Cost time profile

The cost-time profile (CTP) (Bicheno, 2004) is a graph, which plots cumulative time against cumulative cost for a set of discrete activities that together form a process or a supply chain. The CTP utilises outputs from two sources ... 

Such data can be used to construct a cost-time profile. Bernon et al. (2003) record the process in terms of time and cost for a poultry product from receipt of live bird to delivery of finished product to the retailer. Overall, the process takes an average of 175 hours to complete. The profile shows areas that consume time and cost within the supply chain, highlighting those for future investigation that could yield savings. For example, distribution accounts for 35 per cent of process time, but only 3 per cent of total cost. Slicing and packaging are more in line, since they account for 25 per cent of total cost and are responsible for 28 per cent of the total process time. Figure 3.8 shows the time-cost profile for this process. 

Figure 3.8 Cost-time profile for poultry product...

In principle GD-MS is very well suited for analysis of layers, also, and all concepts developed for SNMS (Sect. 3.3) can be used to calculate the concentration-depth profile from the measured intensity-time profile by use of relative or absolute sensitivity factors [3.199]. So far, however, acceptance of this technique is hesitant compared with GD-OES. The main factors limiting wider acceptance are the greater cost of the instrument and the fact that no commercial ion source has yet been optimized for this purpose. The literature therefore contains only preliminary results from analysis of layers obtained with either modified sources of the commercial instrument [3.200, 3.201] or with homebuilt sources coupled to quadrupole [3.199], sector field [3.202], or time-of-flight instruments [3.203]. To summarize, the future success of GD-MS in this field of application strongly depends on the availability of commercial sources with adequate depth resolution comparable with that of GD-OES. 

OTA s approach to R D cost assessment relied on a detailed analysis of the validity of the Hansen and DiMasi studies. First, OTA examined the validity of the methods used to estimate each component of R D costs (cash outlays, project time profiles, and success rates). Second, OTA tested the consistency of the resulting estimates with corroborative studies. Third, OTA examined whether the rate of increase in real (i.e., inflation-adjusted) R D cost implied by the two studies is consistent with data on trends in major cost drivers, such as the number of subjects of clinical trials, biomedical research personnel costs, and animal research costs. 

First, accounting profits are poor measures of true IRRs. Revenues and costs recognized in accounting statements don t correspond very well to actual cash flows. And, because profits are computed over a limited period, they don t adjust properly for the time profile of cash flows from various investments made in previous times or for payoffs that won t occur until after the profit measurement period. 

Grabowski and Vernon (159) also used published aggregate R D expenditure data to estimate the cost of successful drug development. Though Grabowski and Vernon did not estimate development time profiles with statistical analysis, their estimate provides another point of reference for comparison among methods, and it is also summarized here. 

The estimated cash outflows, spread over the discovery and development periods according to the time profile reported by companies, were converted to their present value in the year of market approval. The early study used a real (inflation-adjusted) cost of capital of 8 percent the later study used 9 percent. 

The assessment of validity of the methods concentrates on the project-level studies of Hansen (175) and DiMasi (109) for two reasons. First, the DiMasi study offers the most recent estimate which industry representatives and others have quoted widely as the definitive estimate of research costs (325). Second, the other studies based on aggregate R D expenditures draw from the project-level analyses of Hansen and DiMasi for estimates of the time profile of development and are therefore partially dependent on them. 

Table 3-5-Effects of R D Time Profile on Costs of R D in Project-Level Studiesa( 1990 millions)...

To summarize, the estimates by DiMasi and colleagues of the cash outlays required to bring a new drug to market and the time profile of those costs provide a reasonably accurate picture of the mean R D cash outlays for NCEs first tested in humans between 1970 and 1982. The rapid increase in inflation-adjusted R D cash outlays over the relatively short observed time span separating Hansen s and DiMasi s studies illustrates how quickly such costs can change and how sensitive such costs are to changes in R D success rates over time. 

The NCEs introduced in the period from 1981 to 1983 began clinical testing roughly 8 years earlier (1973-75), the midpoint of the study years in DiMasi s R D cost study (109). OTA assumed that DiMasi s cash outlays (in constant 1990 dollars), success rates, and development time profile represent the experience of the NCEs approved between 1981 and 1983. 

Sottas et al. [179] discuss the evaluation of a range of testosterone abuse detection protocols against a number of scenarios that may be encountered by antidoping laboratories. The aim of the evaluation was to determine the best process for interpretation of the T E ratio in order to enhance the detection of testosterone abuse with minimal impact on financial and administrative costs to sports authorities. The evaluation included IRMS and the application of a Bayesian interpretation of the T E-time profile. 

Historically, styrene-butadiene copolymers were the first emulsion polymers to be used for coating apphcations. These polymers were based on technology developed for synthetic mbber production during WW II. Typical polymer compositions were 65 % styrene with 35 % butadiene. While paints based on styrene-butadiene emulsion polymers opened the door for the development of synthetic latex paints, their cost-performance profiles were not particularly competitive with the solvent borne coatings present at that time or with the other emulsion polymer technologies which would be developed later. They now occupy only a very small segment of the coatings market... 

Estimate the cash-flow profile for each alternative. The cash-flow profile should include the costs and revenues if they differ, for the alternative being considered during each period in the planning horizon. For public projects, revenues may be replaced by estimates of benefits for the public as a whole. If revenues can be assumed to be constant for all alternatives, only costs in each period are estimated. Cash-flow profiles should be specific to each alternative. We shall denote revenues for an alternative x in period t as B (t,x), and costs as C (t,x). By convention, cash flows are usually assumed to occur at the end of the time period, and initial expenditures to occur at the beginning of the planning horizon, that IS, m year 0. 

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