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− | Note that the stakeholder count must be estimated in every period of the analysis, and costs incurred in every period must be discounted back to the present-value base year. That means that if you have a lot of periods, the RCC will be estimating the stakeholder count many times and doing a lot of sub-annual discounting.
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| + | Note that the stakeholder count must be estimated in every period of the analysis, and costs incurred in every period must be discounted back to the present-value base year. The frequency determines how many analytical periods there are in each year of the analysis, and hence the total amount of periods throughout the analysis. This means that if you have a lot of periods, the RCC will be estimating the stakeholder count many times and doing a lot of sub-annual discounting. |
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− | The frequency determines how many analytical periods there are in each year of the analysis, and hence the total amount of periods throughout the analysis. If the annual frequency is 1, then there will be 1 period per year, and 10 total periods over a 10-year timeframe. If you enter an annual frequency of 1,200, then you are telling the RCC that you want to split every single year into 1,200 evenly spaced periods, in which the stakeholder count must be estimated and impacts must be discounted back to the PV base. Is that really what you want to do? With 1,200 evenly spaced periods that means the RCC will estimate the stakeholder count more than 3 times per day. There is nothing mathematically wrong with this, however it is computationally intensive and it may not be necessary.
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| + | If the annual frequency is 1, then there will be 1 period per year, and 10 total periods over a 10-year timeframe. This is the easy case and the RCC output will look very similar to what you probably have in your main CBA. However, if you enter an annual frequency of 1,200, then you are telling the RCC that you want to split every single year into 1,200 evenly spaced periods, in which the stakeholder count must be estimated and impacts must be discounted back to the PV base. Is that really what you want to do? With 1,200 evenly spaced periods that means the RCC will estimate the stakeholder count more than 3 times per day. There is nothing mathematically wrong with this, however it is computationally intensive and it may not be necessary. |
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− | The most easily understood frequencies are annually, bi-annually, quarterly, monthly, and weekly. | + | |
| + | The most easily understood frequencies are annually, bi-annually, quarterly, monthly, and weekly. If you are trying to do anything beyond this it is possible that you are making a mistake. Check the message in the Error Check column and consult your TBS analyst if you are unsure what to do. |
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− | You may also have a frequency less than 1. For instance, maybe stakeholders have to do an activity every other year, or every 3 years. The way the RCC handles these cases depends on the stakeholder growth rate. | + | You could also have a frequency less than 1. For instance, maybe stakeholders have to do an activity every other year, or every 3 years. The way the RCC handles these cases depends on the stakeholder growth rate. |
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| If the growth rate of the affected stakeholder group = 0, then there will be gaps in when the stakeholders incur the cost, and every 'n' years the count of stakeholders at the beginning of the analysis will incur the cost (for frequency = | | If the growth rate of the affected stakeholder group = 0, then there will be gaps in when the stakeholders incur the cost, and every 'n' years the count of stakeholders at the beginning of the analysis will incur the cost (for frequency = |
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− | 1/n) | + | 1/n). Initial count = 100, 0% annual growth: |
| + | [[File:Zerogrowth.png|center|thumb|900x900px|Freq = 1/3, Growth = 0%]] |
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| + | If the growth rate is negative, then there will be gaps in when the stakeholders incur the cost, and every 'n' years there will be a smaller and smaller number of stakeholders incurring the cost. In other words the existing stakeholder count will be diminishing over time, and whoever is still in the market every 'n' years will incur the cost (for frequency = 1/n). |
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− | If the growth rate is negative, then there will be gaps in when the stakeholders incur the cost, and every 'n' years there will be a smaller and smaller number of stakeholders incurring the cost. In other words the existing stakeholder count will be diminishing over time, and whoever is still in the market will incur the cost every 'n' years (for frequency = 1/n).
| + | [[File:Freq less than 1 negative stakeholder growth.png|center|thumb|900x900px|Freq = 1/3, Growth = -1%]] |
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− | If the growth rate is positive, then it is the most complicated. Every year there will be some new entrants, (new 'cohorts'), and each cohort of new entrants will be on its own track of incurring costs every 'n' years (for frequency = 1/n). | + | If the growth rate is positive, then it is a bit more complicated. Every year there will be some new entrants (new 'cohorts'), and each cohort of new entrants will be on its own track of incurring costs every 'n' years (for frequency = 1/n). |
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| + | [[File:Image1111112221.png|center|thumb|900x900px|Freq = 1/3, Growth = 1%]] |
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| + | Note that with positive stakeholder growth and a frequency less than 1, there are no years with $0 impacts. In the 'off-years' there are still costs because new entrants are entering the market and incurring costs for the first time, and after they incur the cost for the first time they are then on their own unique track to incur costs every 'n' years for frequency = 1/n. In some years multiple cohorts will be incurring costs at the same time, and this is calculated automatically. For example, if the frequency = 1/3 and the activity starts immediately, then the existing stakeholders will incur the cost at the end of Year 1 along with the new entrants from Year 1. This is the first cohort incurring the cost. The new entrants in year 2 will be the only ones incurring the cost in Year 2, and the new entrants in Year 3 will be the only ones incurring the cost in Year 3. In year 4, the first cohort has to incur the cost again (since 3 years have elapsed), and they will do so along with the new entrants in Year 4. In year 5 the new entrants from year 2 along with the new entrants from year 5, and so on. It was a nightmare to get this to work properly in the RCC, especially if you select that it applies to "All Groups". |
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| <big>'''TO BE CONTINUED . . .'''</big> | | <big>'''TO BE CONTINUED . . .'''</big> |