Introduction to Costs and Fixed Costs Configuration

Context and Prerequisites

Defining Costs is the third step in configuring your Scenario, after defining the Forecast and the Operations.

SimPath enables you to configure costs across multiple dimensions: facility, transport, and operations. To begin, click Add Costs to navigate to the Costs Configuration page, where you'll find four sections: Fixed Costs for facilities, Transfer and Transform for Operations, and Transport Costs.

You will see red warnings in each section until costs are configured. Warnings also appear if all values in a section are set to zero.

Configuring Costs for Your Priorities

You don't need to fill in every section. If your priority is Transport Costs, for example, you can configure just that section and set all others to zero. The only requirement is at least one non-zero cost for SimPath to optimise against. Any sections you configure will be available as cost dimensions to visualise and explore.

Fixed Costs

Fixed Costs do not depend on the volume a facility processes. For example, doubling production at a Factory doesn't change its rent. Facilities of different sizes will naturally have different fixed costs.

Tiers and Max Capacities

Tiers capture the different sizes of your facilities and their economies of scale. You will always start with a Default tier, alongside a Max Capacity for each location type — the largest observed flow volume into or out of locations of that type in your dataset.

You can define as many tiers as needed, but their capacity cannot exceed this maximum. In the demo, we configure different sized tiers for Retailers, Factories, Treatment Centres, and Distribution Centres.

Economies of Scale

Cost configuration naturally captures economies of scale, where larger facilities can have a relatively lower fixed cost per unit of capacity. The right values here will be specific to your Movement Set.