Please enable JavaScript.
Coggle requires JavaScript to display documents.
DESIGNING ASSET ALLOCATION SYSTEMS - Coggle Diagram
DESIGNING ASSET
ALLOCATION SYSTEMS
ASSET ALLOCATION SYSTEMS
Benefits
asset allocation systems include analytic tools that can be tailored to different types of assets
asset allocation systems provide guidelines that help managers throughout the organization understand how their proposals relate to the strategy of the business.
they provide a framework and set of categories into which asset proposals can be grouped
Limits on Asset Allocations
Policies and Procedures
typically set out
the process by which proposals will be gathered together and reviewed by top managers
a time frame each year during which managers will consider formal requests for new assets
the analyses needed to document a request
Span of Accountability
Spending Limits
SORTING ASSETS BY CATEGORY
Assets to Enhance Operating Efficiency and/or Increase Revenue
Assets to Enhance Competitive Effectiveness
Assets to Meet Safety/Health/Regulatory Needs
EVALUATING ASSET
ACQUISITION PROPOSALS
Evaluating Assets to Enhance Operating
Efficiency and/or Increase Revenue
Payback
Discounted Cash Flow
Internal Rate of Return
Evaluating Assets to be Acquired
for Competitive Effectiveness
factors that influaced judgement
Risks in deciding not to acquire the asset
Quality of information supporting proposal
Risks in acquiring the asset
Track record and ability of the people involved
Alignment of proposal with existing strategy and/or distinctive capabilities
Feasibility and cost of reversing decision
Evaluating Assets Acquired to Meet Safety/Health/Regulatory Needs
to ensure that
the business is receiving the best value relative to the features and/or benefits that are provided
the assets being purchased are suitable to the tas
PUTTING IT
ALL TOGERTHER
The Process of
Allocating Assets
use the
"
inputs ---> process --> outputs
" model
process
developing proposals should rely heavily
on the techniques that have been outlined
outputs
separated into
appropriate categories
compared against strategic plans
economic standards and criteria
inputs
people
opportunities
information
available resources
threats