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  #1  
Old 08-07-2012, 12:02 AM
irana irana is offline
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Default CaN-Do: Task 7

Recommending updated assumptions: are we also including updated MTM & Assays?
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Old 08-07-2012, 09:30 AM
ebeebs ebeebs is offline
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Read the very last line of Task 7, before the "Create an internal memo..."
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Old 08-07-2012, 10:06 PM
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aha less work. Thanks !
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Old 08-07-2012, 10:50 PM
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Now I have more questions...
For the method...all I am doing is comparing what those values should have been based on the assumptions and proposing changes. Not a very fancy method.

For decay rate I can propose a new value (0.04); however, for labour cost; all I can conclude is the initial assumptions will underestimate the true labour cost.

Am I on the right track?
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Old 08-07-2012, 11:02 PM
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I used least squares retrogression (it's built into Excel) to estimate a new formula for the two-shift labor cost.

But I'm unsure whether to change the decay rate assumption, since it's currently using a normal distribution with 10 simulations. Each simulation will have different values of the decay. I'm just not very sure I should be overhauling this stochastic model into using just one point estimate.

Last edited by KevinR; 08-07-2012 at 11:06 PM..
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Old 08-07-2012, 11:40 PM
irana irana is offline
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Oh yes...forgot about the normal dist part!

Did you again recommend changes to the economic variables, although, no info regarding these variables is included in the new spreadsheet? Or just focused on non-economic variables?
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Old 08-07-2012, 11:49 PM
irana irana is offline
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For the least sq formula, it is built in the first spreadsheet, cash flow tab? correct?
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Old 08-08-2012, 12:41 AM
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No I mean the regression function is built into Excel (=LINEST), or you can add the analysis toolpak into Excel (google on how to do this, it's simple). Excel help will assist you in how to use it.

I changed the exchange rate and the labor cost formula, but I did mention the other economic variables should be looked into and possibly changed due to the interdependency between the economic assumptions.

Not sure if this is enough. And I'm still deciding whether to change the decay rate...
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  #9  
Old 08-08-2012, 01:24 AM
KevinR KevinR is offline
 
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OK reading through the questions again, it now seems clear that we should NOT be changing the decay rate.

Under point 12 on page 3, it says "The three key parameters (40, 0.055, and 0.02) are assumed correct; there is no need to question these numbers or consider sensitivity tests for them."

And the question for task 7 says "You are asked to determine whether assumptions from the original model’s ”Scenarios and Results” tab should be adjusted from the values used 5 years ago."

The decay rate isn't part of these assumptions

Less explaining to do yay!
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  #10  
Old 08-08-2012, 12:25 PM
KevinR KevinR is offline
 
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Btw can I just ask one thing, are the actual labor costs higher or lower than the expected labor costs (based on the actual gold/ton yield given)? My expecteds were lower than the actual, but a friend of mine said his expected labor costs were higher than the actuals. I think this particular result should be similar for everyone, as it doesn't depend on the random values at all.
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