Post on 11-Jan-2016
transcript
Resources for veterinary work
Henk Hogeveen
Jonathan Rushton
This presentation was developed within the frame of the NEAT project, funded with support from the European Commission under the Lifelong Learning Programme (Grant no. 527 855). Please attribute the NEAT network with a link to www.neat-network.eu. Except where otherwise noted, this presentation is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
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Learning objectives
In the next 45 minutes we will examine:
What resources are? Which resources are available to the veterinarian and their clients How resources are valued and how this relates to their availability in
society
You will be given information to help understand these different issues and an exercise to reinforce your understanding of the information.
Chapter 4
What are resources?
Resources things that can be used to generate a “benefit”
They can include:
Physical items – such as land, water Human time – could be as labour or it can be intellectual Specialised equipment – for example an X ray machine in a
veterinary practice ………
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Chapter 4
Definition 1: Cost factors
Land: includes renewable (forests) and non-renewable (minerals) resources
Labour: all owner and hired labor services, excluding management
Capital: necessary for manufactured goods such as fuel, chemicals, tractors and buildings
Management: production decisions designed to achieve specific economic goal
Chapter 4
Use of resources
When we work we mix (manage) resources into products (good and services)
When we relax we use resources to gain pleasure (that is the “product”)
Our goods and services are core to what we want to achieve in terms of improving animal health and welfare
They are also core to what the clients need to use to obtain benefits from their animals, that can either be monetary benefits from a food animal excitement from a sport animal comfort and love from a pet pleasure from wild animals
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Chapter 4
What are resources? Classroom input
Help me with examples of resources for
A veterinary practise A farmer A citizen
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Chapter 4
Transferring resources into products (veterinarian)
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Resources•Labour
•Land
•Capital
Products-Drugs-Advice-Surgery-Diagnostics-Feed-……..
Chapter 4
Transferring resources into products (farmer)
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Resources•Labour
•Land
•Capital
Products-Milk-Eggs-Meat-Animals-Wool-……..
Chapter 4
Transferring resources into products (citizen)
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Products-Pleasure-Feeling good-……..
Chapter 4
Your products are a resource for your clients
They have to see the value of your products
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Chapter 4
Value
Value (economic definition): “something” has value when it contributes to fulfillment of goals/needs
As a business
As a person
Goals/needs differ between persons
If you had a veterinary practise, what would be the goal of your practise?
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Chapter 4
Value
Value (economic definition): “something” has value when it contributes to fulfillment of goals/needs
As a business (profit maximisation, shareholder value maximisation, utility)
As a person (utility)
Goals/needs differ between persons
If you had a veterinary practise, what would be the goal of your practise?
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Chapter 4
So…
If a product adds much to reach your goal, you give it a high value
Thus you are willing to pay much for it
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But… You may not have enough resources to reach your goal completely (maximum utility)
Scarcity
Choices
Chapter 4
What is scarcity: an example
Free resources vs scarce resources
E.g., River
Few people: water is free More people: water is scare Choices have to be made Water for drinking Water for industry Etc. Economic scarcity ≠ shortage
Chapter 4
What are costs?
Costs exist if “something” is used that has value and is scarce
Opportunity costs: the lost value if you had used that resource for the second best purpose.
Chapter 4
Costs ≠ expenditures
We have not talked (yet)about money
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Chapter 4
Definition 2: Fixed and variable costs
Total costs = fixed costs + variable costs Fixed costs
Determined by production capacity (land, buildings, machines, labour) and do not vary with the level of production
Variable costs
Costs vary with the level of production, within a certain production capacity
Chapter 4
Variable costs
Feed
Drugs
Materials for diagnostic equipment
…....
Chapter 4
Rule of thumb When production level changes, the
fixed costs remain the same and variable costs change
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Nr of produced units
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returns
Consequences? [1]
Consequences? [2]
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fixed costs
Consequences? [3]
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Fixed costs
Variable costs
Break even point
Chapter 4
But:
Rule off thumb: with increasing production, the fixed costs remain the same.
There is a maximum. At a certain moment you have to increase fixed costs: large step.
Quasi-fixed costs
Chapter 4
Definition 3: Types of costs
Payments
Depreciation
Interest
Chapter 4
Depreciation
Compare with savings for replacement
Calculation (linearity principle):
Replacement (or purchase) value (A) Lifespan (n) Rest value (R) (A - R)/n
Linear depreciationA = 20.000
R = 5.000
N = 10
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Chapter 4
Interest
Determined by:
Value of assets Price of capital (%) Interest may differ:
Short term: 7 % Long term (mortgage): 5 % Land: 2 % Not only paid interest
Calculated over everything (opportunity costs)
Interest fixed assets
Varying over timeAverage: (A-R)/2 * r
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Chapter 4
In summary
Basic resources: labour, land, capital
Management mixes these resources to produce products
In such a way to maximal fulfill goals/needs A product that is important in reaching the goal has a high value
Products of a veterinarian are resources for clients
There are fixed costs and variable costs
There are different types of costs: payments, depreciation and interest
Costs ≠ expenditures (at least not always)
Contact
Henk Hogeveen
Wageningen University
Henk.Hogeveen@wur.nlhttp://www.neat-network.eu
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