Capital Value Interpretation

• The following are study notes on various concepts of economic management

Capital Value Explanation

• The capital value C considers the amount and timing of payments, as later payments are discounted
• The calculation interest rate i should correspond to the cost of capital for investors, referred to as the required minimum interest rate
• If there are interim excess payments, it is implicitly assumed that these can be reinvested at the calculation interest rate
• The calculation interest rate at which the capital value would be zero is referred to as the internal rate of return

Interpretation of Capital Value - Core Idea

• With a capital value of zero, the investor receives their capital back and interest according to the calculation interest rate on outstanding amounts
• With a capital value greater than zero, the investor would only voluntarily forgo the investment if they receive an amount equal to the capital value
• Example:
• C0 = -100 + 150 * 1.1^-1 = -100 + 136.36 = 36.36
• Investing 136.36 euros at 10% results in 150 euros after 1 year

Interpretation of Capital Value – A More Precise View

• With a capital value greater than zero, the investor can take out loans for the amount of the capital value and the investment amount at the calculation interest rate
• They can consume the capital value, repaying all loans later from the investment

Interpretation of Capital Value – Comparing Investments

• To compare investment alternatives with varying initial investments and usage periods, difference and complementary investments must be included
• Example:
• CA = -100 + 150 • 1.1^-1 = -100 + 136.36 = 36.36
• CB = -50 + 80 • 1.1^-1 = -50 + 72.73 = 22.73
• Should alternative A or B be pursued?

Story with the Digitalization System

• The Federal Archives aims to replace its archiving program for historical images and graphics with a modern digital system
• They also want to offer archiving as a service for third parties for a fee
• Initial discussions with potential clients suggest numerical values for a preliminary calculation

Costs and Revenues for System

• In 2015, a payment of €50,000 is required for the new digital system
• The Federal Archives receives a credit of €5,000 for the old system
• There is an additional payment of €8,000 for the initial training of operating personnel in 2015

Ongoing Costs and Revenues, 2016-2020

• From 2016 to 2020, the archive will collect €36,000 annually in rent from clients using the digital system
• Clients receive €480 annually for energy costs; the archive must pay a total of €1,200 per year for energy costs
• The archive pays €360 in maintenance costs
• Annually, the archive spends €18,000 on system administration and €12,000 on system operation
• Clients reimburse €8,000 of the system operation costs

Task: Calculating the Project's Investment

• The interest rate is 4.5%
• Calculate based on the net present value method
• Interpret the result and any assessable statements

Payments in 2015

• Expenses: Acquisition (€50,000) + Initial training (€8,000)
• Revenues: Credit old system (€5,000)

Payments from 2016 to 2020 Each Year

• Expenses: Energy (€1,200) + Maintenance (€360) + Personnel (€30,000); Total annual: €31,560
• Revenues: Rent (€36,000) + Reimbursement energy (€480) + Reimbursement personnel (€8,000); Total annual: €44,480

Calculation of Net Present Value

• The net present value method calculates the present value of all payments of the project
• A positive net present value shows that the Federal Archives receives more revenues than expenses at present value

Project Value

• The value of the project equals an equivalent one-time benefit of €3,718.50 today
• Calculations assume identical and unchanged interest rates and complete safety to future payment streams

The Story with the Transportation Service

• A federal office plans to outsource its transportation service to a GmbH
• It will then offer transportation services to other authorities for cost reimbursement
• The transportation service needs of the authorities in question have been determined

Assumptions Made for 2015

• One-time renewal of the entire vehicle fleet: 5 new vehicles must be procured at €25,000 each
• The sale of the old vehicles results in total proceeds of €50,000
• Annual expenses for 5 drivers: €48,000 per driver

Addition Annually

• Kilometers driven are 55,000 km per vehicle, including a total of 200,000 km for other authorities
• Expenses per km for maintenance and fuel: €0.12
• Expenses for insurance and tax per vehicle: €600
• Reimbursement per km by other authorities: €1.45

Applies from 2016 to 2019 to

• There is no repeated renewal of the vehicle fleet
• All other values remain unchanged compared to 2015 to

Interest and Calculation

• Interest rate is 4.5%
• Interpret the result and state any assessable statements
• Prepare a calculation applying the net present value method

Annual Expenses and Revenues

• Annual Expenses 2015-2019: Driver (5 * 48,000) + insurance etc. (5 * 600) + Kilometer (5 * 55,000 * 0.12) = 276,000 €
• Annual Revenues 2015-2019: Reimbursement (200,000 * 1.45) = 290,000 €
• • One-time payments 2015: Procurement (5 * 25,000 = 125,000), Sales (50,000)

From Quantitative to Qualitative Procedures: Utility Value

• Economic efficiency is defined as utility divided by input (yield to expense)
• Quantitative methods like cost comparison and capital value focus on input quantified via monetary values
• They do not include qualitative aspects such as utility that are not monetarily quantifiable

Utility Value Analysis Goal

• Scoring methods aim to transform subjective value judgments into subjective goal achievement values
• Utility value supports transparency in decision-making

Qualitative Method: Approach to a Utility Value Analysis

• The basic process includes determining goals, weighting criteria, identifying possible action alternatives and evaluating alternatives using a scoring system, all leading to an order of precedence for the alternatives
• Calculate partial utility values for each alternative
• Determine total utility values for each alternative, this results in a ranking of alternatives and ultimately, a decision

Sensitivity Analysis

• Sensitivity analysis is also available if needed

Determining Goals (Objectives)

• Completeness: no omissions or hidden goals
• Freedom from redundancy: no overlapping goals (e.g., high range and large tank capacity)
• Independence: features should be independently assessable (tank capacity + fuel consumption => range!)
• Simplicity: no unnecessary detail, also fundamental measurability, ranking of goal achievement; do not include monetary goals ("lowest costs")

Weighing the Objectives

• Each objective is subjectively weighted with a value between 0% and 100% or between 0 and 1
• The weights in the sum must yield 100% or 1

Goal Weights

• The weights of the sub-goals in a possibly formulated super-goal must also yield 100% or 1 in total

Identification of Action Alternatives

• Record all at least theoretically feasible alternatives and consider the default alternative

Step 4: Evaluating Alternatives

• Evaluation necessarily has subjective elements
• Analytical aids e.g. scoring systems can increase at least transparency

Steps 5 & 6: Determine Partial and Total Utility Values

• The highest total for the alternatives is sought after

Step 7: Sensitivity Analysis

• Value analysis is subjective, it involves the determination of objectives, weighting of objectives, evaluation of the alternatives
• The value analysis is transparent, decision-making can be clearly presented and implicit assumptions also for common assessment are revealed
• The effect of the subjective factors can be checked by a supplementary sensitivity analysis

Sensitivity Analysis Questions

• What if objective 1 was weighted more greatly?
• What if Alternative A is rated lower in one aspect?

Summarizing Recommendation of Economic Efficiency

• Utility Values of alternatives are the same, choose most economic choice
• Costs of identical, but Utility Values different, the choose alternatives with greater Utility Values

What is Utility and Costs of Alternatives are different?

• Cost and utility must undergo economic balance to make choice
• Must undergo documented analysis

Exercise: Utility Value Analysis

• In an agency, 10 computer systems (workplaces) are to be set up
• There are three alternative procurement options
• A cost comparison determined average annual costs of €24,600 for Option A, €25,500 for Option B, and €25,550 for Option C
• Regarding user-friendliness, Option C is rated as better, Option A as adequate, and Option B as poor

Capability and Software

• Option A is particularly fast, Options B and C are moderately fast
• Software of usual quality is available for B and C
• Software for A is less stable

What models should be recommended under consideration of these aspects?

• Conduct a comprehensible utility value analysis
• Which model is the most cost-effective alternative in total?

User-Friendliness, Capability, Software

• This list shows the goals and the weighting they carry in the assessment

Overall Values and Analysis

• Den höchsten Nutzwert hat nach dieser qualitativen
• (nicht-monetären) Analyse die Variante C

Economic Efficiency Recommendation (Integrative Solution)

• The principle of economical efficiency rules out alternative B
• Alternative B combines the lower Utility Value along with high cost

Further Analysis

• Increase the Utility Value or the cost
• Could warant the more expensive option

Section Topics

• The basic principles of organization
• Establishing organizational units: Job creation
• Staffing requirements: Determining personnel needs
• Management systems: Leadership structure
• Documentation
• Process and process optimization: Workflow organization

Definition of "Organization”

• Functional or process perspective: the ongoing structuring of workflow
• Legal System perspective: permanent systems of regulations and sanctions that bindingly set defined tasks

Instrument Perspective on Organization

• "Organization as method"
• Tasked with designing relationships, distribution of decision-making authority, and division of tasks
• Coordination between subtasks

How Much Organization is Necessary?

• Permanent regulations that has lasting effect
• Provisional regulations for short term fix
• A fallback measure for one time use only

Organizational Equilibrium Factors

• Avoid over or under organization with organizational structure

Establishing an Organization

• Identification of overall tasks
• Task analysis and task sharing
• Identifying an error and making corrections
• Task synthesis and design

Establishing Continued

• How many need to be staffed to be used
• Controlling span
• Leadership system structure

Organizational Structure

• An organogram that displays the structure of something

Why Department Tasks?

• Can be spreaded and workload can be distributed along many different people

Different Concepts

• Dauerhafte for one type of assignment
• One time only for a type of assignment
• Day to day workflow processes

Basic Shapes of Task Allocation

• Range Distribution
• Type Distribution

Mengenteilung

• All job get the same assignements
• Workflow spread into a group

Artenteilung Specialization

• Different Jobs
• Small section of the workflow
• Line or workflow assignment

Division of Labor

• Specializations by rank or level

Specializations

• Task Specializations for worker

Phases of Specializations

• Preliminary implementation stage
• control specializations

Function Based Specializations

• Fachaufgaben vs. unterstützende Querschnittsaufgaben

Objekt Specializations

• Aufteilung der Personalsachbearbeitung nach Beamte bzw. Angestellte

Mengenteilung Strengths

• High flexibility
• Low Durchlaufzeiten
• Low coordination requirements
• High Motivation

Mengenteilung Problems

• Higher Personnel cost
• Finding replacements takes a while
• Each workstation has high costs and needs their own equipment

Artenteilung strengths

• High workflow speed
• Workers must train to get the task
• Low staffing requirements because its only short

Artenteilung Problems

• High coordination requirement
• Long workflow time
• workers lack the knowledge

Correct problems with Specialization

• Take the workers on assignments
• Add tasks
• add difficult assignments

Specializations by Type

• Artenteilung to take on as many of the workflow as possible

Reviewing the Tasks

• Consider aspects of budget

Purpose of Tasks

• Must the workflow perform the job?

Implementation Details

• Should the workflow complete tasks?
• Must the tasks be completed by the government?

Types of Government Tasks

• Central Government Tasks

Mandatory Social Tasks

• mandatory
• optional Social responsiblites

State Complementary Tasks

• Reinigung öffentlicher Gebäude

Privat Tasks

• Should offered from privatly

Governmental task alternative

• Outsourcing the the tasks

Deformalizing for the Tasks

• Converting the business into a public company

Matrielle Privatisierung

• Abgabe of governing with public support

Funktions privatisierung

• Private outsourcing for the tasks

Task Assignments

• What makes a task
• Summary distribution
• abstract task area

Task responsibility

• Small organisation units

Guidelines for Department

• Be structured around requirements
• Have qualitative capacity

Job Competencies

• Jobs tasks must match job descriptions and qualifications

What to Considee

• Responsibility issues
• Kompetenz issues
• task issues

Forms of Station

• Instances
  • Tasks for the person with disciplinary authority

(nachgeordnete) Ausführungsstellen

• Vollzug der betrieblichen Leistung ohne Weisungsbefugnis

Station Staff

• Help station with staff

Procedures for Quantitative Staffing

• Estimate
• Logical
• Analytical task requirements

Goal and Objective

• Necessary to get the work done
• Sachgerechte and no waste

Core Idea of Tasks

• The task assignment are for an hour:
• Number of Vorgänge in a year and bearbeitungszeit

Analytische Berechnung Formula Derivation

• Stellenbedar = Vorgange
• Normalarbeitszeit

Caution

• No interruptions can occur

Requirements for Analytical Accounting

• Precise and representative data are

Calculation 1: Determining the Arbeistmenge

• AV = V1 • mBZ1 + • mBZ2 + and for time peroids

Labour Arbeitszeit

• Normalarbeit for years

Calculation 3: ""VERTEILZEITEN""…

• Add VERTEILZEITEN
• All tasks that have not been for the immediate
  • Aufgabenerledigung aufgewandt

Labour Allocation Analysis Method

• There must be some work done

Normal Task Allocation

• State workflow process
  • Can add helpful assimentions

Final Assignment

• Final Assignment must undergo the schlusssatz

Job Story: "THe Job for summer"

• Look at companies job requirments for the summer

Follow the Steps to calculate jobs

• 19 days avalible
• 8h work loads

Task Table and Details

• Breakdown of all tasks that need to be done

What must happen

• 19 Arbeitstage • 8 Stunden • 60 Minuten =
• 9.120 Minuten pro Monat

How do the Jobs

• (Arbeitsvolumen • Zuschlagfaktor) / Verfügbare Arbeitszeit

Alternative Representation:

• A method to solve work flow problems

The Story with the Gebührenbescheiden

• Task and Time
• Rechen task has highest workload time

Workflow information

• Bescheide per Month 1000
• Arbeitstage per Year: 210
• Labour hour, 7.5

Some Bescheide can me doubles

• 5% triple

Worktable overview

• breakdown
• calculate

Summary

• workflow
• staff assignement

The Story with the Untersuchungen

• There are two workflow types
• Work flow has set workflow parameters

Table Data

• Breakdown per steps and workflow

Extra

• there are new data steps and calculations with jobs

Analysis

• Arbeitsvolumen über 4 Monate
• Arbeitszeit and sttellenBedarf

Control Span workflow

• A process and workflow for a instance
• 1:3 personnell

Control span amount

• How control span must have some check requirements

Task Guidelines

• Profile for instanz
• profil
• Staff requirements

Higher Task Guidlines

• Low levels of coordinating

Instanz profile control Requirements

• Highers fach qualifikationen

Higher Workflow requirements

• High Staff skills
• high work requirments

How Tasks

• The optimal range that they

Structure and Spanners

• Structure workflow and structure
• Short small staff workflow

Great Range Advantage

• Low staffing requirements
• shorter distances

Disadvantages

• Overload the instanz and the ability to maintain
• hard time communicating

Staff Task Control Types

• Comunicaitons skills and leadership
• Structure and direction in workflow

Basic Structures

• Staff only have one supervisor
• workflow done under other work instructions

Linien Task

• Each employee works together

Functional types

   - Matrix Structure

Linien tasks benefits

• Clear Task Structure
• Uniq communication flow
• Easy Workflow

Limitations

       - High workload for users
       - Long workflow and hard time cooridnating

Stafflinines System Approach

• The work load must be done to follow workflow

Types of Staff

           - Stabsspezialisten: about pressereferent and workflow.

Staff work advantages

- Engpässe help to entlastung the workload
   Sachkompetenz

• Entlastung the task force

Limitaions on Staff

• Hard to use this task setting
• Long workflow issues

System Types

• Workflows made for taylor workflow

workflow and steps overview

• what can be done

Rating Fsysterms

 - the goals in question

Mehrlinien System Structure

• Task oriented work flow

Bvork flow and limitations

   - Short workflow requirements and hierarchy level
        - Special work loads and limited responsibility

Extra Notes

• Short cut
• Staff requirements and limited work capacity
• limited knowledge of work flow
• Ausweichhandlungen of the Tasks

Tasks for each Department

 - High staff involvement
    - workflow between people

temporary staffing

• project - Workflows for staff - can hurt

Taskforce Details

• Projects are managed separately

Structure of the police

• How workflows work

Workflow steps

• Step by step details of each task

Data overview of Projects

• Data used for the implementation

Work Breakdown

• Details of how are allocated to various assignments

Extra Steps

     - Extra Data for Work

Steps to implement Taskforce

           - How they implement the workload

New Taskforce and Organisation

           - New workflow
              - New structures and workflow models

4 Major Tasks

     - Implementations
      -  Definititions
      - Plans for Workflow Task
     - Check for Work and Analysis

Staff Workflow

           - Task and workflow details
       -  Follow the task description steps

Task Chart and Detail

    -   Detailed workflow and job listings

Staffing Analysis

               - How many are there and what must the workforce to follow the workflow

Organisational and work descriptions

             - Workflow must be displayed
             - work must be shown

Detailed work and chart

   - Work graph

Business Process

    - Start with the goal
         - plan for workflow

Company Workflow overview

               - Start with all the information and the goal to reach workflow

Type of Company Workflows

           -  Implement workflows

Workflows

- Implement plans
  - manage goals

What Tasks to use that Workflow?

    - Can you use a model?

• can model

Goals of each company

      - Is a great goal