Revenues, and Profits

This section introduces the components of project costs and revenues. 

The fixed capital investment is the total cost of designing, constructing, and installing a plant and the associated modifications needed to prepare the plant site. The fixed capital investment is made up of 

The inside battery limits (ISBL) investment—the cost of the plant itself  

The modifications and improvements that must be made to the site infrastructure, known as offsite or OSBL investment-, 

The ISBL plant cost includes the cost of procuring and installing all the process equipment that makes up the new plant. 

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Table 8. Costs, revenue and profit for producer after implementing Chemical Leasing with 10% efficiency increase...

If the utilitarian state could not see the real, existing forest for the (commercial) trees, if its view of its forests was abstract and partial, it was hardly unique in this respect. Some level of abstraction is necessary for virtually all forms of analysis, and it is not at all surprising that the abstractions of state officials should have reflected the paramount fiscal interests of their employer. The entry under forest" in Diderot s Encyclopedie is almost exclusively concerned with the utiliti publique of forest products and the taxes, revenues, and profits that they can be made to yield. The forest as a habitat disappears and is replaced by the forest as an economic resource to be managed efficiently and profitably. Here, fiscal and commercial logics coincide they are both resolutely fixed on the bottom line. 

In Europe, as Table 1.2 illustrates, the German and Swiss leaders were the Rhine Valley chemical companies, whose evolution has been sketched above. The British companies became significant competitors after World War II, but France s Rhone-Poulenc failed to become a factor in world markets. The most successful European pharmaceutical company of all in terms of revenues and profits was F. Hoffmann-La Roche (now Roche Holding), established in 1894 in Basel, Switzerland, the headquarters site of the three Swiss chemical companies listed in Table 1.1. 

By the mid-1960s these new markets had grown crowded. Revenues and profit margins fell off. The competitors on the research-intensive paths returned to their core prescription drugs. By 1969 the goal of the leaders on the low-tech path was full-scale entry into the prescription drug business. 

The economics of smelting very low grade lead concentrates to bullion proved marginal at best, and in early 1998 the plant was used successfully to smelt copper concentrates to produce matte and a discard slag as a means of increasing revenue and profitability. Unfortunately the plant, as part of the Tsumeb complex, remains on cold standby following closure in March 1998 when Gold Fields of Namibia ceased operations. 

In essence, planners establish assumptions about the costs, revenues, and profits from the new product. In this process they must make educated guesses about the structure and performance of the supply chain, including elements both internal and external to the company. Planners then set milestones for the implementation process. At these milestones, they compare actual results to assumptions. The outcome is anticipated in the planning and then discovered through this process. If the technique is well executed, contingency plans are at the ready to react when reality departs from the assumptions. 

To influence investors favorably, the entity seeking outside investment must produce a convincing business plan that sets forth the actions to be taken to achieve the expected revenue and profits. The business plan would include the necessary display of financial data. 

The trends of 1948 continued into 1949. Revenues and profits were down again, largely because bulk sales had tailed oflF dramatically, just as Bennett had predicted. What he had not anticipated was the burgeoning of commercial sales, now responsible for 86 per cent of the department s total revenue. This trend was underlined by the increased number of orders filled -up from fifiy-six in 1946 to five hundred and fifiy-five in 1949. 

Errington had reason to be proud of what he had accomplished in five years in the radium business. He had built Eldorado s commercial sales slowly but solidly. This was not immediately evident from the roller-coaster lines on sales revenues and profit graphs for the period. But these ups and downs were the result of windfall profits from political sales. When commercial revenues alone were charted, the figures showed a gradual and steady increase year by year. 

The UK Government sold its remaining shares in BP in 1987. Between 1988 and 2003, the company went through a further period of massive transformation it grew rapidly by a series of mergers and acquisitions, with large increases in revenue and profitability. The companies involved included Britoil, Sohio, Amoco, Burmah-Castrol, and Atlantic Richfield. 

For all of the above the emphasis is on sales revenue and profit, and according to Wild (2002) all are affected by supply and danand and are dependent on the efficiency of the operation. We add that the operation in turn is dependent on the performance of the supply chain. 

As a final step, you have to make sure that all partners who are part of the network (Fig. 84) receive the market information at the same time. This will prevent the whipsaw effect which destroys revenue and profits. 

Increases revenue and profit for the firm with no or very small marketing costs... 

In essence, planners establish assumptions about the costs, revenues, and profits from the product. In this process they must make educated guesses about the structure and performance of the supply chain, including elements... 

The developed methodology is illustrated in Figure 1. The overall model consist of four blocks. The inputs of the model are introduced in the Inputs block. The inputs are processed in the Data Process block and then considered for the Simulations block. In the Simulations block, processed climate series, forecasted failure behaviours and vessel accessibihty and operabiUty values are synthesised and OPEX calculations are performed. The cost elements which influence offshore O M activities are then employed along with these results to support the decision making. Final decision choices are determined not only from a power production point of view, but also in terms of cost, revenue and profit. 

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