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Text File  |  1992-03-26  |  8KB  |  163 lines
  1.  
  2.                 Economic Value of the Portfolio of Patients
  3.  
  4. Finally¼ ß featurσ commonplacσ iε thσ investmen⌠ communit∙ migrate≤ t∩ thi≤ ì
  5. program«   Yo⌡ no≈ havσ thσ abilit∙ t∩ determinσ thσ curren⌠ valuσ oµ  you≥ ì
  6. Portfoli∩á  oµ Patients«á  Thesσ economiπ measure≤ havσ lonτ beeεá  applieΣ  ì
  7. t∩ stocks¼á  bonds¼  anΣ othe≥ investments¼ bu⌠ arσ jus⌠ no≈ beinτ  applieΣ  ì
  8. t∩á determinσ  thσ economiπ valuσ t∩ yo⌡ oµ ß grou≡ oµ PEOPLE«á   The∙ givσ  ì
  9. yo⌡á aεá  economiπ assessmen⌠ oµ al∞ oµ thosσ economiπ event≤á tha⌠á  coulΣ  ì
  10. occur¼á adjusteΣá fo≥á thσá passagσá oµ timσá a≤á wel∞á a≤á minimum/maximuφ ì
  11. constraints.
  12.  
  13.  
  14.                       Overview of options at this menu:
  15. Optioε  ▒  establishe≤  thσ globa∞ defaul⌠  variable≤  fo≥  thi≤  analysis«  ì
  16. Optioε ▓ doe≤ thσ actua∞ Aginτ Analysis«  Option≤ │ anΣ ┤ givσ yo⌡ ß choicσ ì
  17. oµá ho≈á yo⌡á wan⌠ thσ record≤ presenteΣ iε ßá report║á  eithe≥á sorteΣá b∙ ì
  18. compan∙á  namσá  oµ Patien⌠ anΣ showinτ thσá curren⌠á Economiπá Value╗á  o≥  ì
  19. sorteΣ  iε ascendinτ orde≥ oµ thσ curren⌠ Economiπ Value.
  20.  
  21.  
  22.                              Detail on option 1:
  23.  
  24. In option 1 of the Portfolio of Patient Menu you define these 4 variables:
  25.  
  26.                               Global Variables:
  27.  
  28.    1)   'Plateau' value for the Aging Analysis, in weeks:
  29.    2)   'Floor' % value for the Aging Analysis:
  30.    3)   'Decay Slope', linear or logarithmic:
  31.    4)   'Half-Life' value for the 'Decay Slope', in weeks:
  32.    
  33.  
  34.                                 Global Variable 1:
  35.                                  'Plateau' value:
  36.  
  37. Thσ  'Plateauº  valuσ  describe≤ thσ perioΣ oµ timσ tha⌠  passes¼  iµ  any¼ ì
  38. withou⌠  an∙ economiπ loss«  If¼ fo≥ example¼ yo⌡ arσ tryinτ t∩  tracδ  thσ ì
  39. economiπ valuσ oµ proposal≤ tha⌠ yo⌡ submit¼ you≥ experiencσ migh⌠ bσ  tha⌠ ì
  40. fo≥á ever∙á proposa∞ tha⌠ yo⌡ submi⌠ ╕ week≤ ma∙ pas≤ beforσá you≥á Patien⌠ ì
  41. wil∞á evaluatσá  wha⌠  yo⌡ havσ submitted«á  Iµ you≥ experiencσ show≤á tha⌠  ì
  42. thi≤á  ╕á weeδá perioΣá almos⌠ alway≤ occur≤á withou⌠á an∙á economiπá deca∙ ì
  43. associateΣá witΦá it¼á theεá eacΦ proposa∞ ha≤ aε ╕á weeδá 'Plateauºá valuσ ì
  44. associateΣ witΦ it« 
  45.  
  46.  
  47. Thσ  purposσ oµ thσ 'Plateauº valuσ i≤ t∩ allo≈ aε aginτ proces≤  t∩  occu≥ ì
  48. whilσ reflectinτ thσ realit∙ oµ tha⌠ market║  iε man∙ industries¼ ß  perioΣ ì
  49. oµ timσ passe≤ BEFOR┼ an∙ economiπ deca∙ caε bσ presumeΣ t∩ start«  Iµ  yo⌡ ì
  50. attenΣ  tradσ  shows¼ ß ┤ o≥ ╢ weeδ follo≈ u≡ ma∙ occu≥  beforσ  whicΦ  thσ ì
  51. economiπ utilit∙ oµ thosσ contact≤ begin≤ t∩ decay.
  52.  
  53. Yo⌡  tailo≥  thσ 'Plateauº valuσ fo≥ you≥ industr∙ anΣ  particula≥  se⌠  oµ ì
  54. circumstances«  Oncσ defined¼ i⌠ cause≤ thσ analysi≤ t∩ extenΣ ß  'plateauº ì
  55. fo≥  tha⌠  numbe≥ oµ week≤ BEFOR┼ startinτ thσ deca∙  analysis«    Yo⌡  caε ìèselec⌠ an∙ numbe≥ oµ week≤ t∩ reflec⌠ you≥ industry¼ includinτ thσ  defaul⌠ ì
  56. valuσ oµ '0'.
  57.  
  58.  
  59.                              Global Variable 2:
  60.                                 'Floor' value   
  61.  
  62. Thσ  'Floorº valuσ i≤ thσ percentagσ yo⌡ inpu⌠ tha⌠ place≤ ß floo≥  a⌠  thσ ì
  63. bottoφ oµ thσ deca∙ slope«   Iµ yo⌡ ente≥ ß 'Floorº value¼ thσ prograφ wil∞ ì
  64. sto≡  thσ  deca∙  wheε i⌠ reache≤ tha⌠ level«  Thσ purposσ oµ  thi≤  i≤  t∩ ì
  65. recognize¼á fo≥á example¼á tha⌠á regardles≤á oµá ho≈á lonτá ßá proposa∞á i≤ ì
  66. outstanding¼á  i⌠á  ma∙ alway≤ havσ somσ residua∞ valuσ t∩á you«á  Iµá  yo⌡  ì
  67. definσá  thσá 'Floorºá  valuσá  t∩á  bσ  25Ñ fo≥ ßá Patien⌠á tha⌠á ha≤á  aε  ì
  68. potentia∞á  valuσ  oµ $100,000¼á theε thσ deca∙ analysi≤ wil∞ sto≡ wheεá i⌠ ì
  69. reache≤ $25,000«     
  70.  
  71. Notσ tha⌠ valuσ i≤ ALWAY╙ entereΣ a≤ ß percentage¼ no⌠ ß decimal¼ anΣ  tha⌠ ì
  72. yo⌡ caε havσ an∙ valuσ froφ ░ t∩ 99.99.
  73.  
  74.  
  75.                              Global Variable 3:
  76.  
  77.                     'Decay Slope', linear or logarithmic:
  78.  
  79. The  'Decay  Slope' variable gives you the choice of using a  linear  decay ì
  80. slope or logarithmic.
  81.    
  82.  
  83. The Linear slope describes those economic events that will decline the same ì
  84. absolute  amount each week.  If, for example, you determine  that  business ì
  85. cards  you acquire at a trade show become worthless in 10 weeks,  then  you ì
  86. could say they loose 10% of their economic value each week.   If  proposals ì
  87. that  you submit become worthless after 20 weeks, then you could  say  they ì
  88. loose  5% of their value each week.  If you work for a bank and  are  using ì
  89. this program to track bad debt collections activity, then you have a  clear ì
  90. idea of how each person in the file becomes increasingly less likely to pay ì
  91. given the passage of time.
  92.  
  93. In  addition  to the Linear slope, you have  another  choice:  logarithmic.   ì
  94. You  can  think of this method as being a variation of  compound  interest.  ì
  95. Instead of principal and interest being compounded in your bank account,  a ì
  96. potential economic event such as closing a sale is being reduced or decayed ì
  97. in the same manner.    
  98.  
  99. Fo≥  yo⌡ mathematicians¼ thσ logarithmiπ deca∙ proces≤ is║ "thσ  changσ  iε ì
  100. quantit∙á ove≥á an∙á timσá interva∞ ..«á proportiona∞ t∩ thσá sizσá oµá thσ  ì
  101. interva∞á  anΣ  t∩ thσ averagσ valuσ oµ thσ quantit∙ ove≥ tha⌠á  interval.ó    ì
  102. Thσá logarithmiπ  deca∙  proces≤ i≤ computeΣ usinτ L'Hopital'≤á Rule«á    ┴  ì
  103. valuσáá decay≤á exponetiall∙á iµá it≤á instantaneou≤á ratσá oµá changσáá i≤ ì
  104. proportiona∞á  t∩á it≤á instantaneou≤á value«áá  Therσá arσá man∙áá natura∞ ì
  105. processes¼ likσ  bacteria∞ growtΦ o≥ radioactivσ decay¼ iε whicΦ quantitie≤ ì
  106. increasσ o≥ decreasσ a⌠ aε "exponentia∞ rate."
  107.  
  108. Assuming  an  initial 'Economic Value' of $10,000, no 'Plateau'  value,  no ì
  109. 'Floor', and a 'Half-Life' of 10 weeks:è
  110.  
  111.                                                       Weekly Percentage 
  112.                       Cumulative Decay: $               decline:
  113.                       
  114.                  Linear          Logarithmic        Linear    Logarithmic
  115.                  ------          -----------        ------    -----------
  116.     Week           
  117.      1            $500                $669              5%        6.7%  
  118.      2            1000                1294              5         6.24
  119.      3            1500                1877              5         5.83
  120.      4            2000                2421              5         5.44
  121.      5            2500                2928              5         5.08
  122.      6            3000                3402              5         4.73
  123.      7            3500                3844              5         4.42
  124.      8            4000                4256              5         4.13
  125.      9            4500                4641              5         3.84
  126.      10           5000                5000              5         3.59
  127.      11           5500                5334              5         3.35
  128.      12           6000                5647              5         3.12
  129.      13           6500                5938              5         2.92
  130.      14           7000                6210              5         2.72
  131.      15           7500                6464              5         2.53
  132.      16           8000                6701              5         2.37
  133.      17           8500                6922              5         2.21
  134.      18           9000                7128              5         2.06
  135.      19           9500                7320              5         1.93
  136.      20          10000                7500              5         1.79
  137.  
  138.    
  139.  
  140.  
  141. Observe  that  the logarithmic decay is accelerated in  the  beginning  but ì
  142. begins  to  trail off after a while.  At 10 weeks (the  'Half-Life'),  they ì
  143. both have the same amount of accumulated decay:  $5000.  
  144.  
  145. Note also that after 20 weeks, the logarithmic decay is not 100%  completed ì
  146. but  only  75%.  In concept, this decay rate will trail  out  to  infinity.  ì
  147. After 30 weeks, for example, the cumulative decay is $8,750.           
  148.  
  149.  
  150.  
  151.                              Global Variable 4:
  152.  
  153.              'Half-Life' value for the 'Decay Slope', in weeks:
  154.  
  155.  
  156. Thσ  'Halµ Lifeº i≤ defineΣ a≤ tha⌠ poin⌠ a⌠ whicΦ thσ economiπ valuσ oµ  ß ì
  157. contac⌠ o≥ even⌠ ha≤ declineΣ t∩ halµ oµ it≤ origina∞ value«  Thi≤ valuσ i≤ ì
  158. highl∙  subjectivσ anΣ reflect≤ you≥ appraisa∞ oµ wheε thσ economiπ  statu≤ ì
  159. oµá  ßá proposal¼á bid¼á o≥á contac⌠ ha≤ droppeΣ t∩ halµá oµá it≤á origina∞  ì
  160. potentia∞ value.
  161.  
  162. The  'Half Life' is used by the program with Global Variable 3, the  'Decay ì
  163. Slope', in calculating the weekly decay rate.è