference. As for the distribution of movies to each screen, the current one was very similar to that of optimal solution. In screen 3 and 4, they differed just in order, and in screen 6, current distribution had one less movie. 2. Total Expected Demand We assumed certain amount of demand, but that assumption can vary according to unexpected situation. Therefore we conducted the second sensitivity analysis on total expected demand. Setting current demand as 100%, we varied the amount from 50%, which is half the current amount, to 300%, which is 3 times the current amount, with the increment of 10%. In solver table, the input cell was the total expected demand and the output cells were movie distribution and total slack. We ran the solver table and the...
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...will have spent the money for travel and preparation needlessly. Should the family spend the extra money to rent the shelter, even though it may not be needed? Sensitivity Analysis In the Smith reunion scenario, the dependent variable is the rented of the pavilion while the independent variable is the weather conditions. Sensitivity analysis is a technique that determines how different values of an independent variable will determine a particular dependent variable under a given set of assumptions (Pannell, 1997). One of the uses for sensitivity analysis is assessing the “riskiness” of a strategy or scenario in order to make a decision by identifying key values. Its purpose is to minimize variable (stricture) number calibration and determine what parameters will have the greatest impact on simulation precision. One Parameter Analysis A one-way sensitivity analysis evaluates the changes the impacts the results of a situation by identifying the key drivers (Taylor, 2009). On the day of the Smith family reunion, weather conditions are the determining factors as to rent shelter for that day. This decision making progress involves identifying key values of a possible weather condition, cool or rainy, establishes thresholds or break-even values of optimal strategy changes. The reasons for conducting this analysis are to determine. Which parameter (rent or not to rent the shelter) require further testing for strengthening the knowledge base, thereby reducing...
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...business is able to meet its recurring costs and have a surplus available for reinvestment or payment as dividends to the owners. Guillermo’s case requires a critical investigation into the business operations to determine available to him. Given the current situation, Guillermo has three very viable options to consider. He could either maintain the present business model and continue operations as currently constituted, or adopt a new business model by embracing high technology and thus investing in highly automated machines similar to what the competitor is using or change his operations and instead become a broker to one of the big competitors who is looking for an entry point into the North American market. In business, a sensitivity analysis is a business interrogative technique that allows one to change certain variables affecting a business in order to determine how the business will be in the...
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...used to determine the recoverable amount (IAS 36.132(encouraged), 134(d)(i)-(v), (e)(i)-(v), 135(d)) • Key assumptions usually left out. • If discussed they were not sufficient. • Key assumptions include gross margin, government bond rates, exchange rate for the period, raw material price, inflation, market share, etc. • Comparative information is required Where goodwill or indefinite life intangibles have been allocated to a CGU (or group of CGUs), but no impairment has been recognized, reasonably possible changes in assumptions if such changes would cause the unit’s carrying amount to exceed its recoverable amount (IAS 36.134(f), IAS 36.135(e)) • Sensitivity Analysis is not provided. • If provided, it is not consistent. • If book value increases, investors would expect a clear sensitivity analysis. • sensitivity analysis should incorporate all key assumptions (beyond discount rate and growth rate) . Description of the entity’s CGU when it recognises or reverses an impairment loss for the CGU during the period (IAS 36.130(d)(i)) • Disclosures did not provide description. • If they did, they lacked substance. • Users did not have an idea of the impact of the impairment on the financial activities. Explanation of the events and circumstances that contributed to the impairment loss or reversal (IAS 36.130(a)) • Disclosures were too broad and • Did not provide causes of the events and circumstances that led to impairment. • Revised by IASB on March 31, 2004. • Goodwill...
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...CALCULATIONS OF NPV AND SENSITIVITY ANALYSIS NPV calculation using 13% as the cost of capital FOR PROJECT A Cash Flows DCF (13%) PV 350,000 0.8850 309,750 350,000 0.7831 274,085 350,000 0.6931 242,585 826,420 NPV = 826,420 – 735,000 NPV = 91,420 FOR PROJECT B Cash Flows DCF (13%) PV 300,000 0.8850 265,500 300,000 0.7831 234,930 300,000 0.6931 207,930 708,360 NPV = 708,360 – 690,000 NPV = 18,360 FOR PROJECT C Cash Flows DCF (13%) PV 200,000 0.8850 177,000 200,000 0.7831 156,620 200,000 0.6931 138,620 472,240 NPV = 472,240 – 600,000 NPV = (127,760) Assuming the cost of capital increase to 15%, the new NPV will be as follows FOR PROJECT A Cash Flows DCF (15%) PV 350,000 0.8696 304,360 350,000 0.7561 264,635 350,000 0.6575 230,125 799,120 NPV = 799,120 – 735,000 NPV = 64,120 FOR PROJECT B Cash Flows DCF (15%) PV 300,000 0.8696 260,880 300,000 0.7561 226,830 300,000 0.6575 197,250 684,960 NPV = 684,960 – 690,000 NPV = (5,040) FOR PROJECT C Cash Flows DCF (15%) PV 200,000 0.8696 173,920 200,000 0.7561 151,220 200,000 0.6575 131,500 456,640 NPV = 456,640 – 600,000 NPV = (143,360) At this point it is necessary for one to determine the sensitivity of the change in NPV of the three projects due to the increase in cost of capital. SUMMARY OF NPVS’ CALCULATIONS PROJECT | NPV @ 13% | NPV @ 15% | % CHANGE IN NPV | A | 91,420 | 64,120 | * 29.86% | B | 18,360 | (5,040) | * 127.45% | C | (127...
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...Sensitivity ANALYSIS Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or system (numerical or otherwise) can be apportioned to different sources of uncertainty in its inputs.[1] A related practice is uncertainty analysis, which has a greater focus on uncertainty quantification and propagation of uncertainty, but gives no distinction given to different sources of uncertainty. Ideally, uncertainty and sensitivity analysis should be run in tandem. Sensitivity analysis can be useful for a range of purposes,[2] including: * Testing the robustness of the results of a model or system in the presence of uncertainty. * Increased understanding of the relationships between input and output variables in a system or model. * Uncertainty reduction: identifying model inputs that cause significant uncertainty in the output and should therefore be the focus of attention if the robustness is to be increased (perhaps by further research). * Searching for errors in the model (by encountering unexpected relationships between inputs and outputs). * Model simplification - fixing model inputs that have no effect on the output, or identifying and removing redundant parts of the model structure. * Enhancing communication from modelers to decision makers (e.g. by making recommendations more credible, understandable, compelling or persuasive). * Finding regions in the space of input factors for which the model output is either maximum...
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...Sensitivity Analysis Sherri Fergusson HCS/405 December 22, 2014 Terri Andrews Sensitivity Analysis Many organizations have data analysis to review the financial statements, annual report, and budget issue documents; The Patton-Fuller Community Hospital is no different. In this analysis we will look over and address all of the areas that affect staffing at Patton-Fuller. These areas will vary between the numbers of nurses to the number of patients as well as staff compensation from wages to raises. A comparison of two years’ worth of data while also using Trend Analysis will explain future budgeting aspects and the pros and cons to these decisions. Comparative data is an important tool for managers to use when analyzing data with consistency, verification, and unit measures to fully meet the requirements of understanding the reporting financial results (Baker, PhD, CPA & Baker, JD, 2011, "Chapter 14/Using Comparative Data"). Using Patton-Fuller’s 2008-2009 financial statements to provide a comparative analysis for their expenses that occurred within a 2 year period. Patton-Fuller’s balance sheet provides comparative analysis that total current assets of 130,026 in 2008, and other assets in 2009 of 128,867 decreased to a negative difference of (1159.00). Liabilities reported a gain in 2009 of 462,153 from 2008 213,450 a growth percentage of 46.19 gain. However, factoring the equity of 335,035 in 2008 to 125,564 in 2009 a percentage of 62.52 gain, the total liabilities...
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...office • space, 958 sqm of retail area, and 192 sqm of storage. • Parking space with a ratio of 1/45. • Highly accessible: 6 bus and 3 tram lines; 500 meters to train station and 5 minute drive to metro stations. The Cirrus building typical floor plan The Cirrus building excusive interior The current tenants Sensitivity analysis of the financial implication Proposed purchase price: 32.1355 Million Euro (June 30 2014) Payments vs. time 1,600,000 1,400,000 1,200,000 1,000,000 800,000 total payment 600,000 Interest 400,000 200,000 0 Remaining principal vs. time 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Remaining principal Sensitivity analysis of the financial implication Property future price at 2021 vs. YTM 60,000,000 50,000,000 48,199,892 40,425,716 Property price 40,000,000 34,811,033 30,000,000 property future price 20,000,000 10,000,000 0 6.5% 7.75% YTM[%] 9.0% Sensitivity analysis of the financial implication IRR vs. YTM 25% 20% 20% 17% 14% IRR[%] 15% 10% 5% 0% 6.50% 7.75% YTM [%] 9.00% Sensitivity analysis of the financial implication Property future revenue at 2021 vs. YTM 16,000,000 15,097,433 14,000,000 Property price 12,000,000 10,000,000 7,323,256 8,000,000 6,000,000 4,000,000 1,708,574 2,000,000 0 6.5% 7.75% 9.0% YTM[%] The value of capital+ loan at the point of selling will be...
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...Stimulation Review Based in New York, Elijah Heart Center (EHC) is a 140-bed cardiac hospital. Although EHC is a much needed entity in New York, profitability is dropping. As mentioned, EHC is facing a potential shortfall in capital due to managed care discounts, contract nursing at higher pay rates, and low Medicare reimbursements. As part of a consulting firm, who deals with these trending issues every day, I will be summarizing what my recommendations are to bring Elijah Heart Center back to a profitable status. Outlined below will be my recommendations for improvement without compromising patient quality. Recommendation for Cash Flow In order to increase cash flow, one must look at the whole picture. Since $900,000 is the savings target for the first year, we are using this figure to base our recommendations. First we must look at contract labor. In most cases, the contract labor or agency labor, are being paid at a higher rate than most of EHC employees would normally make for the same position. Most are doubled in salary. I believe this would also increase morale as sometimes, employees feel a bit of jealousy as these individuals are doing the same job they are performing and are being paid more for the same work. Therefore, my first recommendation has to do with agency labor. I recommend EHC eliminate or reduce agency labor (University of Phoenix, 2011). Next, I believe if we reduce the benefits packages we are now offering by streamlining these packages,...
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...DRA Assignment 2 – Recreational Properties 1) FRAMING THE DECISION 1.a) Decisions a) He can exercise the option and buy the land. In this case, the possible decisions are: a.1) Sell the land without any development a.2) Develop the land with a development cost of £ 5 million and the sell it for a higher profit b) He can avoid to exercise the option and invest in another investment that will give to him a certain profit. c) Try to negotiate an option extension in order to be able to delay his decisions until the suit is settled and the risk of not getting the lease does not affect his decision anymore. d) For the purpose of this analysis we are assuming that the price of the option will remain constant. Otherwise another possible decision that Anders may make is whether to sell the option to third parties and eventually recover part of his investments. 1.b) Factors of uncertainty a) Legal suit outcome: the payoff of his decision is subject to the outcome of the lawsuit that may not allow the development of land parcels on East side of White Mountain. b) Reputation: the success of his initiative and the consequent return on his investment are conditioned by the popularity that the location will have, as for instance the quality of the snow and of the ski runs. Due to their nature, these are unpredictable factors that Anders cannot control. 1.c) Objective The objective of Recreational Properties is to maximise the payoff coming from this investment as well as minimising...
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...- The goal of Quality Control is to reduce both systematic and random errors. - In Japan, they refer to it as ZERO DEFECT Importance of QC in patient care -It serves as a foundation for a comprehensive program of assuring HIGH-QUALITY PATIENT CARE. -The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) defines Quality Control as a well-defined, organized program designed to enhance patient care through the ongoing objective assessment of important aspects of patient care and the correction of identified problems. Quality Assurance Program A. Pre-analytic al phase Test ordering, specimen collection, specimen transport and processing, patient information system. B. Analytical phase Specimen analysis, use of controls, record keeping C. Post-analytical phase Reporting of results, physician contact, reference ranges Variability (errors) - RANDOM ERRORS – indeterminate errors which are a result of chance and sampling errors. They do not generally affect an entire batch of samples and therefore cannot be detected by testing control samples. They include personal or operator errors. - SYSTEMATIC ERRORS – determinate errors and sometimes referred to as BIAS. It affect all determinations in a batch equally and usually can be detected by testing control specimens. These errors are attributable to causes other than chance. It may include deteriorating reagents and improperly calibrated instruments....
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...Analysis of Current Pancreatic Cancer Screening Methods & Future Recommendations ABSTRACT PAGE Objective Background Results Conclusion (1) what the objectives of the study were; :) (2) how the study was done; --- (3) what results were obtained; (4) and the significance of the results. Treatment for pancreatic cancer is often no longer viable (practical) by the time the condition can be diagnosed. This is due to the lack of effective screening methods to detect the tumor or cyst in its earliest curable stages. The ability to successfully detect pancreatic cancer is highly dependent on an effective screening method with high sensitivity and specificity that can detect the tumor or cyst early in its development. In the United States, many of the current methods are too costly, too invasive, unavailable for widespread use, and lack high sensitivity and specificity. There is a strong need to find a more promising screening method that is inexpensive, noninvasive, available for widespread use, and maintains high sensitivity and specificity. The immediate objective of this research project was to evaluate the current screening methods and make a recommendation for a future screening strategy with strong potential to detect the cancer in its earliest stages while improving the sensitivity and maintaining high specificity. The first step in the investigation process was to identify a high-risk population for pancreatic cancer. Then, current screening methods were...
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...cancer that is detected early — when it's still confined to the prostate gland — has a better chance of successful treatment. One of the biggest and prevalent issues with prostate cancer is the rates of sensitivity and specificity. Sensitivity and specificity measure the number of false positives and false negatives, and are useful in evaluating the effectiveness of screening methods. Sensitivity is the number of true positive results divided by the sum of the true positive results and false negative results. Specificity is the number of true negative results divided by the sum of the true negative results and false positive results. The article explains that the PSA test and Digital Rectal Examination (DRE) are the most widely used forms of prostate cancer screening. The PSA test is simply a blood test. Even though the PSA is widely available to the general population it’s the sensitivity is 34.9% and the specificity is 63.1% which is not good at all. The DRE test is available by appointment in a doctor's office; there is discomfort for the patient and a risk of slight bleeding. The sensitivity is 27.1% and the specificity is 49.0%, which is worse than the PSA test. To help ensure that the readings will be more reliable most doctors use the two tests together, the sensitivity remains low at 38.0%, and the specificity is 87.9%. Next the article talk about future tests and...
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...PERCENTAGES: THE MOST USEFUL STATISTICS EVER INVENTED Thomas R. Knapp © 2010 "Eighty percent of success is showing up." - Woody Allen “Baseball is ninety percent mental and the other half is physical.” - Yogi Berra "Genius is one percent inspiration and ninety-nine percent perspiration." - Thomas Edison Preface You know what a percentage is. 2 out of 4 is 50%. 3 is 25% of 12. Etc. But do you know enough about percentages? Is a percentage the same thing as a fraction or a proportion? Should we take the difference between two percentages or their ratio? If their ratio, which percentage goes in the numerator and which goes in the denominator? Does it matter? What do we mean by something being statistically significant at the 5% level? What is a 95% confidence interval? Those questions, and much more, are what this book is all about. In his fine article regarding nominal and ordinal bivariate statistics, Buchanan (1974) provided several criteria for a good statistic, and concluded: “The percentage is the most useful statistic ever invented…” (p. 629). I agree, and thus my choice for the title of this book. In the ten chapters that follow, I hope to convince you of the defensibility of that claim. The first chapter is on basic concepts (what a percentage is, how it differs from a fraction and a proportion, what sorts of percentage calculations are useful in statistics...
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