Ajjan Associates, LLC

How can you reduce the risks of Strategic Planning?

No doubt, it is risky to alter the current allocation of resources without knowing the outcome, and every manager knows how difficult it is to justify the cutting or increasing of sensitive budgets.

Our resource allocation modeling techniques enable complex estimations of expected outputs (revenues, productivity, etc.) at a given spending level, so that you can set your budget to maximize ROI.

This is accomplished through a software-driven calculus-based analysis of established projections. Often, outputs can be significantly optimized with a simple reallocation of existing budgets.

Above: graphical analysis from a sample resource allocation project designed by Ajjan Associates. Read more to learn how your company can make use of this powerful method.

more services from Ajjan Associates:

Conjoint Analysis - Risk Analysis - Decision Calculus

Eligibility for Resource Allocation

Eligibility for the resource allocation model requires multiple channels of spending, and the ability to track outputs by each channel. What does that mean?

Well, you could have 3 different sales departments, each with their own costs and revenues. You could be a manufacturing business, with several different plants or cost-centers, and can track productivity for each. You could be a phone-driven business that advertises 3 different numbers in 3 different places.

Resource Allocation Method

Let's say you have a manufacturing business, and you currently operate 4 different plants in 4 different countries (USA, Germany, Mexico, & UAE). Each plant tracks its own productivity rates and has a total delivered cost (TDC) per unit. That's 4 channels, all traceable. You are debating where to make capital investment or hire new employees, or downsize.

The first thing we will ask you to do is make estimates of productivity or TDC given 4 key points of spending/investment, for each plant separately:

cut spending/investment in half (how much impact would it have on productivity or TDC?)
current spending/investment level (a known quantity of output in terms of productivity or TDC)
double spending/investment (project the impact on productivity or TDC)
maximize spending/investment (with infinite dollars to spend, where would your productivity or TDC top-off?)

Do this for each channel and we will derive the following:

By estimating the shape of the curve (the mathematical function that relates outputs to budgeted spending at any point), we can probably pick out the optimal point quite easily.

That is not the complicated part. But try to factor in all 4 channels at once and find the optimal point!

Resource Allocation Results

Now the software comes in. It will take the projections, and compare all 4 functions simultaneously, ultimately coming up with a recommended optimal spending level for each channel, given the same budget, like so:

Plant	Current Costs	Current Productivity	Projected Costs	Projected Productivity
USA	10	34	11	38
Germany	15	45	17	49
Mexico	10	28	3	16
UAE	5	24	9	67
total	40	131	40	170

As you can see, the results are often dramatic - in this case a 30% increase in productivity with flat costs (productivity increases from 131 to 170 while costs remain constant at 40). Once the model is designed, you can easily configure it for an increased budget, or a decreased one. The possibilities are numerous.

Please fill out the form to the right to learn more about the design and implementation of this powerful technique.

We would be more than happy to schedule an initial consultation free of charge to understand how our resource allocation tools can help you, either by phone or in person.

PO Box 4031 - Clifton, NJ 07012 USA

george@ajjan.com - +1 (973) 685-6368

Conjoint Analysis - Risk Analysis - Decision Calculus - Resource Allocation

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