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#31
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Shuttle program extension?
"Fred J. McCall" wrote in message
... John Doe wrote: :Fred J. McCall wrote: : : If they scale with flight rates then they are not fixed costs. That's : not "over-simplification". That's the bloody definition of fixed : costs. : :If they have facilities to support say 12 flights per year, you have :fixed costs whether you operate 1 or 12 flights that year. : :But if you know you won't need more than 3 flights per year, you might :be able to scale down those facilities and staffing levels and reduce :your fixed costs. (at which point, your costs would be fixed whether you perate 1 or 3 flights per year). : :Think of it in terms of a factory. If you operate 2 production lines in :3 shifts, your factory will have equipment and employee costs that are :fixed whether the factory runs at capacity or below capacity. : :But if you are only using 1/6th of the maximum capacity, you could :shutdown one production line and only hire one shift of employees to roduce what is needed and your fixed costs would be much lower. : Go look up the definition of 'fixed cost'. If it varies with level of activity, it is a VARIABLE cost. Let me help you out: Fixed Cost: Fixed costs are operating expenses that are incurred when providing necessities for doing business and have no relation to the volume of production and sales (as opposed to "variable costs"). Examples are rent, property taxes, and interest expense. Let me help you out Fred. The fixed costs of my local airport are a LOT lower than JFK. Of course my local airport handles a lot less passengers than JFK. So yes, fixed costs CAN vary depending on how you size the program. John has a point. If you're no longer maintaining say the second OFP because you plan on a flight rate of 3 a year rather than 12, your fixed costs WILL change. Now, you won't be able to reduce your fixed costs by 75% by reducing your flight rate by 75%. Hell, you might not even be able to reduce it 15%. But, if you change your assumptions, you can change the fixed costs. -- "Ignorance is preferable to error, and he is less remote from the truth who believes nothing than he who believes what is wrong." -- Thomas Jefferson |
#32
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Shuttle program extension?
"Alexander DeClama" wrote in message
... Perhaps a better way to put it is: the facilities themselves are fixed costs. They are there whether you use them for 12 flights or 2. The maintenance personnel, replacement parts, etc are all variable costs because you use them only when needed. It's a mix of both. Except even that's not fully true. For example, do you need both OFPs if you're only flying say 3 flights a year? Generally something like an OFP would be considered a fixed cost, but the minute you reanalyze your assumptions, you might be able to eliminate it. -- Greg Moore SQL Server DBA Consulting Remote and Onsite available! Email: sql (at) greenms.com http://www.greenms.com/sqlserver.html |
#33
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Shuttle program extension?
"Greg D. Moore \(Strider\)" wrote:
:"Fred J. McCall" wrote in message .. . : John Doe wrote: : : :Fred J. McCall wrote: : : : : If they scale with flight rates then they are not fixed costs. That's : : not "over-simplification". That's the bloody definition of fixed : : costs. : : : :If they have facilities to support say 12 flights per year, you have : :fixed costs whether you operate 1 or 12 flights that year. : : : :But if you know you won't need more than 3 flights per year, you might : :be able to scale down those facilities and staffing levels and reduce : :your fixed costs. (at which point, your costs would be fixed whether you : perate 1 or 3 flights per year). : : : :Think of it in terms of a factory. If you operate 2 production lines in : :3 shifts, your factory will have equipment and employee costs that are : :fixed whether the factory runs at capacity or below capacity. : : : :But if you are only using 1/6th of the maximum capacity, you could : :shutdown one production line and only hire one shift of employees to : roduce what is needed and your fixed costs would be much lower. : : : : Go look up the definition of 'fixed cost'. : : If it varies with level of activity, it is a VARIABLE cost. : : Let me help you out: : : Fixed Cost: Fixed costs are operating expenses that are incurred when : providing necessities for doing business and have no relation to the : volume of production and sales (as opposed to "variable costs"). : Examples are rent, property taxes, and interest expense. : :Let me help you out Fred. : Don't bother. You're usually wrong. : :The fixed costs of my local airport are a LOT lower than JFK. Of course my :local airport handles a lot less passengers than JFK. : :So yes, fixed costs CAN vary depending on how you size the program. : Then they're not 'fixed costs'. See definition above. -- "Some people get lost in thought because it's such unfamiliar territory." --G. Behn |
#34
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Shuttle program extension?
"Greg D. Moore \(Strider\)" wrote:
:"Alexander DeClama" wrote in message ... : Perhaps a better way to put it is: the facilities themselves are fixed : costs. They are there whether you use them for 12 flights or 2. The : maintenance personnel, replacement parts, etc are all variable costs : because you use them only when needed. It's a mix of both. : :Except even that's not fully true. : :For example, do you need both OFPs if you're only flying say 3 flights a :year? Generally something like an OFP would be considered a fixed cost, but :the minute you reanalyze your assumptions, you might be able to eliminate :it. : Then it's not a fixed cost. -- "Ignorance is preferable to error, and he is less remote from the truth who believes nothing than he who believes what is wrong." -- Thomas Jefferson |
#35
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Shuttle program extension?
On Sep 4, 1:20*am, Fred J. McCall wrote:
John Doe wrote: :Fred J. McCall wrote: : : They're called 'fixed costs' because they're FIXED. *They don't change : no matter what your flight rate is. : : :I think this is an over-simplification. *If your ground infrastructure :is setup to handle X flights per year and this requires that one shuttle :enter maintenance phase before another one is finished, it means that :you need 2 maintenance bases, and enough employees to process 2 shuttles :concurrently (or even more if a 3rd shuttle is in a heavy maintenance hase monopolising a maintenance bay and employees for months/year) : If they scale with flight rates then they are not fixed costs. *That's not "over-simplification". *That's the bloody definition of fixed costs. What in the history of mankind has ever been fixed that was dubbed "fixed cost"? Even gold at $35 an ounce as a fixed cost changed. Nothing is fixed WRT cost, Freddy. Given enough time. Eric |
#36
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Shuttle program extension?
On Sep 4, 8:16*am, Fred J. McCall wrote:
John Doe wrote: :Fred J. McCall wrote: : : If they scale with flight rates then they are not fixed costs. *That's : not "over-simplification". *That's the bloody definition of fixed : costs. : :If they have facilities to support say 12 flights per year, you have :fixed costs whether you operate 1 or 12 flights that year. : :But if you know you won't need more than 3 flights per year, you might :be able to scale down those facilities and staffing levels and reduce :your fixed costs. (at which point, your costs would be fixed whether you perate 1 or 3 flights per year). : :Think of it in terms of a factory. If you operate 2 production lines in :3 shifts, your factory will have equipment and employee costs that are :fixed whether the factory runs at capacity or below capacity. : :But if you are only using 1/6th of the maximum capacity, you could :shutdown one production line and only hire one shift of employees to roduce what is needed and your fixed costs would be much lower. : Go look up the definition of 'fixed cost'. If it varies with level of activity, it is a VARIABLE cost. Let me help you out: Fixed Cost: *Fixed costs are operating expenses that are incurred when providing necessities for doing business and have no relation to the volume of production and sales (as opposed to "variable costs"). Examples are rent, property taxes, and interest expense. All of which change over time... |
#37
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Shuttle program extension?
On Sep 4, 11:14*am, Fred J. McCall wrote:
"Greg D. Moore \(Strider\)" wrote: :"Fred J. McCall" wrote in message .. . : John Doe wrote: : : :Fred J. McCall wrote: : : : : If they scale with flight rates then they are not fixed costs. *That's : : not "over-simplification". *That's the bloody definition of fixed : : costs. : : : :If they have facilities to support say 12 flights per year, you have : :fixed costs whether you operate 1 or 12 flights that year. : : : :But if you know you won't need more than 3 flights per year, you might : :be able to scale down those facilities and staffing levels and reduce : :your fixed costs. (at which point, your costs would be fixed whether you : perate 1 or 3 flights per year). : : : :Think of it in terms of a factory. If you operate 2 production lines in : :3 shifts, your factory will have equipment and employee costs that are : :fixed whether the factory runs at capacity or below capacity. : : : :But if you are only using 1/6th of the maximum capacity, you could : :shutdown one production line and only hire one shift of employees to : roduce what is needed and your fixed costs would be much lower. : : : : Go look up the definition of 'fixed cost'. : : If it varies with level of activity, it is a VARIABLE cost. : : Let me help you out: : : Fixed Cost: *Fixed costs are operating expenses that are incurred when : providing necessities for doing business and have no relation to the : volume of production and sales (as opposed to "variable costs"). : Examples are rent, property taxes, and interest expense. : :Let me help you out Fred. : Don't bother. *You're usually wrong. Ah, Freddy, being his normal lovable self... I bet the kids stop coming by at Halloween at your place, right Fred? : :The fixed costs of my local airport are a LOT lower than JFK. *Of course my :local airport handles a lot less passengers than JFK. : :So yes, fixed costs CAN vary depending on how you size the program. : Then they're not 'fixed costs'. See definition above. Does it say something about how hard your head is? Because if not, then it isn't relative to the discussion at this point. Eric |
#38
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Shuttle program extension?
On Sep 4, 1:00*pm, Eric Chomko wrote:
On Sep 4, 1:20*am, Fred J. McCall wrote: John Doe wrote: :Fred J. McCall wrote: : : They're called 'fixed costs' because they're FIXED. *They don't change : no matter what your flight rate is. : : :I think this is an over-simplification. *If your ground infrastructure :is setup to handle X flights per year and this requires that one shuttle :enter maintenance phase before another one is finished, it means that :you need 2 maintenance bases, and enough employees to process 2 shuttles :concurrently (or even more if a 3rd shuttle is in a heavy maintenance hase monopolising a maintenance bay and employees for months/year) : If they scale with flight rates then they are not fixed costs. *That's not "over-simplification". *That's the bloody definition of fixed costs. What in the history of mankind has ever been fixed that was dubbed "fixed cost"? Even gold at $35 an ounce as a fixed cost changed. Nothing is fixed WRT cost, Freddy. Given enough time. Eric Doesn't apply. "Fixed" denotes the fact that no matter what you do, you have to pay for x item. If you rent an apartment, your rent is a fixed cost. The electric bill is a fixed cost, because most complex if not all require you to have electric service to move in. Your cable and internet service is not a fixed cost. Car insurance is a fixed cost by law. Collision coverage is not. |
#39
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Shuttle program extension?
"Fred J. McCall" wrote in message
... "Greg D. Moore \(Strider\)" wrote: Don't bother. You're usually wrong. You know, a blind squirrel finds a nut once in a while Fred. You're not even that lucky. : :The fixed costs of my local airport are a LOT lower than JFK. Of course my :local airport handles a lot less passengers than JFK. : :So yes, fixed costs CAN vary depending on how you size the program. : Then they're not 'fixed costs'. By your definition then, nothing can ever be "fixed costs". See definition above. -- "Some people get lost in thought because it's such unfamiliar territory." Don't worry, a lot of people have offered you a map, you keep turning them down. --G. Behn -- Greg Moore SQL Server DBA Consulting Remote and Onsite available! Email: sql (at) greenms.com http://www.greenms.com/sqlserver.html |
#40
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Shuttle program extension?
"Greg D. Moore \(Strider\)" wrote:
:"Fred J. McCall" wrote in message .. . : "Greg D. Moore \(Strider\)" wrote: : : : Don't bother. You're usually wrong. : :You know, a blind squirrel finds a nut once in a while Fred. You're not :even that lucky. : Oh, I don't know. I keep finding you. : : : : : :The fixed costs of my local airport are a LOT lower than JFK. Of course my : :local airport handles a lot less passengers than JFK. : : : :So yes, fixed costs CAN vary depending on how you size the program. : : : : Then they're not 'fixed costs'. : :By your definition then, nothing can ever be "fixed costs". : Hogwash. Go look up the real definition of 'fixed cost', which you 'cleverly' snipped. : : : See definition above. : : -- : "Some people get lost in thought because it's such unfamiliar : territory." : on't worry, a lot of people have offered you a map, you keep turning them :down. : : : --G. Behn Gee, arguing with a .sig now? The epitome of Usenet cluelessness... -- "Ignorance is preferable to error, and he is less remote from the truth who believes nothing than he who believes what is wrong." -- Thomas Jefferson |
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