# An Introduction To Business Decision Modelling - PowerPoint PPT Presentation

PPT – An Introduction To Business Decision Modelling PowerPoint presentation | free to view - id: 733748-ZmZiN

The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
Title:

## An Introduction To Business Decision Modelling

Description:

### An Introduction To Business Decision Modelling Chen Zhimin( ) School of Management Shenzhen University Office: 2403 Tel: 26534104(O) 13902972552(Mobile) – PowerPoint PPT presentation

Number of Views:46
Avg rating:3.0/5.0
Slides: 29
Provided by: chen295
Category:
Tags:
Transcript and Presenter's Notes

Title: An Introduction To Business Decision Modelling

1
An Introduction To Business Decision Modelling
• Chen Zhimin(???)
• School of Management
• Shenzhen University
• Office ???2403
• Tel 26534104(O) 13902972552(Mobile)
• Email chenzm_at_szu.edu.cn

2
1. The Structure of Linear Models
• The general expression for a straight line
• yabx
• y and x dependent /independent variables of
interest
• a and b constants, coefficients, parameters
• a Intercept--- yab(0)a
• bthe change in y/unit change in
x
• ?y/ ?x

3
(No Transcript)
4
• Example y32x
• Intercept a3
• Slope b?y/ ?x2
• Shifts of a straight line
• Changes in the intercept
• y72x
• y-22x
• Changes in the slope
• y35x
• y31x

5
• Two fundamental types of shifts of straight line
• Parallel shift changes in the intercept
• Pivotal shift changes in the slope

6
(No Transcript)
7
(No Transcript)
8
(No Transcript)
9
(No Transcript)
10
(No Transcript)
11
(No Transcript)
12
(No Transcript)
13
Break Even Analysis
• A company/firm
• Make a single product
• Capacity 150
• Price 20
• Fixed cost 500
• Variable cost 15
• Find Break-Even Point

14
• Production Potential
• 0-150 units
• Revenue Consideration
• Total Revenue(TR)
• TRpq
• p ----selling price/unit
• q ----quantity sold
• Example TR020q (comparison with yabx)
• Average Revenue(AR)
• ARTR/qpq/qp

15
(No Transcript)
16
• Marginal Revenue(MR)
• MR(the changes in TR)/(a unit changes in q)
• ?TR/ ?q
• Cost Considerations
• Fixed Cost(FC)
• Irrespective of how many units of output are
produced annual rental charges, management
cost,..
• Total Variable Cost(TVC)
• TVCVCq
• VC variable cost per unit labour/material
payment

17
• Total Cost(TC)
• TCFixed Cost Total Variable Cost
• FCVCq
• Example TC50015q
• (compared with yabx)
• Average Cost(AV)
• AVTC/q
• Marginal Cost(MC)
• MC ?TC/ ?q

18
(No Transcript)
19
• Break Even Analysis
• Diagram 1.4
• System of linear equations
• TR020q
• TC50015q
• TRTC (Break Even)
• Break Even Solution
• To scan Table 1.2
• To solve the system of linear simultaneous
equations

20
• The rule to write the system of linear equations
• The unknowns have been written in a specific ,
consistent order in each equation
• All terms involving unknowns have been taken to
the Left Hand Side (LHS) of each equation
• All constants are taken to the Right Hand Side
(RHS) of each equation
• The coefficients of each unknown are carefully
identified in each equations, including 0 and 1

1TR0TC-20q0 0TR1TC-15q500 1TR-1TC- 0q0
21
(No Transcript)
22
(No Transcript)
23
(No Transcript)
24
(No Transcript)
25
(No Transcript)
26
(No Transcript)
27
(No Transcript)
28
(No Transcript)