Information Technology Billings Interpretation
One-Time Costs With Information Technology Options
Profitability of Demand Drivers
“Why are we being charged for Information Technology on the Corporate P&L Statement? We're not currently using any information technology options.”
As described in the LINKS participant's manual, Information Technology billings include the $1,000 per output-page charge for financial reports as well as the charges associated with any Information Technology options.
Page count is only known after the Word doc output file is generated, which occurs after the current-rount financials are calculated. So, Information Technology costs for the current round are reported on the following round's financial reports.
“Some information technology options have initial one-time (setup) costs that occur when an option is first activated. If we activate such information technology options occasionally, turning them "off" in subsequent simulation rounds, and then turn them "on" in later simulation rounds, do we have to pay the one-time (setup) costs each time we turn "on" such an information technology option?”
Yes, you are correct. Such one-time (setup) costs are always charged when such an information technology option is activated for the "first time." "First time" means that the option is "on" in this simulation round but was "off" in the previous simulation round. Of course, if you continuously order such information technology options with one-time (setup) costs, only the on-going (per simulation round) costs accrue after the initial simulation round in which the information technology option is activated.