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Value of Time

Definition

It is frequently said that "time is money." Hours that are consumed in one activity, such as making a decision, are not available for other activities, including carrying out that decision. Less frequently noted is the fact that the value of time varies with the number and intensity of competing demands. If the supply exceeds demand, value is reduced; if demand exceeds supply, value is increased.

Accordingly, the value of time will go down during slack periods and will increase progressively with increases in the number and importance of demands, not just on you but also on the group. In answering this question, we suggest that you start in the middle of the scale (Average Importance). If you and the group are currently experiencing fewer demands on your time than is customary, move down on the scale to lower values. If on the other hand, there are more demands on your time and on the group than is usual, move up from there to higher values.

Note the difference between time constraints (dealt with in an earlier question) and the importance of time (dealt with in this question). Time constraints of a magnitude that would preclude any of the decision processes are relatively rare. On the other hand, time always has at least some economic value — the amount of which varies with the ratio of supply to demand.

Examples

High Importance
    It is the height of the Christmas buying season during which you, as owner of a sizeable retail store, make 40 percent of your sales. All of your employees are busy with customers and occupied with making sure that they have the merchandise in sufficient quantities to meet demand.
Low Importance
    You are president of a small engraving business. Demand for the sevices you provide is seasonal, and this is the low season. Instead of the typical backlog of one month's orders, there is literally no business on hand. You and your five employees are trying to keep busy cleaning and repairing equipment and unsuccessfully making "cold calls" to try to generate new business.