COST EFFECT PROCESSOR

Cost development can be just as complex as revenue development. Most costs are not linear with hours or ask's. Our cost effect processor creates instant insight in the effect of any change in the schedules on company costs.

Simplifying costs to hourly fees may seem attractive, but is generally far from accurate. Most costs are not driven by the hours, but by other factors like cycles, loads or routings. Other costs are far from linear with any production characteristics, like own handling, fixed costs or crew rotations.

Schedule Consult's Cost Effect Processor was developed to smoothly make these calculations and provide full insight in the cost effect of a schedule change.

The Cost Effect Processor is highly functional in:

• Profitability analysis: It also helps to enable sharper profitability analysis, as there is no need for arbitrary cost allocations. The central question in profitability analysis is whether the company results are optimal.

So the different parts of the production must be evaluated in this light. Changing them can either affect a cost driver or it does not affect a cost driver. The effect can be disproportional, to the high end or to the low end. Thus in making network decisions it is essential to weigh only the costs that will be affected by a feasible network decison -e.g. cancelling a flight, rescheduling, opening a new route, etc.

• Uniform standards: Comparing scenarios requires using the same standards in the calculations of each scenario. The Cost Effect processor allows a great level of detail in these calculations, while it ensures that the same data sources and standards are used.
  

• Sensitivity analysis: Insight in the effect of changed circumstances and deviations from assumptions is essential for every decision maker. The separate sensitivity section of TTM uses the cost effect processor to determine these effect in detail.

The cost effect processor enables participants in the project to focus on the content and the nature of the proposed solutions, rather than on the interpretation of the figures.