e3value user manual, first release

5.9 Expenses

All money outflows in an e3value model are expenses, but not all expenses that an actor has need to be modeled as outflows. For example, companies have personnel expenses but we usually do not include a personnel market segment in the model that exchanges labor for salary with the company. Similarly, we usually do not show expenses on acquisition and maintenance of IT.

Nevertheless, these items may incur significant expenses that we want to include in an e3value model. We distinguish fixed expenses from variable expenses. Fixed expenses occur once in a market scenario and are associated with the actor, market segment or value activity that incurs the expense. Variable expenses depend on the volume of business and are associated with a port. These expenses are associated with producing or transferring a value object.

For example, in figure 5.10, the Railway company has fixed expenses of f70K in a market scenario and variable expenses of f34 per Train trip sale. It sells 500 000 Train trips, by which it has f34 * 500 000 = f17 000 000 variable expenses. Adding fixed expenses, total expenses in this market scenario are f17 070 000. It has a gross revenues of f200 * 500 000 = f100 000 000 and a net income of f100 000 000 - f17 070 000 = f82 930 000.

Figure 5.10:Expenses for the Travelers and Railway company. Expenses associated with a port are written inside the actor. A valuation associated with a port is written outside the actor.