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Determination of the expected profitability level of construction products with the use of probabilistic estimates

Abstract

Determination of the expected profitability level of construction products with the use of probabilistic estimates

Nebritov B. N.

Incoming article date: 02.04.2014

An approach is proposed to determine the expected profitability level of production in making strategic decisions on stabilization and development of construction production at the enterprise. The prediction of achieving the profitability level (profit rate) at realization of new enterprise products is made using probabilistic methods. It is assumed that the actual profit rate is a random variable which is approximated by the standard β distribution, ie, the distribution of mathematical statistics for random variables limited on both sides by the maximum and minimum values of production. In the calculations are taken optimistic and pessimistic estimates of the rates of profit from the sale of construction products. Using the formula for calculating the mathematical expectation of the random variable that is characterized by the β distribution, we performed the forecast of profitability for the planned construction products that are new for the enterprise - three types of cottages with different technical parameters and comfort. The experts (specialists of construction organizations involved in manufacturing similar products) gave optimistic and pessimistic estimates of the expected rate of profit from the sale of cottages. The resulting expected profit rate was compared with the industry average territorial regulations and maximum value of risk assessment of not receiving the expected profit (a coefficient of variation). The calculated values allowed to make positive decisions on the construction and implementation of the selected types of cottages.

Keywords: enterprise strategy; complexes of strategic decision-making objectives; principles and methods of prediction; profitability of construction products; actual profit rate as a random variable; mathematical expectation of profit; optimistic and pessimistic e