STEM help / Training / Two-hour tutorial demo

Exercise 17: How space is priced

Watch the video presentation and/or read the full text below

Overheads are just another kind of resource, and the assumption we are given for space is that the cost per (one) sq m amounts to USD100 per month. There are two differences with how the previous resources were calibrated:

  1. Create a new resource, and name it Space.
  2. Open the Capacity and Lifetime dialog, and then enter the Capacity Unit and Capacity inputs as shown below.
  3. The Physical Lifetime can be ignored as we are not considering any one-off costs.
  4. Open the Costs dialog, and enter Rental Cost = 100.0 (under Leased Facilities).
  5. This USD 100 is stated as a monthly cost, so we must set Cost Period = Month (under Units) instead of the default Year. (Maintenance costs for the previous resources were defined as 5% per annum.)

Figure 39: The unit capacity for pricing, and the corresponding unit cost per month, for resource Space

For simplicity, we will assume that we are charged only for the space we use at each site, and that the operator will round-up the total bill to a whole number of square metres.

The alternatives below are beyond the scope of this tutorial.

If the space should be charged in whole sq m at each site, then the resource of the sq m ‘cannot be shared’. A location link should be added, as we have done before.

Alternatively, if there should be no rounding at all (e.g., an efficiently priced internal cross-charge), then use the Usage Cost attribute instead, as this is charged in proportion to used capacity, rather than the installed capacity which determines the Rental Cost.

Things that you should have seen and understood

Leased Facilities: Rental Cost, Usage Cost; Units: Cost Period
Costs charged in proportion to installed capacity or used capacity

 

© Implied Logic Limited