4. Fixed and Variable Costs in Distance Education
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4. Fixed and Variable Costs in Distance Education

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4. Fixed and Variable Costs in Distance Education 4. Fixed and Variable Costs in Distance Education Document Transcript

  • Design, development and delivery costs of Wired Class Fixed and Activity Unit Number of Unit cost Total costs variable costs units (£) (£) Capital costs Web server (hardware & software) £ 1 3000 3000 a £ 1 100 100 b Programming language package £ 1 395 395 Photo editor £ 1 70 70 CGI scripts package £ 1 80 80 Domain name registration £ 1 18 18 HTML editor £ 1 99 99 Maths grapher £ 1 45 45 Total 3,707 a 807 b Module Rewriting course content for the Web Screen 252 C1 (2525C1)/ dependent (lesson, examples, self-tests, pages Screen elements exercises, send to the teachers tasks, pages/hour on-line discussion topics and Web links) Writing HTML pages, including HTML 252 C2 (2525C2)/ writing HTML pages and layout and pages HTML hyperlinks design pages/hour Designing and developing graphics Graphics 126 C3 (1265C3)/ Graphics/hour Designing interactive graphs and Graphs 13 C4 (135C4)/ scripts graphs/hour Adapting & programming Java and Code lines 330 C5 (235C5)/ code Java Scripts lines/hour Programming CGI scripts Script code 4420 C5 (2215C5)/ line script code line/hour Designing and developing on-line HTML 9 C2 (95C2)/ tests, including writing HTML pages pages pages/hour and layout and hyperlinks design Graphics 9 C3 (95C3)/ graphics/hour CGI script 60 C4 (95C4)/ script code line code line/hour Revising course materials by content Pages 252 C5 (2525C5)/ experts revised page/hour Module- Designing interaction tools (e.g., chat Pages 29 C2 (295C2)/ independent and discussion boards), including pages/hour elements writing HTML pages and layout and hyperlinks design Graphic 5 C3 (55C3)/ graphics/hour Script line 130 C4 (1305C4)/ script code line/hour Developing administration tools Pages 14 C2 (145C2)/ (logging-in and logging-out, grading, pages/hour etc.), including writing HTML pages and layout and hyperlinks design. Graphic 7 C3 (75C3)/ graphics/hour
  • Fixed and Activity Unit Number of Unit cost Total costs variable costs units (£) (£) Script line 190 C4 (1905C4)/ script code line/hour Developing support tools(on-line Pages 169 C2 (1695C2)/ board, teacher today page, on-line pages/hour help, etc.), including writing HTML pages, layout and hyperlinks design. Graphic 112 C3 (1125C3)/ graphics/hour Script line 80 C4 (805C4)/ script code line/hour Testing by experts Pages 212 C5 (2125C5)/ pages/hour Total Fixed £ (2525C1+ costs 4725C2+ 2595C3+ 5225C4+ 7085C5) Variable costs Tuition, support and assessment Hour/day 2 C6 25C6 Recurrent Site maintenance Hour/week 2 C7 25C7 costs Running the Web server Maintenance a Hour/week 2 C7 25C7 a Connection a £/month 500 5005C7 a Virtual Web server (rent) b £/month 50 50 b Total variable £/week (45C6)+ and recurrent (1295C7) a (45C6)+ (25C7)+12.5b Total costs a Purchasing a Web server model b Renting a virtual Web server model
  • Rules-based estimates for design and development costs Cost contributor Measure Productivity Requirement Cost/hour rule per the course Rewriting course content for the Web Pages/hour 3 252 10 Writing HTML pages HTML 5 464 10 page/hour Designing and developing graphics Graph/hour 3 252 15 Designing interactive graphs and Interactive 2 13 20 scripts graph/hour Adapting & programming Java, Java Script code 10 5210 20 Scripts and CGI scripts line/hour Revising course materials and design Page/hour 9 464 20 by content and design experts Hour/day 2* 40 10 Tuition and support Hour/day 2 16 10 Site maintenance Hour/week 2 16 10 Web server maintenance a Web server connection a £/week 125 £1000 - £/week 12.5 £100 - Virtual Web server (rent) b * This time estimation is based on 32 students, studying one course, two times a week and for 8 weeks. a Purchasing a Web server model b Renting a virtual Web server model
  • Costs of Wired Class Type of costs Costs (£) % Capital costs 3,707 a 18.20 a 807 b 4.88 b 12,347 - Course-dependent development costs 2,315 - Course-independent development costs Total development costs 14,662 74.32 a 92.28 b Total fixed costs 18,369 a 93.11 a 15,469 b 97.36 b Tuition, support and Web site maintenance costs 960 - 1,040 5.11 Server maintenance and connection re-current costs a Virtual web server re-current costs b 100 .60 a Total costs 20,369 b Total costs 16,529 a Model a: Purchasing a Web server b Model b: Renting a virtual Web server
  • The elements of student-related costs Type of cost Using school LAN Cost (£) Capital costs LAN with shared modem 16,000 (infrastructure and computers for 6 students) Network printer 400 Web clients 0 Textbooks 10 Recurrent costs Network operation and 10% of the LAN cost maintenance per year Connection charge per minute .02
  • The variable and fixed costs over the course life-cycle s1 s2 s3 s4 s5 s6 s7 s8 s9 s10 Total Costs (£) Capital costs 3,707 0 0 0 0 0 0 0 0 0 3,707 Materials 14,662 0 0 0 0 0 0 0 0 0 14,662 development Tuition & Web site 960 960 960 960 960 960 960 960 960 960 9,600 maintenance Server 1,040 1,040 1,040 1,040 1,040 1,040 1,040 1,040 1,040 1,040 10,400 maintenance & connection Variable costs 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 20,000 Fixed costs 18,369 0 0 0 0 0 0 0 0 0 18,369 Total costs 20,369 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 38,369
  • The proportion of variable costs to fixed costs Fixed costs 48% Variable costs 52%
  • The cumulative fixed, variable and total costs over the course lifetime Cumulative s1 s2 s2 s4 s5 s6 s7 s8 s9 s10 Costs (£) Fixed costs 18,369 18,369 18,369 18,369 18,369 18,369 18,369 18,369 18,369 18,369 Variable costs 2,000. 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Total costs 20,369 22,369 24,369 26,369 28,369 30,369 32,369 34,369 36,369 38,369
  • The unit cost per course with increasing the number of courses Number of courses Course 1 Course 2 Course 3 Course 4 Course 5 Course 6 Total Fixed and capital costs 3,707 0 0 0 0 0 3,707 Course-dependent elements 12,347 12,347 12,347 12,347 12,347 12,347 74,082 Course-independent elements 2,315 0 0 0 0 0 2,315 Tuition and support 960 960 960 960 960 960 5,760 Server costs 1,040 0 0 0 0 0 1,040 Total costs 20,369 13,307 13,307 13,307 13,307 13,307 86,904 Cumulative total costs 20,369 33,676 46,983 60,290 73,597 86,904 - Cost per course 20,369 16,838 15,661 15,072 14,719 14,484 - Increasing the number of courses reduces the unit cost per course 25,000 Cost 20,000 Unit cost per course 15,000 10,000 5,000 0 1 2 3 4 5 6 Number of courses