The Policy Process, Part II Essay Example | Topics and Well Written Essays - 1500 words

The Policy Process, Part II - Essay Example Policy evaluation can be limited to the long term care policy to give a vivid explanation and meaning of policy evaluation. First is the assessment or judgment of quality, program effectiveness and impact of the policy. As a health care policy, the best judges on the quality of the program would be healthcare recipients. For this reason, an effective quality evaluation can be undertaken by implementing a quality assurance system. Preferably, the quality assurance system should e external; meaning that the assessment should be done by stakeholders outside the policy implementation process. A suitable example will be patients. In a pilot survey research, patients who receive treatment under the long-term care policy can be made to give their impression on the quality of the policy. Data collected in this manner can be analyzed to give policy makers a fair idea of the quality of the policy. On goal attainment evaluation, this can be left with the policy makers themselves as they are the goal setters. By definition of the strategic plan that was used in drafting the policy, policy makers should be in a policy to tell whether or not the policy has reached its goal. This assessment should, however, be done based on the timelines set for the policy. ... Data collected in this manner can be analyzed to give policy makers a fair idea of the quality of the policy. On goal attainment evaluation, this can be left with the policy makers themselves as they are the goal setters. By definition of the strategic plan that was used in drafting the policy, policy makers should be in a policy to tell whether or not the policy has reached its goal. This assessment should however be done based on the timelines set for the policy. For example if it was stated that one million people must join the policy by the end of the first year, it will be easier determining if this goal has been achieved because of the timeline and quantitative measure. Finally, assessment of the cost can be done by specially employed finance experts and consultants. The consultants will judge the cost effectiveness of the policy based on the strategic plan on cost used in drawing the policy. Analysis stage The policy analysis stage is synonymous to the evaluation stage but dif ferent in one specific way. Whereas the evaluation has the strategic plan as its focus and therefore judges only on the success of the policy, the analysis takes a step further to look into the failure of the policy as well. In the policy analysis therefore, the strategic plan is not the basis for judgment but the environmental outcome – that is how best it has influenced the world around the policy or how worse it has devastated the world around the policy. In this regard, the IEA Training Manual Module 5 (2011) explains that the policy analysis â€Å"provides baseline information, points out major linkages between decisions and environmental outcomes, and provides a starting point for consideration of more sustainable policy options.† An outstanding concept at the analysis stage

Development of the Childs Brain

Development of the Childs Brain Early Childhood Development (ECD): A step towards a better future Shamsa Amin Hussaini Gifted with countless skills and abilities, every child enters this world with a fresh, fertile, sponge-like brain, ready to be exploited. The critical years of every child begins from the conception through birth to the 8 years of age and according to developmental psychology, this is the time of significant physical, cognitive, social and emotional development for every person. Incidents and experience in these first few years of life, and even before birth leave their impressions throughout children’s life, signifying the influence of external environment on a child’s development. Dr. Hiam Ginnot says, â€Å"Children are like wet cement. Whatever falls on them makes an impression.† Therefore, these early years are said to be the best time for children to learn and should be maximized to lay a foundation of a brighter future. The explosion of research in this area of Early Childhood Development (ECD) has gained public attention and has become a topic for discus sion. Department of Elementary and Secondary Education, Missouri (2012), states that researches over the years indicate that significant short-term and long-term benefits are gained by children who participated in early education programs. Additionally, three meta-analyses of over 120 research studies indicate that around eighty percent children with ECD programs scored better on school entry as compared to those who did not experience such programs. Moreover, Tribune (2013) reveals that globally the enrolment in primary school has increased,from fifty-three percent in 1990 to eighty-one percent in 2011.This signifies the benefit of ECD children are receiving. However, there are a lot of people who are unaware of this knowledge or do not make ECD initiatives a part of their lives and eventually remain deprived of its benefits. According to UNICEF (2013), each year, 7.6 million children under the age of five die worldwide and more than two-hundred million children do not reach their full potentials. This in turn makes their countries lose approximately twenty percent of the adult productivity. Besides, in Pakistan there exist a lack of significant data and statistics about ECD implementation, however, it was reported that about 86 children every 1000 live births were reported to die in 2012 (Tribune, 2014) and no one knows how many of the living children may not have achieved their developmental milestones. Researchers have proved that a positive Early Childhood Development can open a world of possibilities and opportunities for a child but many children in Pakistan are never exposed to it. Similar to Pakistan, there are several other developing countries where children less than eight years are suffers multiple things which negatively influences their development. There could be several reasons due to which many children are unable to maximize their potentials in developing countries like Pakistan. These may include poverty, gender biasness, economic status, e thnicity, disability and poor health. All these factors prevent these innocent beings from receiving adequate nutrition, care and opportunities to learn as their environment is non-stimulating for a positive growth. Such circumstances make the poor families focus on keeping their children fed and neglecting the other cognitive, health, emotional and social needs of their children. Concurrently, researches prove that children without exposure to ECD programs lack in their social, emotional and cognitive skills. Therefore, the significance of this issue in countries like Pakistan cannot be denied. . If these children are provided with appropriate Early Childhood Development, may become a source of the country’s development in future and bring prosperity. This article aims to provide a basic understanding about Early Childhood Development, its statistics, the importance of investing in it and the ways to promote it within the society. Understanding of Early Childhood Development varies from people to people and is affected by several factors including local and family traditions, culture, national policies, schooling systems, awareness etc. However, increasing discussions about early childhood activities and development had familiarized people with the concept to some extent. ECD is not just confined to schooling and education, but, it is concerned with holistic well-being of a child. While it stresses on providing a joyful learning environment at schools, it also caters child’s health, nutrition and hygiene. ECD also entails cognitive, social, physical and emotional development. Therefore, Early Childhood Development may not just be conducted at school environment or a formal setting, it may occur at an informal setting as well, provided by anyone from governmental organizations (NGOs), governmental organizations to communities and parents. Literature reveals that the major concept behind the ECD programs is that every child is unique with different growth and developmental needs to be addressed. Moreover, ECD programs does not just develop children, it also compensates for any kind of negative influences or experiences in any aspect of life like social, emotional, nutritive, cognitive et cetera. In addition, ECD also supports Child Rights Convention, according to which every child has a right to be provided with opportunities to develop his personality and his mental and physical abilities. Scientific researchers have proved that about ninety percent of the brain develops by the age of five years and during early childhood, genetics, environment and experiences together work to build integrated circuits in the brain. Additionally, a stimulating environment, adequate nutrients and social interaction are said to be the major requirement for optimal brain development. ECD programs focus on these factors and emphasizes on providing stimulating environments to children ad meet all their needs for the betterment of their future lives. However, children’s development is often ignored in our society where they are seen as smaller versions of adults due to which advances in physical, psychological and social development remains unimportant. The normal development of children is categorized into three aspects; physical, psychological and emotional. Physically, the rate of development increases as children passes infancy. With increasing age children develop different gross and fine motor skills. As discussed earlier, both genetic and environmental factors affect the child’s normal development. Growth of a child depends on certain hormones in the body. The particular hormone responsible for physical development of a child is sensitive to environmental stressors. Environment with less stress and more care, love and stimulation favors the growth of children. Thus, environmental factors play a significant role in children’s physical development. Apart from physical, normal psychological development of children includes cognitive and emotional development. Psychologist, Jean Piaget adequately explains the cognitive development during childhood. According to him children play an active role in gaining, constructing and understanding the knowledge of the world. He developed four stages of children’s cognitive development. According to which, early cognitive development involves processes based upon actions whereas in later stages there are changes in mental operations of children. As they grow, their thinking becomes logical, abstract and their learning abilities improve. Moreover, children begin to use deductive reasoning and abstract ideas as their age increases. Also, children experience enhanced concentration, judgment and attention span with age. In addition to cognition, children also exhibit emotional development like increase in self-awareness and feeling empathy and pain. Further, children begin to appreciate the feelings and perceptions of others, contributing to their moral development. Hence, psychological development enhances children’s moral reasoning and abilities. Furthermore, children’s social development occurs as they grow and come in contact with the people around them. This aspect of their development includes relationship of child with their parents, siblings and friends. Literature underlines that early relationships with caregivers play a major role in children’s development and continue to influence social relationships throughout life. According to psychologist Albert Bandura, children learn new behaviors from people each time when they interact with their social environment. By observing the actions of others, they tend to develop new skills and acquire new information which they practice later. Also, with increasing age, children become more socially active and participate in different activities where they have hands-on experiences, helping in developing higher brain functioning. Also, children love to play different games and as they grow, they move from solitary state to playing in groups and respecting others†™ opinions. ECD is an initiative which aids the normal development of children and fulfils their developmental milestones that are related to their physical, social and emotional aspect. It also guarantees outstanding returns not just for the individual alone but for the society and the country too. Therefore, the developing countries are seen to support the idea as it provides them, a hope of overcoming the darkness of poverty and other problems. Also, literature says that learning experiences in early years of life has lasting impacts on the holistic well-being of an individual and the development missed at this stage can hardly be replaced in later life. And if replaced, it is expensive and challenging, therefore, Early Childhood Development should be focused as a preventive and secure measure for each child. Arguments exist that children have always grown up to be intelligent and reliable young adults without the benefits of an intentionally planned proper early childhood development programs. But in today’s vast and challenging world there is a need to provide children with environment of learning opportunities so that our future generation could grow up into successful people and in turn benefit our country. For the same, several initiatives have been taken at community, national and international levels. UNESCO and UNICEF are two of the several international organizations which work to close the knowledge gap and promote ECD initiatives throughout the world to improve children’s life. Furthermore, it has been observed that in developing countries, effective ECD facilities and services are available mostly to the high profile and rich areas leaving the poor deprived and dwelling in the cycle of poverty. However, there are still several governmental and NGOs working throug hout Pakistan, in urban and rural areas, to benefit the population with ECD initiatives in all aspects. Some of them are; Ali Institute of Education, Aga Khan Development Network, Children’s Global Network for Pakistan, HOPE, and PAHVNA, Health and Nutrition Development Society. Even though organizations are working to promote ECD programs in Pakistan yet, a lot needs to be done. We need to ensure that the possibilities of the world remain open to every child and this could be achieved by providing a safe stimulating environment in early childhood. Today’s children are the future of every nation; they will become tomorrow’s citizens, workers, and parents. So, society, parents and government should invest wisely in ECD initiatives as they play a vital role in preparing the younger generations for a lifetime of productivity and prosperity. Several strategies could be adapted to progress towards the goal of providing healthier learning experiences both at home and in community too. Primarily, parents need to be aware of the concept of ECD and its importance as they control their children’s life. They should be empowered to nurture their child’s development and in absence of professional ECD programs and services, parents could independently be a source of a positive early childhood development for their child by paying attention to young children’s emotional, social, cognitive and health needs. Community, governmental and NGOs could do this through informative programs, advertisements, discussions and parents’ education initiatives. Moreover, society at large needs to be educated about importance and benefits of investing in ECD programs as well. For the purpose of spreading awareness and knowledge, not just amongst parents but also for the society as a whole, media could be beneficial as it reaches out to large number of people at diverse places, belonging to different cultures, in shorter time. Besides, adopting interventions respecting the economic, social and cultural aspects of the community would make it easier for the community people to accept and practice them, ultimately promoting Early Childhood Development. For example, healthcare professionals could support parents to integrate their child-rearing practices with the recent, scientific recommended approaches to bring up their child more efficiently. Additionally, teachers should be empowered and informed about ways to blend the concept of ECD with their teaching learning practices. This could be done through training programs, supervisions, and monitoring children’s development with time. Moreover, community people could be empowered to establish low-cost community based centers in order to enhance the development of the children in the particular community. Apart from community, NGOs and government together could play a vital role in promoting ECD throughout the society. They could join hands and work in partnership to pro vide holistic ECD services to the country. Furthermore, at governmental level, policy initiatives like promoting rich learning environment for young children can provide a basis for their future productivity and success in the society. As highlighted above, low socioeconomic status is one of the factors leading to ineffective childhood development of several children in Pakistan. Therefore, there exists a need to adopt simple, cost-effective measures which could be implemented at home or anywhere to promote a healthier ECD and minimize the negative effects of the economic status. In community, ECD can be best promoted by mother, family especially grandmothers and cousins. Mothers could engage their children in different activities at home like playing with objects, singing poem, showing colorful pictures, making origami or involving children in fruits or vegetable identification. These activities can help in promoting children’s cognitive development. Also, children love to play with their grandparents, who can tell stories to the kids and play with them at free time. The more children listen to people, they improve their own language and vocabulary, so, communication and storytelling can help parents develo p language skills of their children. Moreover, parents could be trained regarding different activities they could plan for their child at home. Besides, physical development of children could be achieved though several ways including provision of proper nutrition. All in all, children’s growth and development should be a primary focus of community as well as government as these young people are the ones who will form the workforce of the country in the near future. To bring about prosperity and success, every individual needs to get active. One should start with his own home; one simple act can create a big effect. It is hoped that a better understanding about the rapidly growing concept of Early Childhood Development can ignite a thought to work for ECD of children at every level possible. Today, when the world is speedily moving ahead, there is a compelling need for the adults to choose and act wisely to create better, competitive and capable individuals within the available, limited resources in Pakistan. Therefore, make a wise decision, support and invest in Early Childhood Development programs to nurture optimal growth and development of the children in our country. References http://www.unicef.org/publications/files/Inequities_in_Early_Childhood_Development_LoRes_PDF_EN_02082012.pdf Download – national scientific council RCC http://www.successdegrees.com/inspirationalquotesaboutearlychildhoodeducationandteaching.html http://www.unicef.org/earlychildhood/index_40748.html http://nowforlater.org/files/2013/03/The-Facts.pdf http://data.worldbank.org/country/pakistan http://tribune.com.pk/story/665437/at-8-6-pakistan-is-among-countries-with-highest-infant-mortality-unicef-report/ http://books.google.com.pk/books?hl=enlr=id=sTuWAgAAQBAJoi=fndpg=PA339dq=physical+development+of+childots=rVCJYirUYrsig=uz_4SqhKfY2mRUI6sVu1E3pHxfo#v=onepageq=physical%20development%20of%20childf=false http://bernard.pitzer.edu/~dmoore/psych199s03articles/bjorklund.pdf

How to Win Friends and Influence People by Dale Carnegie Essay

How to Win Friends and Influence People by Dale Carnegie Dale Carnegie's book How to Win Friends and Influence People gives several proven methods and examples on how to succeed in the business world. The book's chapters are comprised of how to handle people, how to be a successful leader, and how to win people to your way of thinking. The preface provides several ideas and suggestions that will help the reader get the most out of the book. The author suggests that the reader keep an open mind, and also suggest some other reading materials that will also help.   Ã‚  Ã‚  Ã‚  Ã‚  The first chapter deals with how to handle people successfully. In this chapter it highlights one of the most important things you can do when dealing with people and their particular situation is to rationalize with them, meaning that to better understand were the person is coming from you must put yourself in their shoes. Every one can and will rationalize why they make the decisions they make. People like the infamous Al Capone never thought he was a bad person. He had rationalized the actions he took and the decisions he made. This is a good example to lead into the first principle, which is that no one should ever critize, complain, or condemn other people. Principe two suggests that you always give people or sincere appreciation. You shouldn?t sit and think about your own individual accomplishments and successes, but compliment others on their successes. The most important thing that others can give is their genuine appreciation. That is the key to getting w hat you want, threatening people by force or harsh words, but to get others to do what you want is to give them what they want; appreciation for their deeds. Principle three explains that most people do not care what you want. They care mostly for themselves and are not really interested in what you want. The key is to expose them on how what you want will also benefit them; it establishes eagerness and willingness in the other people. A good example of this is fishing, you don?t bait the hook with what you want to eat, you bait the hook with what the fish want. Again, thinking from the other side?s perspective.   Ã‚  Ã‚  Ã‚  Ã‚  The second part of the book discusses ways on how to get people to like you. The first step is to become genuinely interested in them. People are more apt to like you if they feel admired by you. One must inst... ... rather than themselves making there own reputation. If you give a person a good reputation they will try their hardest to live up to the expectation and Dale suggest that they will very rarely let you down.   Ã‚  Ã‚  Ã‚  Ã‚  I choose this book for my report because for one I started reading it last year but until now never had finished it. The other reason is because through out all my classes in the recreation department I have always been told of the importance of making contacts along the way. This book is an excellent tool in dealing with how to make the very best first impression, especially when the encounter might only last a few seconds. In this industry everyone is tring to get a head often times their own way. The principles in this book give detailed examples of how to work together and win people over to the ideas you have. Perhaps more importantly these techniques allow you to get ahead as a team in a industry that is so competitive. The things I have learned in this book I have already found myself in situations where I am applying Dale?s concepts. This book will be an important tool in my life and everyone in every industry should do themselves a favor and read this boo k.

Punishment for Crime should be Individualized Essay

Crime and the punishments for crimes have been the subject of debates for centuries.   When asked, most people would say that people who commit crimes should be punished for it in some way. When deciding however what kind of punishment should be given to the offender, is when the debate begins.   The reason for the debate comes about because there are significant differences in how people view punishment and what punishments should be used for different crimes. Most people struggle with the question of what kind of punishment is fair for the offender.   In the past, people have at times been treated differently for very similar crimes, this created upset among the people who cried out for equal treatment for everyone.   What those people fail to realize is that equal is not always fair.   Although some degree of structure in sentencing is needed, there should be some leeway provided in order to individualize the sentence to â€Å"make the punishment fit the specific crime†.   In order to determine what is considered fair and equal punishment, the first step is to identify what punishment is. One definition of punishment is the deliberate infliction of physical harm on an offender or his property without his consent because he is an offender, but for reasons other than self-defense (Halliday, Appendix B.).   In the legal system, punishment is inflicted upon an offender as a direct result of negative behaviors for the purpose of deterring future behaviors these are called sentences.   Different members of society however have different ideas of what kind of punishment is fair.   What some people feel is fair and just as a particular punishment for crime, others feel is cruel and inhumane.   During some eras in history, sentences for crimes were not fairly and equally handed out to all citizens.   People with higher community status were sometimes given lighter or no sentences for crimes that other people were harshly punished for.   Due to the differences in sentencing and an increasing crime rate, changes in the law and punishments were needed (Lehrer).In an attempt to make sentencing fair for everyone, President Ronald Reagan passed a Comprehensive Crime Control Bill on October 12, 1984 (Kaufman, 1). Through this, â€Å"the Sentencing Reform Act of 1984† created â€Å"The United States Sentencing Commission† which developed a set of sentencing guidelines for specific crimes.   These guidelines created mandatory sentencing for anyone who committed certain crimes, which took away all ability for the judge or jury to individualize sentences for individuals or for individual crimes (Kaufman, 1).   Although these guidelines were developed with good intentions to provide the average and underprivileged with the same rights as the wealthy, there are other factors in crimes that were not taken into consideration. It is a well known fact that not all crimes are created equal.   Murder is obviously a more serious offense than theft and should not have the same consequences and few people would argue that the consequences should be the same.   The problem of fairness becomes more of an issue when the end result of the crimes are similar.   The motive or cause of the crime however might have been completely different.   While it is easy to say that a punishment should be less severe for stealing jewels than for someone who takes a human life.   The consequences however are the same for a person who shoplifts a CD to avoid paying for it and a person who steals a can of soup to feed a starving family.   Because the end result is the same the law requires that the offenders be punished equally, but the motive in the case is quite different.   The same is true when comparing a person who commits murder over a bad drug deal compared to a woman who kills her husband after years of sufferi ng abuse.   Because the sentencing guidelines are based on the end result of the crime, motivation is not considered.   Judges are required to pass sentence based on the mandatory sentence.   Ã‚  Even over half of the Federal Judges would chose to eliminate the mandatory sentencing guidelines and 82.8 percent believe that judges would be better and more efficient at choosing the sentence for crimes (Pratt, 1). If the guidelines were eliminated or at least changed, the judges, juries or parole boards would have more freedom to take into consideration special circumstances behind the criminal behavior.   This would reintroduce the possibility for some mistakes or personal preferences, but it also allows for some leniency for crimes with less criminal motivation. The problem with mandatory guidelines has gone so far as to invade the public school system.   In schools, it is called the zero-tolerance policy.   This policy was introduced into most public schools after the shooting at the Columbine, Colorado high school and the increased number of school shootings that followed.   This policy states that any child, who brings a weapon to school, threatens to or harms other students, or indicates hostile ideation will be punished.   The punishment ranges from suspension to actual criminal charges. The premise behind the policy is to take all threats seriously.   The problem with it is that children are no longer allowed to be children.   When children get angry they often threaten them, but due to the policy children are getting suspended from school and arrested for drawing pictures of guns and for using dinnerware to peel oranges for lunch (Dart, 1).   These rules, like the mandatory sentence guidelines for adults takes all of the common sense and reason out of assigning consequences for various behaviors. In January of 2005 a Supreme Court decision provided some hope for the future of fair sentencing.   The court ruling declared mandatory guidelines unconstitutional (Edelstein, 1).   This provides the judges a little more freedom to use desertion.   The mandatory sentences are still the default sentence, but based on the circumstances surrounding the case, the judge has the right to rule outside of the guidelines if appropriate (Edelstein,1).   In these cases the judge can provide lighter sentences to people whose special situations led them to commit a crime they otherwise would not have considered. Mandatory sentences often also include parole guidelines which mandate at what point in the sentence a criminal might be eligible for parole or if parole is even an opportunity.   In cases where an inmate can not ever be eligible for parole, there is very little motivation for the person to use positive behavior while incarcerated.   The person in these cases have no hope of getting a reduced sentence because of merits accomplished while in prison.   By providing the judges to choose the sentence, parole can be made more of an option to motivate criminals to choose rehabilitation instead of continuing to have problems during the time in prison.   This would help lead to more people successfully being rehabilitated.   By providing more inmates the opportunity for reduced sentences and rehabilitation, there would be significantly less of a problem with prison overcrowding. Although the guidelines for sentencing were created to make the legal system and criminal punishments fairer for everyone, they have gone to the extreme and are now causing harm to some people.   A legal system that provided special treatment for the rich and famous was wrong, but a legal system that requires horribly abused women to undergo the same sentence as a child killer is just as wrong.   There should be some basic guidelines, but at the same time there should be provisions in which the motive of the crime and the background behind the crime should be taken into consideration.   There is no such thing as a â€Å"cookie cutter† crime and there should not be uniform punishments to for the crimes. Every person is individual and when an individual commits a crime, a little time needs to be taken to determine the best and most effective punishment for that crime.   Some people would benefit more from community service or therapy than being put in jail.   Prison in many cases proves only to harden people and makes a person less likely to be able to adequately adapt to society upon returning to it.   Parents who have more than one child do not discipline all of the children in the same way for similar behaviors, because different consequences are more effective for different people.   Based on this fact, the sentencing guidelines need to be re-examined and adapted to be sure that the best possible consequence is given for each individual and each offense.   Works Cited Edelstein, Jonathan. â€Å"Sentence Structure† 31 August 2005 26 February, 2008. Dart, Andrew. â€Å"Zero Tolerance vs. Common Sense† 19 December 2008. 25, February 2008 Lehrer, Eli. â€Å"Soft Cell†. 9 June, 2003. 25, February 2008 < AEI – Short Publications> Pratt, Robert. â€Å"Senseless Sentencing: a Federal Judge Speaks Out†. 10 January 1999.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Des Moines Register.   25, February 2008 Halliday,Roy. â€Å"What Good is Punishment?† 1 January 2003. Appendix B. What good is punishment> Kaufman, Shari. â€Å"The Federal Sentencing Guidelines: A Formulaic and Impersonal Approach to Dispensing Justice†. (1999) the Federal Sentencing Guidelines: A Formulaic and Impersonal Approach to Dispensing Justice

Comparison of Indirect Cost Multipliers for Vehicle Manufacturing Essay

This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor The University of Chicago, nor any of their employees or officers, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of document authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof, Argonne National Laboratory, or The University of Chicago. COMPARISON OF INDIRECT COST MULTIPLIERS FOR VEHICLE MANUFACTURING INTRODUCTION In the process of manufacturing and selling vehicles, a manufacturer incurs certain costs. Among these costs are those incurred directly as a part of manufacturing operations and those incurred indirectly in the processes of manufacturing and selling. The indirect costs may be productionrelated, such as R&D and engineering; business-related, such as corporate staff salaries and pensions; or retail-sales-related, such as dealer support and marketing. These indirect costs are recovered by allocating them to each vehicle. Under a stable, high-volume production process, the allocation of these indirect costs can be approximated as multipliers (or factors) applied to the direct cost of manufacturing. A manufacturer usually allocates indirect costs to finished vehicles according to a corporation-specific pricing strategy. Because the volumes of sales and production vary widely by model within a corporation, the internal corporate percent allocation of various accounting categories (such as profit or corporate overhead) can vary widely among individual models. Approaches also vary across corporations. For our purposes, an average value is constructed, by means of a generic representative method, for vehicle models produced at high volume. To accomplish this, staff at Argonne National Laboratory’s (ANL’s) Center for Transportation Research analyzed the conventional vehicle cost structure and developed indirect cost multipliers for passenger vehicles. This memorandum summarizes the results of an effort to compare and put on a common basis the cost multipliers used in ANL’s electric and hybrid electric vehicle cost estimation procedures with those resulting from two other methodologies. One of the two compared methodologies is derived from a 1996 presentation by Dr. Chris Borroni-Bird of Chrysler Corporation, the other is by Energy and Environmental Analysis, Inc. (EEA), as described in a 1995 report by the Office of Technology Assessment (OTA), Congress of the United States. The cost multipliers are used for scaling the component costs to retail prices. ANL METHODOLOGY The ANL methodology described here is based on an analysis concerned with electric vehicle production and operating costs (Cuenca et al. 2000; Vyas et al. 1998). The analysis evaluated the cost structure for conventional vehicle manufacturing and retailing and assigned shares of the manufacturer’s suggested retail price (MSRP) to various cost contributors. Multipliers developed from the ANL methodology are applied to the manufacturing cost of an individual component in order to scale the component cost to the retail price. Several cost contributors are included in the methodology, as summarized in Table 1. Some of the vehicle components for electric and hybrid electric vehicles would be procured from outside suppliers. This assumption is applied to electric drive components, excluding the battery; the vehicle manufacturer would produce the rest. Thus, two cost multipliers, one for the components manufactured internally and the other for outsourced components, are necessary to estimate the price of electric and hybrid electric vehicles. Outside suppliers would incur some of the costs normally borne by the vehicle manufacturer. In the ANL methodology, we assume that the costs of â€Å"Warranty,† â€Å"R&D/Engineering,† and â€Å"Depreciation and Amortization† are borne by the Page 1 suppliers of outsourced components. The outside suppliers would include these costs in their prices. The following two cost multipliers are computed by using â€Å"Cost of Manufacture† as the base: Cost multiplier for components manufactured internally = 100/50 = 2. 00. Cost multiplier for outsourced components = 100/(50 + 6. 5 + 5. 5 + 5) = 1. 50. Table 1 Contributors to Manufacturer’s Suggested Retail Price in ANL Methodology Cost Category Cost Contributor Relative to Share of Cost of Vehicle MSRP Manufacturing (%) Vehicle Manufacturing Cost of Manufacture 1. 00 50. 0 Production Overhead Warranty 0. 10 5. 0 R&D/Engineering 0. 13 6. 5 Depreciation and Amortization 0. 11 5. 5 Corporate Overhead Corporate Overhead, Retirement and 0. 14 7. 0 Health Selling Distribution, Marketing, Dealer 0. 47 23. 5 Support, and Dealer Discount Sum of Costs 1. 95 97. 5 Profit Profit 0. 05 2. 5 Total Contribution to 2. 00 100. 0 MSRP METHODOLOGY DERIVED FROM BORRONI-BIRD PRESENTATION In his presentation, entitled â€Å"Automotive Fuel Cell Requirements,† at the 1996 Automotive Technology Development Customers’ Coordination Meeting, Borroni-Bird included charts on the â€Å"Typical American Automobile: Price/Cost Breakdown. † The charts provided a graphical breakdown of vehicle price, showing cost contributors and profit. We used the charts to arrive at percentage shares of vehicle price by various contributors. Table 2 shows the resulting allocation. Page 2 Table 2 Price/Cost Breakdown Based on Borroni-Bird Presentation Cost Category Cost Contributor a Vehicle Manufacturing Fixed Cost Selling Sum of Costs Profit MSRP a Material Cost Assembly Labor and Other Manufacturing a Costs Transportation/Warranty Amortization and Depreciation, Engineering R&D, Pension and Health Care, Advertising, and Overhead Price Discounts Dealer Markup Automobile Profit. Relative to Cost of Vehicle Manufacturing 0. 87 0. 13 0. 09 0. 44 Share of MSRP (%) 42. 5 6. 5 4. 5 21. 5 0. 10 0. 36 1. 99 0. 06 2. 05 5. 0 17. 5 97. 5 2. 5 100. 0 These two contributors are scaled to sum to 1 in the third column, as in Table 1. In his presentation, Borroni-Bird did not evaluate the treatment of in-house or outsourced components. His methodology does not lend itself to easy computation of cost multipliers comparable with those in the ANL methodology, unless we make a few assumptions. We have assumed that â€Å"Material Cost,† taken together with â€Å"Assembly Labor and Other Manufacturing Costs,† would form the â€Å"Vehicle Manufacturing† base for the in-house components. The costs of â€Å"Transportation/Warranty,† â€Å"Amortization and Depreciation,† and â€Å"Engineering R&D† would be borne by the suppliers of outsourced components. However, â€Å"Amortization and Depreciation† and â€Å"Engineering R&D† costs were merged with â€Å"Pension and Health Care,† â€Å"Advertising,† and â€Å"Overhead† costs by Borroni-Bird. We assumed that half of the costs under this category would be borne by the suppliers of outsourced components. Our assumptions led to the following cost multipliers: Cost multiplier for components manufactured internally = 100/(42. 5 + 6. 5) = 2. 05. Cost multiplier for outsourced components = 100/(42. 5 + 6. 5 + 4. 5 + 10. 75) = 1. 56. These cost multipliers are very similar to those computed with the ANL methodology. Comparison of ANL and Borroni-Bird Methodologies The information from Tables 1 and 2 is shown in terms of cost categories in Table 3. Both methodologies use vehicle manufacturing cost as the base and add other costs to it. The share of MSRP attributable to â€Å"Vehicle Manufacturing† is 50% in the ANL methodology, compared with 49% in the Borroni-Bird Methodology. Borroni-Bird combined several cost contributors under â€Å"Fixed Cost. † These contributors include (see Table 2) â€Å"Amortization and Depreciation,† â€Å"Engineering R&D,† â€Å"Pension and Health Care,† â€Å"Advertising,† and â€Å"Overhead. † Except for the inclusion of â€Å"Advertising,† â€Å"Production Overhead† and â€Å"Corporate Overhead† in the ANL methodology can be combined to form an equivalent category. ANL’s total of 24% by production Page 3. and corporate overheads is slightly lower than the total of 26% by Borroni-Bird. The ANL category of â€Å"Selling,† which includes â€Å"Distribution,† â€Å"Marketing,† â€Å"Dealer Support,† and â€Å"Dealer Discount,† is broader than that of â€Å"Price Discounts† and â€Å"Dealer Markup† specified by BorroniBird, and this category’s contribution is understandably slightly higher in the ANL methodology. The share of MSRP by â€Å"Profit† is the same in both methodologies. The absolute differences, computed as ANL value minus Borroni-Bird value, are 1% for â€Å"Vehicle Manufacturing,† –2% for â€Å"Fixed Cost,† and 1% for â€Å"Selling† cost. Table 3 Comparison of Vehicle Price/Cost Allocation by ANL and Borroni-Bird Methodologies ANL Methodology Cost Contributor or Category Vehicle Manufacturing Production Overhead Corporate Overhead Selling Sum of Costs Profit MSRP EEA METHODOLOGY The methodology of Energy and Environmental Analysis is summarized in the OTA report OTAETI-638, entitled Advanced Automotive Technology: Visions of a Super-Efficient Family Car, published in September 1995. The values of some cost contributors are not listed in the report. Moreover, depreciation, amortization, and tooling expenses are assumed to be case-specific and therefore must be computed for each case. In order to make the EEA and ANL methodologies comparable, some assumptions were necessary. These assumptions are described in the summary below. The EEA cost equations can be simplified as follows: Cost of Manufacture = Division Cost ? [1 + Division Overhead] Manufacturer Cost = [Cost of Manufacture + Assembly Labor + Assembly Overhead] ? [1 + Manufacturing Overhead + Manufacturing Profit] + Engineering Expense + Tooling Expense + Facilities Expense Retail Price Equivalent = Manufacturer Cost ? [1 + Dealer Margin] Borroni-Bird Methodology Share of Cost Contributor or Category Share of MSRP (%) MSRP (%) 50. 0 Vehicle Manufacturing 49. 0 17. 0 Fixed Cost 26. 0 7. 0 23. 5 Selling 22. 5 97. 5 Sum of Costs 97. 5 2. 5 Automobile Profit 2. 5 100. 0 MSRP 100. 0 Page 4 The report lists the following values for overhead, profit, and dealer margin: Division Overhead = Supplier Overhead = 0. 20 (We assume that division and supplier overheads are equal; only the supplier overhead is given in the report. ) Manufacturing Overhead = 0. 25 Manufacturing Profit = 0. 20 Dealer Margin = 0. 25 Because the documentation in the OTA report does not provide values for â€Å"Assembly Labor,† â€Å"Assembly Overhead,† â€Å"Engineering Expense,† â€Å"Tooling Expense,† and â€Å"Facilities Expense,† cost multipliers cannot be computed directly from these data. The â€Å"Assembly Labor† and â€Å"Assembly Overhead† share of MSRP is 6. 5% in Borroni-Bird’s presentation. The engineering, tooling, and facilities expenses can be taken as the sum of â€Å"R&D/Engineering† and â€Å"Depreciation and Amortization† from the ANL methodology, at 12% of the MSRP. In deriving the division cost and price relationship below, we use the term Retail Price Equivalent (RPE) from the OTA report instead of MSRP. The RPE can be computed as follows: RPE = = = {[Division Cost ? 1. 2 + 0. 065 RPE] ? 1. 45 + 0. 12 RPE} ? 1. 25 Division Cost ? 2. 175 + 0. 268 RPE Division Cost ? 2. 175/(1 – 0. 268) = Division Cost ? 2. 97 Putting ANL and EEA Methodologies on a Common Basis As it was described in the OTA report, the EEA methodology did not provide enough data to compute the cost multipliers. We assumed some cost shares to be the same between the EEA, Borroni-Bird, and ANL methodologies while developing the above relationship between Division Cost and RPE. The EEA methodology is based on the material and labor costs of a division of the vehicle manufacturer, with other costs added on. The ANL methodology evaluates an assembled vehicle, using the vehicle manufacturing cost as the base cost. The ANL methodology also assigns additional costs to the outsourced components, whereas the treatment of such components is not clear in the EEA methodology. We have attempted to develop a common basis for the ANL and EEA methodologies by assigning shares of the final vehicle price, RPE in the EEA methodology, to individual cost categories similar to those listed in Table 1. Table 4 presents such a summary for the EEA methodology. Three cost contributors, â€Å"Division Cost,† â€Å"Division Overhead,† and â€Å"Assembly Labor and Overhead,† are combined under the â€Å"Vehicle Manufacturing† category. Two cost contributors, â€Å"Manufacturing Overhead† and â€Å"Engineering, Tooling, and Facilities Expenses,† combine to form the â€Å"Overhead† category. The â€Å"Dealer Margin† in the EEA methodology represents a factor applied to all manufacturer costs and profit. We assumed that this factor represents all costs of selling the vehicle. Although the profit is computed at the manufacturing level by EEA, we moved the profit to the bottom of the table to be consistent with prior tables. The cost allocation in Table 4 allows us to compute the in-house components cost multiplier as follows: Cost multiplier for in-house components = 100/(33. 7 + 6. 7 + 6. 5) = 2. 14 Page 5 To compute the cost multiplier for an outsourced component, one more assumption is necessary. In the ANL methodology, we assumed that the supplier will bear the costs of â€Å"Warranty,† â€Å"R&D Engineering,† and â€Å"Depreciation and Amortization. † However, the EEA methodology does not identify the warranty cost separately. We assumed it to be half of â€Å"Manufacturing Overhead† at 5. 05%. This, with the earlier assumption related to â€Å"Engineering, Tooling, and Facilities Expenses,† led to the following computation: Cost multiplier for outsourced components = 100/(33. 7 + 6. 7 + 6. 5 + 5. 05 + 12) = 1. 56 These multipliers, adapted from our extension of the EEA information on vehicle costs, are very close to those derived from the ANL and Borroni-Bird methodologies. Table 4 Contributors to Retail Price Equivalent in EEA Methodology Cost Category Cost Contributor a Vehicle Manufacturing Overhead Selling Sum of Costs Profit Manufacturing Profit Total Contribution to RPE a Division Cost a Division Overhead Assembly Labor and a Overhead Manufacturing Overhead Engineering, Tooling, and Facilities Expenses Dealer Margin Relative to Cost of Vehicle Manufacturing 0. 72 0. 14 0. 14 0. 22 0. 26 0. 49 1. 97 0. 17 2. 14 Share of RPE (%) 33. 7 6. 7 6. 5 10. 1 12. 0 22. 9 91. 9 8. 1 100. 0 These three cost contributors are scaled to sum to 1 in the third column, as in Table 1. Comparison of ANL and EEA Methodologies The information from Tables 1 and 4 is presented in terms of cost categories in Table 5 for easy comparison. The â€Å"Vehicle Manufacturing† cost share is 46. 9% in the EEA methodology, compared with 50% in the ANL methodology. EEA’s RPE share of 22. 1% by overhead is lower than the ANL value of 24%. The cost of selling is 22. 9% in the EEA methodology, which is close to the ANL value of 23. 5%. The largest difference is in the RPE share by profit, which is 8. 1% in the EEA methodology, more than three times the ANL value of 2. 5%. According to Economic Indicators: The Motor Vehicle’s Role in the U. S. Economy (American Automobile Manufacturers Association 1998), the average net income before taxes for the three domestic manufacturers was 3. 9% during 1994-1997. Aside from vehicle sales, this value (3. 9%) includes income from spare parts sales and vehicle financing. Thus, the profit share appears very high in the EEA methodology. The absolute differences – computed as ANL value minus EEA value – are 3. 1% for component/material cost, 1. 9% for overhead, 0. 6% for selling, and –5. 6% for profit. Page 6 Table 5 Comparison of Price Allocation by ANL and EEA Methodologies ANL Methodology Cost Contributor or Category Vehicle Manufacturing Production Overhead Corporate Overhead Selling Sum of Costs Profit MSRP SUMMARY An attempt to put three methodologies for automobile cost allocation on a common basis is presented in this technical memorandum. This comparison was carried out to verify the reasonableness of the cost multipliers used in ANL’s cost models for electric vehicles and hybrid electric vehicles. When put into a common format, by means of certain assumptions, the three approaches yielded the cost multipliers provided in Table 6. Table 6 Summary of Cost Multipliers Computed on a Common Basis Multiplier for In-House Components Outsourced Components ACKNOWLEDGMENT Funding for the analysis presented here was provided by the Planning and Assessment function of the Office of Transportation Technologies of the U. S. Department of Energy, managed by Dr. Philip Patterson. This technical memorandum is produced under U. S. Government contract No. W-31-109-Eng-38. REFERENCES American Automobile Manufacturers Association, 1998, Economic Indicators: The Motor Vehicle’s Role in the U. S. Economy, Detroit, Mich. Borroni-Bird, C. , 1996, â€Å"Automotive Fuel Cell Requirements,† Proceedings of the 1996 Automotive Technology Development Customers’ Coordination Meeting, U. S. Department of Energy, Office of Transportation Technologies, Washington, D. C. ANL 2. 00 1. 50 Borroni-Bird 2. 05 1. 56 EEA 2. 14 1. 56 EEA Methodology Share of Cost Contributor or Category MSRP (%) 50. 0 Vehicle Manufacturing 17. 0 Overhead 7. 0 23. 5 Selling 97. 5 Sum of Costs 2. 5 Profit 100. 0 RPE Share of RPE (%) 46. 9 22. 1 22. 9 91. 9 8. 1 100. 0 Page 7 Cuenca, R. M. , L. L. Gaines, and A. D. Vyas, 2000, Evaluation of Electric Vehicle Production and Operating Costs, Argonne National Laboratory Report ANL/ESD-41, Argonne, Ill. (to be published). Vyas, A. , R. Cuenca, and L. Gaines, 1998, â€Å"An Assessment of Electric Vehicle Life Cycle Costs to Consumers,† Proceedings of the 1998 Total Life Cycle Conference, SAE International Report P339, Warrendale, Penn. , pp. 161-172.