Total Contribution Margin Research Articles

Analisis Cost Volume Profit Sebagai Dasar Perencanaan Laba Yang Diharapkan

Cost Volume Profit Analysis as a Basis for Expected Profit Planning (Case Study of Privately Owned Business "Ifamoy Home Industri"). Under the guidance of A company needs profit planning to help management determine the level of profit it wants to obtain, with Cost Volume Profit analysis which focuses on various factors that influence changes in profit components at the Ifamoy Home Industry company. This research aims to determine the application of Cost Volume Profit Analysis in the Ifamoy Home Industry. This research uses descriptive research. The data collection technique used is the Observation and Documentation Technique on existing income data at Ifamoy Home Industry. The results of this research show that the Total Calculation Profit is IDR. 828,000,0000.00, with a total Contribution Margin of IDR. 1,670,000,000 with a ratio of 0.8%, with a Total Break Even Point of Rp. 512,000,000, with a total margin of safety of Rp. 1,568,000,000, with a ratio of 75%, with profit planning to increase by (20%) in 2023 resulting in a profit of Rp. 2,508,200,000.

How to determine temporal yield variances of various cropping systems for modelling farmers’ production risk – Illustrated by results from a long-term field trial

When making choices among different cropping systems like conventional farming, organic farming or cropping systems without pesticides, but with mineral fertilizers, risk averse farmers will not only account for expected (i.e. average) farm income but also for income stability. The smaller the variance of a farm’s total contribution margin, the more stable is the income from a cropping system. The overall income variance can be calculated and included in quadratic risk programming models that apply the expected value-variance criterion when temporal (co-)variances of the contribution margins of the single crops are known. In this context, there is a lack in empirically well-founded approaches to identify the latter. Thus, taking a single farmer’s perspective, we first outline a way to derive temporal (co-)variances of contribution margins for crops grown at one location. Second, neglecting variances of crop prices and variable costs, we show for different cropping systems how to consistently estimate temporal crop yield (co-)variances based on available yield data from a long-term field trial by the Julius Kühn-Institut in Dahnsdorf (Germany). The four cropping systems were (b1) without fertilizer and pesticides; (b2) without fertilizer but with pesticides; (b3) with fertilizer but without pesticides; and (b4) with fertilizer and pesticides. For each system, we estimated a covariance matrix for yield data of winter rye, winter barley and pea grown from 1998 to 2021 using a mixed effects model. Moreover, we calculated means, standard deviations and coefficients of variation for the different crop yields. The size of the (co-)variances found is a valuable indicator for their order of magnitude to be used as input in quadratic risk programming with the intention of optimizing a cultivation program that accounts for individual farmers’ preferred levels of risk. Further, our statistical approach should be applied to other long-term field experiments to get deeper insights into average yield level and (co-)variance structures of crops grown in different cropping systems.

The Bottom Line: Trauma Center Viability During COVID-19

IntroductionThe COVID-19 pandemic was a potential threat to the viability of trauma centers and health systems in general. We sought to answer the question of how COVID-19 was associated with patient characteristics as well as trauma center volume, finances, and viability. MethodsWe reviewed 6375 patients admitted to our verified Level 1 trauma center during two time periods: pre-COVID (February 2019-February 2020) and COVID (March 2020-March 2021). Three thousand ninety-nine patients were admitted pre-COVID and 3276 were admitted during COVID. Data including case-mix index (CMI), total contribution margin, insurance status, age, race, gender, ethnicity, and injury mechanism were collected from the trauma registry and finance databases and analyzed. A P < 0.05 was considered significant. ResultsTrauma admissions decreased initially during COVID but returned to and ultimately surpassed admission trends pre-COVID. Trauma revenue and patient acuity increased significantly along with a decrease in the number of underinsured patients during COVID. When evaluating all service lines, the trauma center was the highest contributor to overall hospital revenue. ConclusionsDespite a decrease in admissions for other service lines and a pause in elective surgeries during the pandemic, the trauma center remained unaffected. In addition, trauma was the most significant contributor to the bottom line of the health system. These findings underscore the need to maintain and even increase trauma center resources and staffing to ensure that optimal care is provided to critically ill and injured patients.

S1002 Integration of Endoscopic Submucosal Dissection in a Hospital-Based Practice: A Financial Review

Introduction: Endoscopic submucosal dissection (ESD) is a novel, minimally invasive method for the removal of malignant and premalignant gastrointestinal lesions. Literature has been published establishing the safety and efficacy of ESD and its potential as a replacement for invasive surgery in some patients. Due to a lack of procedure-specific Current Procedural Terminology (CPT) codes many hospitals are challenged with adopting this intricate procedure in a cost-effective manner. The aim of this study was to evaluate the financial metrics from our first three years of ESD practice and gain insight into how to provide this service more cost-effectively. Methods: Financial data was reviewed from ESDs performed at our tertiary care center from 4/2018 to 3/2021 including insurance status, direct costs, charges per case, payments per case, and contribution margin. Pearson’s correlation test was utilized to assess whether charges, payments, and margins correlated within the cohort. Results: A total of 57 procedures were included, of which 7 were performed inpatient (12.2%) and 50 were outpatient (87.8%). Eleven [19.3%] had commercial insurance, 4 [7.0%] had Medicaid, 34 [59.6%] had Medicare, 4 [7.0%] had federal assistance, and 4 [7.0%] utilized a local repayment assistance program. Total charges [median, range] were $1,718,349 [$17,364, $249,687]. Total direct costs were $409,572 [$4,682, $57,446]. Total payments were $217,488 [$1,199, $50,138]. The total contribution margin was -$183,024 [-$3,334, $21,269]. Increasing charges and costs were associated with increased institutional payments while none were associated with contribution margins. Conclusion: The data depicts an overall net loss for nearly all performed ESDs. Notably, only four of the 57 ESDs yielded a positive contribution margin with three of the most recent seven ESDs netting an average of $6,538 per case. This potentially indicates increased financial viability as more experience was gained with both performing and billing ESDs. Standard deviations exceeded the mean in all fields, indicating a significant degree of variability between procedures. Until standardized CPT codes are established, ESD must be undertaken with a cost-conscious and outcomes-focused mindset to reduce institutional losses.Figure 1.: Top: Depicts relation between costs per case in relation to payments showing a strong correlation. Bottom Left: Relation between charges per case and contribution margin (CM). Bottom Right: Relation between payments per case and CM. It is notable that both bottom figures do not have statistically significant correlations. However, if outliers are not considered, there appears to be a clear negative trend in CM with increasing charges and costs per case.

Medicare reimbursement of lower extremity bypass does not cover cost of care for most patients with critical limb ischemia

ObjectiveLower extremity bypass surgery remains an important treatment option for patients with critical limb ischemia (CLI), but is resource intensive. We sought to evaluate the cost and Medicare reimbursement for lower extremity bypass surgery in patients with CLI. MethodsHospital cost accounting systems were queried for total technical and professional costs incurred and reimbursement received for patients with CLI undergoing lower extremity bypass at our center between 2011 and 2017. Patients were identified by assignment to Diagnosis-Related Group (DRG) 252, 253, or 254 (other vascular procedure with major complication/comorbidity, with complication/comorbidity, and without complication/comorbidity, respectively). Additional clinical data were incorporated from the Vascular Quality Initiative clinical registry. For non-Medicare patients, reimbursement was indexed to Medicare rates. Contribution margins (reimbursement minus cost) from technical and professional services were analyzed for each patient and summarized by DRG. We compared technical, professional, and total costs; reimbursement; and contribution margins across DRGs using univariate statistics and evaluated factors associated with total contribution margin using median quantile regression. ResultsWe analyzed 68 patients with hemodynamically confirmed CLI (46% rest pain, 54% tissue loss), of whom 25% received a prosthetic graft. Mean age was 66.1 ± 11.6 years, 69% were male, 49% diabetic, 44% current smokers, and 4% on dialysis. In general, total infrainguinal bypass cost was adequately compensated for patients assigned only the most complex DRG 252 (median, $2490; interquartile range [IQR], −$1,621 to $10,080). In the majority of patients with less complex DRG 253 (median, −$3,100; IQR, −$8499 to $109) and DRG 254 (median, −$4902; IQR, −$9259 to $1059), reimbursement did not cover the cost of care. Both technical costs and professional costs varied significantly with the complexity of DRG. Although reimbursement from technical services increased alongside increasing complexity of DRG, there was insignificant variation in professional reimbursement as DRG complexity increased. On multivariable modeling, longer length of stay (−$2547 per additional day) and preoperative dialysis (−$5555) were significantly associated with negative margins. ConclusionsFor the majority of patients with CLI, current Medicare reimbursement does not adequately cover the cost of providing care after open bypass surgery. As commercial insurers move toward Medicare reimbursement rates, more granular risk stratification profiles are needed to ensure open surgical care for patients with CLI remains financially sustainable.

ФАКТОРНИЙ АНАЛІЗ В УПРАВЛІННІ ДОХОДНІСТЮ ПІДПРИЄМСТВ ГОТЕЛЬНОГО БІЗНЕСУ

У статті досліджено категорійний апарат управління доходами підприємств готельного бізнесу, зокрема поняття «управління доходністю» та «управління доходами». Визначено, що управління доходністю готелів є складовою частиною системи управління доходами. Виділення управління доходністю пов’язано з тим, що продаж номерів є основним джерелом формування доходів у готельному бізнесі. Але основною причиною такого виокремлення є те, що доходи від продажу номерів є доходами від фіксованого, обмеженого в часі ресурсу. В готельному бізнесі управління доходністю збалансовує тривалість перебування гостей та попит, маніпулюючи ціною і часом споживання. Таке балансування досягається шляхом використання специфічних методів управління. Застосування різних цінових стратегій, методів стимулювання попиту потребує не лише констатації їхньої дієвості, але й всебічної оцінки ступеня впливу змінних факторів у результаті застосування цих методів управління на формування доходності номерного фонду. Дослідження наукової літератури з аналітичного забезпечення управління доходністю готелів показали, що висвітлення цього питання має фрагментарний характер. З метою проведення аналітичної оцінки факторних впливів у процесі управління доходністю готельного бізнесу запропонована модель факторного аналізу, яка включає маржинальний дохід за проданий номер певного типу, кількість проданих номерів та їхню структуру. У статті проведено аналіз впливу зазначених факторів на основі запропонованої моделі на гіпотетичному прикладі готелю з чотирма типами номерів. Застосування такого підходу дає змогу визначити кількісний вплив розміру маржинального доходу від номера, кількості проданих номерів та їхньої структури на загальний маржинальний дохід готелю від продажу номерів за певний період часу.

Integrated purchasing and production planning for a non-Ferrous metal production network

Non-ferrous metal producers usually face a high number of planning alternatives due to the high complexity of the planning and production processes in global multi-plant networks. So far, no optimization-based planning approach exists that captures this complexity by considering purchasing and raw material shipments as well as the allocation of material flows in the network while securing a multitude of plant-specific process restrictions. In this paper, we develop a generalized integrated purchasing and production planning model that captures all these characteristics. We apply this model to an industrial case study for a copper production network of the Aurubis AG. Based on this case study, we highlight the economic benefits of integrated purchasing and production planning as well as the allocation of material flows in the multi-plant production network. Our results show a significant improvement of the total contribution margin and underline the benefits of the presented approach.

Fenestrated endovascular aneurysm repair is financially viable at a high-volume medical center with positive hospital contribution margins and physician payment

ObjectiveTo examine hospital finances and physician payment associated with fenestrated endovascular aneurysm repair (FEVAR) for complex aortic disease at a high-volume center and to compare the costs and reimbursements for FEVAR with open repair, and their trends over time. MethodsClinical and financial data were collected retrospectively from electronic medical and administrative records. Data for each patient included inpatient and outpatient encounters 3 months before and 12 months after the primary aneurysm operation. ResultsBetween 2007 and 2017, 157 and 71 patients were treated with physician-modified endograft (PMEG) and Cook Zenith Fenestrated (ZFEN) repair, respectively. Twenty-one patients who were evaluated for FEVAR underwent open repair instead. The 228 FEVAR patients provided a total positive contribution margin (reimbursements minus direct costs) of $2.65 million. The index encounter (the primary aneurysm operation and hospitalization) accounted for the majority (90.6%) of the total contribution margin. The largest component (50.3%) of direct cost for FEVAR from the index encounter was implant/graft expenses. The average direct costs for FEVAR and for open repair from the index encounter were $34,688 and $35,020, respectively. The average contribution margins for FEVAR and for open repair were approximately $10,548 and $21,349, respectively, attributable to differences in reimbursement. The average direct cost for FEVAR trended down over time as cumulative experience increased. Average reimbursement for FEVAR increased after Centers for Medicare and Medicaid Services approved payments with the Investigational Device Exemption (IDE) trial for PMEG in 2011, and a new technology add-on payment for ZFEN in 2012. These factors transitioned the average contribution margin from negative to positive in 2012. The average physician payments for PMEG increased from $128 to $5848 after the start of the IDE trial. The average physician payments for ZFEN and for open repair between 2011 and 2017 were $7597 and $7781, respectively. ConclusionsFEVAR can be performed at a high-volume medical center with positive contribution margins and with comparable physician payments to open repair. At this institution, hospital reimbursement and physician payments improved for PMEG with participation in an IDE trial, while hospital direct costs decreased for both PMEG and ZFEN with accumulated experience.

How can dairies maximize their profits and properly remunerate their dairy farmers?

The current pricing process of raw milk in Brazil discourages producers from improving milk composition, which affects both yield and quality of dairy products. Furthermore, small and medium-sized dairies face great difficulties when it comes to planning production. Thus, a linear programming model was developed to price the raw milk and determine the optimal mix (combination of quantities) of dairy products that maximizes total contribution margin (TCM) under daily scenarios of high (January) and low (July) raw milk supplies (summer and winter, respectively) by comparing optimal solutions with actual results. The TCM of optimal and actual mixes were higher in January due to the greater availability of raw material. Packaging was a limiting factor in the production of cheese in optimal mixes. The relationship between unit contribution margin (UCM) and the required amount of raw materials per product unit and resource availability is crucial to defining the mix of dairy products and TCM of the dairy. Casein and raw milk volume showed shadow prices. Under both scenarios, the calculated prices of raw milk were higher than the prices charged by the dairy and were higher in January. The proposed model remunerates the producers based on the quantity and quality of raw milk. The dairy can maximize its TCM by better planning its mix of products with the use of linear programming.

Cost of practice in a tertiary/quaternary referral center: Is it sustainable?

Third-party payers are moving toward a bundled care payment system. This means that there will need to be a warranty cost of care-where the cost of complexity and complication rates is built into the bundled payment. The theoretical benefit of this system is that providers with lower complication rates will be able to provide care with lower warranty costs and lower overall costs. This may also result in referring riskier patients to tertiary or quaternary referral centers. Unless the payment model truly covers the higher cost of managing such referred cases, the economic risk may be unsustainable for these centers. We took the last seven patients that were referred by other surgeons as "too high risk" for colectomy at other centers. A contribution margin was calculated using standard Medicare reimbursement rates at our institution and cost of care based on our administrative database. We then recalculated a contribution margin assuming a 3 % reduction in payment for a higher than average readmission rate, like that which will take effect in 2014. Finally, we took into account the cost of any readmissions. Seven patients with diagnosis related group (DRG) 330 were reviewed with an average age of 66.8 ± 16 years, American Society of Anesthesiologists score 2.3 ± 1.0, body mass index 31.6 ± 9.8 kg/m(2) (range 22-51 kg/m(2)). There was a 57 % readmission rate, 29 % reoperation rate, 10.8 ± 7.7 day average initial length of stay with 14 ± 8.6 day average readmission length of stay. Forty-two percent were discharged to a location other than home. Seventy-one percent of these patients had Medicare insurance. The case mix index was 2.45. Average reimbursement for DRG 330 was $17,084 (based on Medicare data) for our facility in 2012, with the national average being $12,520. The total contribution margin among all cases collectively was -$19,122 ± 13,285 (average per patient -$2,731, range -$21,905-$12,029). Assuming a 3 % reimbursement reduction made the overall contribution margin -$22,122 ± 13,285 (average -$3,244). Including the cost of readmission in the variable cost made the contribution margin -$115,741 ± 16,023 (average -$16,534). Care of high-risk patients at tertiary and quaternary referral centers is a very expensive proposition and can lead to financial ruin under the current reimbursement system.

A Pediatric Acute Wound Service: a novel approach in wound management

Introduction In 2001, in response to an overwhelming increase in patient visits for various pediatric abscesses, burns, and other wounds, an ambulatory burn and procedural sedation program (Pediatric Acute Wound Service, or PAWS) was developed to minimize operating room utilization. The purpose of this study is to report our initial 7-year experience with the PAWS program. Methods The hospital records of all children managed through PAWS from 2001 to 2007 were reviewed. Outcomes measured include patient demographics, number and location of visits per patient, procedure information, cause of wounds, and reimbursement. χ 2 test and linear regression were performed using GraphPad Prism (GraphPad Software Inc, San Diego, CA). Results Overall, 7620 children (age 0-18 years) received wound care through PAWS from 2001 to 2007. There were no differences in patient age, race, and sex during this time period. Between 2001 and 2007, the percentage of patients seen as outpatients increased from 51% to 68% ( P < .05), and the average number of visits per patient decreased from 3.9 to 2.4 ( P = .05). In, 2007, 46% of the children required only 1 visit. In 2007, 74% of the visits were for management of wound and soft tissue infections, compared with only 9% in 2001 ( P < .05). The contribution margin of a PAWS visit and total contribution margin in 2007 were $1052 and $4.0 million, respectively. Conclusion The creation of PAWS has allowed for the transition in management of most pediatric skin and soft tissue wounds and infections to an independent ambulatory setting, alleviating the need for operating room resources, while functioning at a profitable cost margin for the hospital.

CAUSAS DE VARIACIÓN DEL RESULTADO CONTABLE ORDINARIO: EL CASO IBERIA

Normal 0 21 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Tabela normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} In this article it is intended to develop a model which would help understanding the causes of variation of operational earnings as a result of using external information. To do so, we rely on the study of the effects that lead to a variation of the activity, the total contribution margin, and of other incomes that are independent of activity and fixed costs. Given the close relation between activity and total contribution margin, was analyzed the effect on the operational results that generates variations in each of its components - variable costs per unit and margin rate. With the proposed model, algebraic and discrete type, it is possible to study the operational accounting result since its measurement and accountancy collection are normally done in annual periods, too long for the application of instrumental techniques such as differential equations or partial derivatives, in a way that robustness of the mathematical model was renounced the in favor of its simplicity.

GE Plastics Optimizes the Two-Echelon Global Fulfillment Network at Its High Performance Polymers Division

To achieve the highest customer satisfaction at the lowest costs, GE Plastics adopted a global approach to its manufacturing operations. Previously it met demand in one geographic region with production from that region only. It developed a decision-support system (DSS) to optimize the two-echelon global manufacturing supply chain for its high performance polymers division. The DSS uses a math-programming model to maximize contribution margin while taking into consideration product demands and prices, plant capacities, production costs, distribution costs, and raw material costs. The results of the model are the optimal production quantities by plant and the total contribution margin. The DSS is implemented in Excel and uses LINGO to solve the optimization model. After successfully implementing this system at the high performance polymers division, GE Plastics is rolling it out to other divisions.

Critical care medicine as a distinct product line with substantial financial profitability: the role of business planning.

As academic health centers face increasing financial pressures, they have adopted a more businesslike approach to planning, particularly for discrete "product" or clinical service lines. Since critical care typically has been viewed as a service provided by a hospital, and not a product line, business plans have not historically been developed to expand and promote critical care. The major focus when examining the finances of critical care has been cost reduction, not business development. We hypothesized that a critical care business plan can be developed and analyzed like other more typical product lines and that such a critical care product line can be profitable for an institution. In-depth analysis of critical care including business planning for critical care services. Regional academic health center in southern New Jersey. None. As part of an overall business planning process directed by the Board of Trustees, the critical care product line was identified by isolating revenue, expenses, and profitability associated with critical care patients. We were able to identify the major sources ("value chain") of critical care patients: the emergency room, patients who are admitted for other problems but spend time in a critical care unit, and patients transferred to our intensive care units from other hospitals. The greatest opportunity to expand the product line comes from increasing the referrals from other hospitals. A methodology was developed to identify the revenue and expenses associated with critical care, based on the analysis of past experience. With this model, we were able to demonstrate a positive contribution margin of dollar 7 million per year related to patients transferred to the institution primarily for critical care services. This can be seen as the profit related to the product line segment of critical care. There was an additional positive contribution margin of dollar 5.8 million attributed to the critical care portion of the hospital stay of patients admitted primarily through other product lines or the emergency room. This can be seen as the profit related to the "hospital service" segment of critical care. This represented a total contribution margin of dollar 12.8 million, approximately 24% of the institution's entire contribution margin. This information was subsequently used to develop strategic plans to promote this product line. We were able to define the critical care product line, and we were able to demonstrate profitability through an analysis of revenue and expenses related to critical care services. Our experience suggests that the concept of critical care as a product line, in addition to a hospital service, may lead to a useful analysis of this new discipline. This plan provided a rational foundation for development of the operating and capital budgets for the health system.

Optimization of the Production Planning and Trade of Lily Flowers at Jan de Wit Company

Jan de Wit Company implemented a decision-support system based on linear programming as a production-planning and trade tool for the management of its lily flower business. The LP maximizes the farm's total contribution margin, subject to such constraints as market-defined sales limits, market requirements, characteristics of the production cycle duration, technical requirements, bulb inventory, and greenhouse limitations. The main decision variable to be calculated is the number of flower beds in a specific greenhouse, from a specific bulb batch, of a specific variety, for a specific purpose, taking into consideration planting and expected harvesting weeks. Between 1999 and 2000, company revenue grew 26 percent, sales increased 14.8 percent for pots of lilies and 29.3 percent for bunches of lilies, costs fell from 87.9 to 84.7 percent of sales, income from operations increased 60 percent, return on owner's equity went from 15.1 to 22.5 percent, and best quality cut lilies jumped from 11 to 61 percent of the quantities sold. The system also suggested changes in the product mix.

BREAKEVEN ANALYSIS WITH CONTRIBUTION MARGIN METHOD AS A PROFIT PLANNING IN CV. SUGENG BARU

Breakeven analysis is one of the most important financial analysis in corporate financial planning. Break-even point is the point at which total cost equals total revenue. Breakeven analysis is used to determine the level of sales and product mix needed just to cover all the costs incurred during that period. And to reach the breakeven point, profit target is zero.&#x0D; Contribution margin is the difference between the sales value of the variable costs. Contribution margin can be used to cover fixed costs, and if still left the rest is profit. If management wants to know the breakeven sales quantity, the total contribution margin must equal the total amount of fixed costs.&#x0D; CV. Sugeng Baru is a manufacturing company engaged in the production and the production of paving and building block. CV. Sugeng Baru manufactures its products in large quantities and also accept orders from customers. Therefore, companies need a breakeven calculation to obtain a clear accounting information in the context of short-term profit planning. The results of the analysis break-even point of sales (in rupiahs) in October 2013 amounted to Rp 10,790,885, in November 2013 amounted to Rp 10,790,885, and in December 2013 amounted to Rp 10,762,032. Break-even point (in units) in October is a 4,796 units for paving and 1,199 units for building blocks, in November is a 4,796 units for paving and 1,199 units for building blocks, in December is a 4,784 units for paving and 1,196 units for building blocks. Profit target in October amounted to Rp 10,150,000 and the units must be sold is a 16,884 units for paving and 4,221 units for building blocks. Profit target in November amounted to Rp 10,130,000 and the units must be sold is a 16,868 units for paving and 4,217 units for building blocks. Profit target in December amounted to Rp 9,740,000 and the units must be sold is a 16,356 units for paving and 4,089 units for building blocks. &#x0D; Keywords: break-even point, fixed costs, variable costs, contribution margin.