Ventana software support forum

Hello everyone,

I will be thankful to anyone who would like to review my model and give
me some hints / recommendations. I am doing it as part of one of
the projects of the company for which I work.

I have a model that is supposed to forecast the future sales of an
automobile battery company in presence of competition. The company
of interest called Sigma is right now importing the elements of these
batteries but the model assumes that if these elements are produced
locally (instead of importing) then the company will reduce its unit
costs of production. To realize this it will have to acquire some
capacity (new equipment) that it will get via a bank credit line.

At this time the model is very basic and there are few dynamic feedback
loops. But before going farther I would like to hear advice. There
are 2 sectors already modeled : the market and the finance modules of
Sigma. The accounting used is that proper to the country Algeria whichd
may be different from other countries.

You will remark that some variables are constant which I did purposely
just to minimize the starting errors and "control" the modelling
process.

I attached the Vensim model "Salima101FL6".

Thanks a lot and please do not hesitate to ask questions!
Salima

I took the liberty of checking out your model, since I have some accounting issues myself.
I see you have the same problem with roundoffs in the calculation of Annuities. Another way to calculate these is:
If then else (Outstanding balance >100, Initial outstanding balance/Years of reimbursement, 0)
This way a delay in payment is much easier to implement.

Minor item:
Workforce cost = Total wage * (1 + Percent of the Charge)
Saves a variable, not really important, but my model is getting quite big, so any saving I consider a good thing

Beware of the Taxes! In this situation there is no danger, but if the company would make a loss in one time step, too much taxes would be payed.
I made the yearly benefits a stock in which the Gross operating income would flow. At the end of the year the taxes for that year are calculated (using modulo (time/1) = 0) Also the outflow is activated at this time to make the start position zero again (reset = if then else (modulo (time/1) = 0, Year income/time step, 0)

I don't know if there is any carry foreward/carry back for tax-system (allowing you to level profits with losses), but this can be implemented much easier this way.

Good luck.

Thanks a lot Pruyn for your comments about my model; I will include them in the model and good luck for yours!

Salima