caso watson trucks
TRANSCRIPT
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ModelingProcess Page1
ModelingProcess
StructuredModelingProcess(PowellandBatt,ModelingforInsight,Wiley)
1. FrametheProblem
2.
Diagramthe
Problem
3. BuildaModel
4. GenerateInsight
ModelingTools(PowellandBatt,ModelingforInsight,Wiley)
1. InfluenceDiagrams
2. SpreadsheetEngineering
a. Design
i. SketchtheSpreadsheet
ii. OrganizetheSpreadsheetintoModules
iii. StartSmall
iv.
IsolateInput
Parameters
v. DesignforUse
vi. KeepItSimple
vii. DesignforCommunication
viii. DocumentImportantDataandFormulas
b. Build
i. FollowaPlan
ii. BuildOneModuleataTime
iii. PredicttheOutcomeofeachFormula
iv. CopyandPasteFormulasCarefully
v. UseRelativeandAbsoluteAddressingtoSimplifyCopying
vi. UsetheFunctionWizardtoEnsureCorrectSyntax
vii. UseRangeNamestoMakeFormulasEasiertoRead
viii. UseDummyInputDatatoMakeErrorsStandOut
c. Test
i. MaintainaSkepticalAttitude
ii. CheckthatNumericalResultsLookPlausible
iii. CheckthatFormulasareCorrect
iv. TestModelPerformance
d. Analyze
i. BaseCaseAnalysis
ii. WhatIfAnalysis
1. DataSensitivity
2. TornadoChart
iii. BreakevenAnalysis
iv. OptimizationAnalysis
v. SimulationAnalysis
3. Parameterization
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ModelingProcess Page2
4. SensitivityAnalysis
5. StrategyAnalysis
6. IterativeModeling
Watson
Truck
Rental
(adaptedfromMoore&Weatherford2001)
Consistingof50largetrucksrentedbyindustrialcontractors,theWatsonTruckRentalCompanyisforsalefor
$1,000,000.EricWatson,theseller,wantsyoutodevelopathreeyeareconomicanalysistoassistpotentialbuyers
inevaluatingthecompany.
Watsonpayspropertytaxesof$35,000peryear,anditcosts$4800pertruckperyeartoadministerandmaintain
thefleet.Thepropertytaxesareexpectedtogrowatarateof4%peryear,andthemaintenancecostsare
expectedtogrowat7%peryear.
Truckrental
rate
is
currently
$1000
per
month
each.
At
this
rental
rate
on
average
60%
of
the
trucks
are
rented
eachmonth.Watsonbelievesthatifheloweredtherentby$100pertruckpermonth,hewouldincreasethe
averagerentalpercentagebysevenpercentagepointsandthatthisincrementwouldapplytoeachadditional
reductioninrentrateof$100(orfractionthereof).Forexample,ata$600truckrentalrate88%ofthetrucks
wouldberentedeachmonth.Whatevertruckrentalrateissetforthefirstyearwillbeincreasedby9%peryear
foryears2and3. Averagepercentoftrucksrentedinyears2and3willbethesameasdeterminedinthefirst
year,regardlessoftheincreasedrentalrateinthoseyears.
Attheendofthreeyears,Watsonassumesthebuyerwillresellthetruckbusinessforcashataprofit.Theselling
priceatthattimeisassumedtobethreetimestherevenueinyear3.Cashflowineachyearisassumedtobethe
sameasthenetincome(revenueexpenses)forthatyear. Effectsofdepreciationandotherfactorsrelatingto
incometaxes
can
be
ignored
for
this
analysis.
Cashflowinyear3includesinadditionthecashfromtheresaleofthebusiness.Overallinvestmentprofitis
definedtobetheNetPresentValueoftheannualcashflows(discountrate=10%)includingthepurchasepriceat
thebeginningofyear1(assumeotherflowsoccurattheendoftheirrespectiveyears).Assumenotrucksare
boughtorsoldduringthethreeyears.
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ModelingProcess Page3
DevelopInfluenceChartandPseudocode
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ModelOutline
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InputsandFormulas
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ModelingProcess Page6
OneWayDataTableAnalysis
NPV vs. Initial Rental Rate
($600,000)
($500,000)
($400,000)
($300,000)
($200,000)
($100,000)
$0
$100,000
$200,000
$300,000
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600
Rental Rate
NPV
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ModelingProcess Page7
OneWayTables(Some,NotAll)forSensitivityChart
CompletedSensitivity(Spider)Chart
Sensitivity Analysis
$-
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
80% 90% 100% 110% 120%Percent
NPV
Purchase Cost
Maint Cost/Unit
Property Taxes
Sales Multiplier
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ModelingProcess Page8
UsingScenarioManager
SupposewewanttoexaminethreescenariosthatweclassifyasBestCase,MostLikelyandWorst
Casefortheinputvariablesshowninthefollowingtable:
WorstCase MostLikely BestCase
PurchasePrice $1,250,000 $1,000,000 $750,000
VarCost/Truck $4,000 $4,800 $5500
PropTaxGrowth 6% 4% 3%
TruckCostGrowth 10% 7% 5%
RentalRateInflation 7% 9% 12%
BusinessSale
Multiplier
1.5 3 4
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ModelingProcess Page9
continuetheprocessuntilallscenariosaredefined
ThenexamineresultsusingSummary
Choosingoneormoreresultcells:
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PracticeExample
{Moore&Weatherford,DecisionModeling.}
Astartupcompany,SimonPiecompanygeneratesprofitfromcombiningtwopurchasedingredients(
fruitandfrozendough)intoapplepies,processingthepies(cookingpackaging,deliveryetc),andselling
themtoalocalgrocerystore.ThecompanysfounderSamuelSimonintendstobuildanexcelmodelto
explorehisoptions.
SimonsInitialModelInputValues
PiePrice $8
Piesdemandedandsold 16
Unitpieprocessingcost($perpie) $2.05
Unitcost,
fruit
filling
($
per
pie)
$3.48
Unitcost,dough($perpie) $0.30
Fixedcost($000sperweek) $12
BlackBoxView
InfluenceDiagram
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ModelingProcess Page12
KeyRelationships:
SketchSpreadsheetLayout:
BuildModel:
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ModelingProcess Page13
Model:
After
some
reflection,
Simon
concludes
that
at
a
pie
price
of
$12
there
would
be
no
demand
for
his
pies
andthatbelowa$12pricehewouldgainanadditional4000piessoldperweekforeach$1reductionin
price.So,forsimplicity,heassumesthatademandrelationshipisexpressedbyalinearequation,
producingthefollowingequationforSimonsweeklypiedemandinthousandsofpies:
DevelopSketchandlinearmodel
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ModelingProcess Page14
Incorporatingthischangeinourmodel:
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ModelingProcess Page15
Wewanttoexaminetheimpactofpiepriceonprofitusingadatatable.
ExampleContinued
Examiningthemodel,itappearsthatactualweeklypieprofitsaresomewhatlessthanprojected. In
reviewingthemodelsbehaviorforlowerpieprices,SimonsuspectsthatthemodelsProcessingCost
formulaproducesthecorrecthistoricalcostforthebasecaseof12,000PiesDemanded,butnotfor
othervaluesofPiesDemanded.
So,wecollectdataonActualProcessingCostfordifferentlevelsofpieproduction(seebelow).
Developamodelforprocessingcostbasedondatacollected. Revisedyourmodeltoincorporatethis
revisedrelationshipbetweenproductionandprocessingcost.
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RevisingModel
FinalFormulas:
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AnotherDataTableandXYScatter
SensitivityAnalysis
Weexaminetheimpactofinitialparametersvaryingacrossarangeof80%to120%oforiginal
estimatedvalueandobservedtheimpactonProfitthroughacombinationofonewaydatatablesand
XYscatter.
Developaspiderchartofunitcostfruitfilling,unitcostdough,demandintercept,demandslopeand
fixedcost.
Comment
on
insights
you
can
gain
from
this
chart:
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Profit Sensitivity
($2,000)
($1,800)
($1,600)
($1,400)
($1,200)
($1,000)
($800)
($600)
($400)
($200)
$0
80% 90% 100% 110% 120%
% Change in Base Value
Profit
Unit Cost, Filling
Unit cost, Dough
Demand Intercept
Demand Slope
Fixed Cost