Infrastructure Costs
An Infrastructure Cost report can help you approximate the total monetary cost of a network design based on estimated costs assigned to nodes and circuits. These costs are calculated from initial costs and per-period costs, where per-period costs are amortized based on the specified number of periods and interest rates. The report gives an infrastructure cost based on sums of all node and circuit costs, as follows:
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Total initial cost—Sum of all initial costs for each object type.
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Total cost per period—Sum of all per-period costs for each object type before the amortization is applied.
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Total cost—Total initial cost + total cost per period after being amortized to a net present value.
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Total infrastructure cost—Sum of the total node and total circuit costs.
Cost Basis
Costs are based on any combination of Cost Initial and Cost Per Period properties that are assigned to nodes and circuits. A typical use case is to set nodes with an initial cost to identify the initial capital investment and to set circuit costs per period to analyze the operational cost of leasing circuits over time.
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Cost Initial—Static, one-time cost to which amortization and interest rates are not applied.
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Cost Per Period—Ongoing costs that are amortized based on the number of periods identified and on the interest rate specified when generating the Infrastructure Cost report.
You can set these properties manually. For circuits, you can also use the Cost Circuit Initializer to set the costs automatically based on circuit distance and capacity.
The total cost for each node and each circuit appears in its respective Cost Initial or Cost Per Period column in the Nodes table and Circuits table. The sum total of the node and circuit costs appears in the output of the Infrastructure Cost report and is used in its calculations.
An easy way to see totals—as well as average, minimum, and maximum costs—without running the report is to right-click the Cost Initial or Cost Per Period column heading.
Setting Cost Properties
You can set these properties manually, as follows.
Procedure
Step 1 |
Choose one or more nodes or one or more circuits. Right-click one of these objects and choose Properties, or double-click one of these objects. |
Step 2 |
Click the appropriate tab:
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Step 3 |
Enter values in the Cost (initial) field, Cost (per period) field, or both, and click OK. |
Cost Circuit Initializer
The Cost Circuit initializer offers an automated way of setting circuit costs. For example, it lets you set realistic per-period circuit costs based on distance, capacity, or both.
The total cost for each circuit is the sum of the fixed cost plus the variable cost, where the variable cost is the result of multiplying the per-unit cost times the units selected (distance or capacity).
To access this initializer, choose Initializers > Circuit Cost. Options are as follows:
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Set cost—Set initial or per-period cost. The options that follow are applied to the choice selected here. Because initial and per-period costs are different values that do not overwrite each other, you can set one and then run the initializer again to set the other.
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Fixed cost—A static cost that is most often used when setting initial costs.
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Variable cost—A cost based on a circuit’s distance, capacity, or both. Whichever unit is selected (one or both), the value is multiplied by the “Per-unit cost” value.
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Per-unit cost—Per-unit monetary cost.
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Unit distance—Distance Sim value of the circuit.
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Example: If only “Unit Distance” is selected, if the Distance Sim is 700, and if the “Per-unit cost” is 0.50, the variable value for this circuit is 700 x 0.50 = 350.00.
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Unit capacity—Capacity Sim value of the circuit.
Example: If only “Unit Capacity” is selected, if the Capacity Sim is 400, and if the “Per-unit cost” is 0.25, the variable value for this circuit is 400 x 0.25 = 100.00.
Example: This example sets a per-period cost for a circuit that has a fixed cost of 250, a per-unit cost of 2, circuit distance of 850, and a capacity of 1000. Including all of these options in the calculation, the cost of this circuit is:
Fixed + (Per-unit Cost x Distance Sim x Capacity Sim)
250 + (2 x 850 x 1000) = 250 + 1,700,250 = 1,700,250
Infrastructure Cost Report
To create an infrastructure cost report, follow these steps.
Procedure
Step 1 |
For any node or circuits you want included in the report, set their initial or per-period costs. For more information, see Setting Cost Properties. |
Step 2 |
If creating a report for selected nodes or circuits, select them before opening the report dialog box. |
Step 3 |
Choose Tools > Reports > Cost Analysis. |
Step 4 |
Nodes: |
Step 5 |
Circuits:
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Step 6 |
Click OK. |
Example Infrastructure Cost Workflow
This example shows the generation of an Infrastructure Cost report based on a specific set of nodes and circuits, both tagged as the East Region. It sets initial costs on the nodes and per-period costs on the circuits based on their distance. The report is for 4 periods, and the interest rate is 5%.
Procedure
Step 1 |
Set initial node costs in the node Properties dialog box. |
Step 2 |
Run the Latency and Distance initializer to set Distance Sim values on the circuits (Initializers > Latency and Distance). |
Step 3 |
Set per-period circuit costs using the Circuit Cost initializer on circuits tagged with East Region. |
Step 4 |
Now that costs are set up for the region, generate the Infrastructure Cost report. |
What to do next
The resulting report performs these calculations:
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Sums the total initial costs for all nodes tagged with East Region to determine the total node cost.
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Sums the per-period costs for all circuits tagged with East Region to determine the total per-period circuit cost.
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Amortizes the per-period circuit costs across 4 periods using a 5% interest rate to determine the total circuit cost.
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Adds the total node cost to the total circuit cost to determine the total infrastructure cost.