The key to this module is the
decision support methodology linked to decision
support software EQUITY. The aim is to balance
factual data, engineering and management judgement
with quantitative data from other models (e.g.
eaNSF and eaFIRM). The output can then be combined
with the diverse management views implicit within
most businesses to provide robust investment options
and other initiatives linked into a coherent company
vision.
Once the model has been established
in EQUITY, it can be used to carry out sensitivity
studies, plot risk-return graphs and provides
visual representation of the decision making process.
The tool can be used in real time to produce the
order of buy (investment priorities) for a complex
portfolio of potential opportunities.
The left
hand graph below shows typical differences between
the proposed portfolio (P - the status quo), the
minimum cost portfolio that has a lower cost but
maintains the benefits (C) and the optimised benefit
portfolio that improves the benefits but does
not increase the cost (B). This graph is based
on the weighted costs and benefits of all the
available options.