A COST ALLOCATION MODEL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01240A000300230012-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 27, 2016
• Document Release Date: February 12, 2014
• Sequence Number: 12
• Content Type: OPEN

? Declassified in Part - Sanitized Copy Approved for Release 2014/02/12 : CIA-RDP80-01240A000300230012-2
*me
.A method for determining and
cistrihuting dp, costsernong users in s
multijob, te?loprocessinEei environment
Cost allocation for edp has been a
complex and. controversial problem
since the advent of multijob-stream
processing. The need to solve the prola-
han has grown with the increased use
of multijob processing and has become
cr. tical in a teleprocessing environ-
ment. There have been numerous arti-
clis .discussing the problems involved
and the requirements of a good cost
allocation model. However, few ap-
proaches have been offered on how to
meet these requirements. The major
requirements seem to be that the cost
allocation must be equitable, reproducible, -and realistic. The cost alloca-
tion model described in this article, at-
tempts to fulfill these criteria in a.
multijob processing and teleprocessing
environment.
The criterion of equitability applies
to the edp center and user accounting
centers. All edp costs including equip-
ment, polsonnel, and overhead costs
are allocated to the user accounting
centers, The users are charged in ac-
co asc with he quantity and cost of.
the resources that they use.
The second critedon, reproducibility
of -chaiges, is fulfilled by breaking
down resource into the smallest pos-
sible usable units without incurring
excessive data collection overhead.
Charges are exactly reproducible if the
same multijob stream is reprocessed. If
by Gabrielle K. and John J. Wiorkowski
the same job is processed with a differ-
ent multijob mix, a variance of no
greater than 1% is thought to be
acceptable.
The te :el ? criterion of realistic
charges is satisfied by deriving charges
from actual costs. There are a number
of advantages for both the edp center
and user in realistic charging. The edp
center obtains quantitative data to jus-
tify additional hardware and, further,
-to aid in the selection of the most cost-
effective hardware. The user is pro-
vided with a basis for decisions involv-
ing processing alternatives. Realistic
charges encourage the user in practices
conducive to lower operating costs and
thus lower charges. All of the benefits,
advantages, and implications of the
cost allocation model are best explored
after some details of the model are
understood.
Methodology and rationale
The basic cost and charge compo-
nents are the cpu and peripherals. The
cpu is frequently charged by a job's
total elapsed time or by a- job's cpu
time. Charging by elapsed time is a
reasonable approach in a single-job
processing environment. However, the
criteria of equitable, reproducible, and
realistic charging are violated in a
multijob processing environment.
Charging by elapsed time is not equi-
table to an installation or to the users
(some jobs are undercharged while
other jobs are overcharged), 'since the
charging does not depend upon the
amount of resources used by the job
during its elapsed time. Charges are
not reproducible because the amount
of elapsed time used by a job varies
greatly. depending upon the multijob
processing mix. Charges cannot be
basedupon the actual cost of resources
used since elapsed time is not indica-
tive of which resources are used by a
job and in what quantity. Thus, the
third criteria of realistic charges is
violated.
The second frequently used ap-
proach of charging for a job's cpu time
closely approximates the criteria but
does not consider the job's impact on
core. A job which uses five minutes of
cpu time and 60K of core would be
charged exactly the same as , job
which uses five minutes of cpu time
and 120K. The criteria of equitable
and. realistic charges are not fully satis-
fied in a multijob procc,ssing environ-
ment. Cpu charges are not equitable
since a job which requires mote core,
thus making the core una.vaitable to
other jobs., is charged the same amount
as a job which requires less core and
uses the same amount of elm time.
Charging for coo time is not realistic
since charges are not basad upon
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tual. costs. be tosal cost of the cpu
Declassified in Part - Sanitized Copy Ap
cute On it: LIM. IIlr I. '%
couraged in practices conducive St."
lower operating costs. Instead, he is
encouraged to reduce cpu time irre-
spective of the amount of core oc-
cupied.
Cpu time must be known for repro-
ducibility of charges and a job's impact
on core measured to have. equitable
and realistic charges. A good approach
is to combine cpu time and the amount
of core used into cpu kilobyte hours.
Kilobyte hours are defined as cpu time
in hours multiplied by bytes of core
divided by 1,000 (K = T*1311000)).
Kilobyte hours includes cpu time and
the amount of core occupied. Kilobyte
hours are satisfactory in the example
of two jobs, each of which requires five
minutes of cpu time, with one requir-
ing 60K and the other 120K. However,
consider a job which has heavy i/o and
occupies core for a long period of time
while using relatively little cpu time. A
heavy i/o job would be significantly
undercharged unless the job is Charged
for 1/o. Thus, it is necessary to intro-
duce peripheral costs and charges.
In a single-job processing environ-
ment it is not necessary to have sepa-
rate charges for the cpu and peripher-
als, since these resources are not usable
by any other job. However, in a multi-
job processing environment a periph-
eral can be used by any one of several
jobs. It is riot possible to exclusively
associate a peripheral to a job for the a
duration of the job or even from the
time that a job starts using the device
until the job stops using the device,
since more than one job can be using a
device over a fixed interval of time
(e.g., direct access devices).
A good method ? of costing and
charging peripherals- is by i/o opera-
tion. It is necessary to divide peripher-
als into device type and determine the
most reasonable unit of H;3tikotileiit.
The most conmovri #.s.pes are printers,
proved for Release 2014/02/12:
11;) tft. %._/fIL/A.-AIL iflti
lion), MICR (Magnetic Ink Character
Recognition), . and cost (Computer
_Output Microfilm) equipment would
be managed utilizing the principles ap-
plicable to the more common periph-
erals to be discussed in detail later. A
natural unit of measure for printers is
lines printed and for card t/o, cards
read or punched, A reasonable unit of
measure for tape and disc i/o is the
number of reads or writes to a device.
IBM refers to these 1/o operations as
EXCPS (Execute Channel Program).
SNIP (System Management Facility)
under os records all EXCPS by device.
for each job step. Costing and charging
by rilo operation is an equitable, re-
producible, and realistic method for
most peripherals. On-line disc storage
is a notable exception.
There arc. two basic types of disc
usage. First, a job may use a disc in a
manner similar to a tape, printer, or
card i/o. That is, when the job is not
issuing i/o operations to a device, the
device is available for use by another
job. Or more than one job may be
issuing Vo operations to the same de-
vice. This type of usage is covered
adequately by counting i/o operations.
The second basic type of disc usage
may require that a file be on line for a
period of time with relatively few i/o
operations issued to the disc (e.g., an
inquiry or time-sharing file). A file
which occupies a large amount of
space with 'elatively few 1/o opera-
tions should be charged for the space
occupied and unavailable for I/o usage
by other jobs. This on-line disc storage
can be costed and charged by a spin-
dle, a disc and a portion of the asso-
ciated control unit. A small file (e.g., a.
time-sharing file) which occupies a
few tracks or cylinders and has few i/o
operations can be placed in an on-line
'file :storage .categol-y. Thus, we have
thiec categories for (ins(' usage: oric
CIA-RDP80-01240A000300230012-2
*Not able 1 is a list of the 12 categories
chosen for our installation which eon-
tam all on-line resources and 0:! )ine
resources of printers, tapes, alei disc
storage. This list may vary dets iating
upon the particular installation hut the
principles will remain the same. Before
presenting a detailed analysis of eoen
category, it is advantageous to din- 'ss
the cost and percent usage figures
which are common to all categories.
(The figures in Table 1 are examples
and are not actual.)
The cost per month is the total cost
of all equipment and resources neces-
sary to make the particular resource
available for use. The cost includes all
operations and supportive personnel,
and overhead. All edp costs are spread
over each equipment category in pro-
portion to the percentage of cost of the
category to the total cost of equipment.
For example, if the total equipment
cost is $50,000 but the total cost of
providing the resource is $90,000 (i.e.,
$40,000 for personnel and overhead)
each equipment cost category would
be increased by 80%. An equipment
cost category which totals $1,000
would thus be $1,800. A service bu-
reau may wish to include their profit
figure at this point. If a profit on
equipment cost of 10% is required, the
80% figure would be changed to 90%.
Another approach to distributing
personnel and overhead cost over
equipment costs is to weight equipment
which requires more human interven-
tion higher than equipment which re-
quires little human intervention. This
would result in the cpu receiving very
little personnel costs and the peripher-
als the majority, since human interven-
tion is required to mount and dismourst
tapes and discs, place cards in a card
reader and change forms on the print-,
ers. Thc function of sTerations per-
Cost-Charge Category
Kilobyte Hour
On-line Printer
Card Reader
Card Punch
Disc I/O
On-line Disc Storage
On-line Filo Storage
Tape I/O
Connect
Off-line Disc Storage
Off-line Tape Storage
Off-tine Printer
?
Cost/Month
Percent Usage
Unit of Time
Unit of Resources
Rate
CPU
Core
Hours
1,000 bytes
$50,000
30
40
720
600
$.9645061.
Minutes
Lines
5,000
40
43,200
1,700
.0002292
Minutes
Covds
2,000
5
43,200
Mine es
Cr ds
500
43,200
.00192,30
Seconds
Channels
17,000
60
2,592,000
2.38
.0003215
Hours
Disc
2,000
40
720
2
- 3.4722222
Days
Tracks
4;000
50
30
12,000
.0222222
Seconds
Channels
19,000
50
2,592,000
2
.0003665
Hours
Ports
3,000
50
200
12
.2.5000000
Month
Disc
90
1 -
20
22.2227222
.400
Month
Tapes
6,000
80
1
04,000
Minutes
Lines
.1.8750000
7,000
_
50
43,200
22,000
.0002003
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.rae,ief ? be less. than costs. /f the estimated .1e- subtract resident system software from
Declassified in Part - Sanitized Copy Approved for Release 2014/02/12 : CIA-RDP80-01240A000300230012-2
*ay"
sonnet as well as control personnel is
more closely related to peripherals than
to the cpu. Peripherals would obvious-
ly, receive a higher percentage of per-
sonnel costs, which would result in rel-
atively low kilobyte charges and high
peripheral cVs. However, this does
not seem to be equitable since the pe-
ripherals cannot operate without the
cpu.
The policy of an installation may
suge'zz'st a weighted distribution of per-
sonnel and overhead costs over equip-
ment costs in order to improve overall
system performance. The weighting
may be developed to encourage one
processing alternative over another. It
is possible to encourage off-line print-
ing more than the actual cost of
equipment warrants by allocating a
higher percentage of personnel and
overhead costs to on-line printing than
off-line printing. However, a careful
analysis should be made before artifi-
cially weighting one device over anoth-
er. It may be thought that the use of
tapes will be more cost-effective than
the use of discs. However,- the overall
design of a system- may be more effi-
cient with the use of direct access de-
vices, but the advantages of disc will
not be used because of a deflated low
cost of tape. It is advisable to allow
actual usage and costs to suggest rates.
Regardless of the distribution method
chosen, an allocation of personnel and
overhead costs over equipment costs
seems to be the most practical, equi-
table and realistic approach.
It is necessary to introduce percent
usage figures for several reasons. No .
resource is used 100% of the time.
Preventive -maintenance must be per-
formed and it is necessary to have
sufficient equipment to meet peak
periods as well as rerun a job which
failed. Therefore, it is necessary to es-
timate percent usage figures.
Percent usage figures must be de-
termined for each cost-charge category
for a given installation. The same data
required for billing are required to cal-
culate percent usage figures. IBM
users who have ShIF and users with
similar software will find it a simple
task to obtain the needed data. Per-
cent usage is the total resource used di-
vided by the total resource available.
For example, a line printer capable of
printing 1100 Ipm or 47,520,000 lines
per month and that actually prints 23,-.
760,000 lines in a month has 50%
usage. It is necessary to. be exteemely
careful to collect the required da.a over
a representative period of time. The
Formulas and categories
All formulas have the same basic
form. The cost and percent usage
components have been discussed. The
unit of time and unit of resource com-
ponents vary depending upon the par-
ticular category and policy of an instal-
lation. ?
The quantities of unit of time and
unit of resource in the rate formula
must be the amount available for pro-
tinctive use if the percent usage figure
were 100%. This will be shown for
each category where applicable. The
policy of :in installation may dictate
that certain details vary but the princi-
ples are applicable to various installa-
tion policies.
The basic form of all rate formulas
is:
R -
P.T?U
The basic form of all charge formu-
las is:
CC = RTU
where:
R = Rate per unit Of time per unit of
resource.
C = Total cost of all resources in a
category.
P = Percent usage.
T Unit of time.
U = Unit of resource.
CC = Charge.
Kilobyte hours category. The equip-
ment inch,. d in the kilobyte hours
category is the cpu, core, consoles,
cables, and all equipment necessary
to make the cpu available for use:,
The sample cost per month in 'Fable I.
includes the total cost of equipment in
the category plus a percent Of total
personnel and overhead costs. It is
necessary to estimate a percent usage
figure for the cpu and a usage figure
for core because the cpu has only one
dimension, time, and core has two di-
mensions, time and space. That is, only
one job can utilize the elm at a given
instant while more than one job can be
resident in core at that instant. The
percent usage figure for the elm is the
sum of all productive cpu time divided
by the total possible cpu time. The
percent usage figure for core is the
average core used by a job in 1,000
byte units divided by the total available
productive core. The product of the
cpu and core percent usage figures is
the kilobyte hour percent usage.
The total number of hours available
in a month is 720. A megabyte ma-
chine has 1,048,576 bytes of core.
However, in order to use the machine,
it is necessary to have an operating
percent usage estimates are an integral system resident and frequently an in-
evisaalmt of core available for produc-
tive use. In the sample, there are
600,000 bytes of core available. By
substituting the figures in Table 1 into
the rate formula, we obtain:
$50,000
$0.9645061 =
.30720*,4O*600
the rate per kilobyte hour.
A sample charge for a jcb using five
minutes of cpu time and .100K would
be:
$8.2304409= $0.9645061* (5/60) *
(100*1024/1000)
On-line printer category. The
equipment included in the on-line
printer category is the printers, control
units, multiple.xor channel, and all
equipment necessary to mate the
printers available for use. Like all other
categories, the sample costs per month
in Table 1 include the total cost of
equjpinent in the category plus a per-
cent of total personnel and overhead
costs. The sample data indicates that
on the average 29,376,000 lines are
printed a month on a 1100 lpm printer
and a 600 1pm printer; or 40% of the
total possible lines that can be priated -
(.40?*43200*(1100+600)). The rate
per line becomes:
$5000
$.0001702 =
.40*43200*1700
The cost of paper per line may be
included for a total rate per line of
.0002292. A job which prints 1,000
lines would be charged $.2292 for
printer usage and paper costs.
Card reader and punch category. It
would be redundant to itemize the
costs and charges for the card reader
and punch categories since they are
very similar to the on-line printer cate-
gory. Cards read (punched) are
treated -in the same way as lines
printed. .
Disc I/O category. The equipment
included in the disc i/o category is disc
spindles with one disc pack each and
control units. The discs and control
units to be placed in the online disc
storage and on-line file storage cate-
gories should not be includedin the
disc i/o usage category. The v. .it of
time in Table 1 is 2,592,000 seconds
(the number of seconds ?in a month)
and the unit of resource is 2.38 chan-
nels. n order to estimate the total pos-
sible i/o operations, it g necessary to
estimate the average time to read or
write a block of data. This time depends
upon the particular equipment and av-
erage block size of an installation. We
used 70 ins for 2314 disc drives. An
estivinate of the total possible i/o opera-
tions is the product of the innaber of
te.e,nnek 'It 11 11hV the
Declassified in Part - Sanitized Copy Approved for Release 2014/02/12 : CIA-RDP80-01240A000300230012-2
. imthiptied le...? the nthorber of channels. exception that the aNVIII3VC 9 i me lii wari
Declassified in Part - Sanitized Copy Approved for Release 2014/02/12 : CIA-RDP80-01240A000300230012-2
mus ,e le
total possible i/o operations f.c. probably be less than the correspond- ,Notata for percent usage -t 1 . it
month is (2,592,000/.07) 238. ee lug disc time. . same as the procedure for collecting
88,127,998. The percent usage figure Connect. The connect category is data for billing. If srqv or a similar
would be the total i/o operations for a designed for a teleprocessing environ- software package is used to monitor
sampled period of time divided by the ment. The equipment included in this the operation of jobs, it is necessary to
estimated total possible i/o operations category is TCU (Terminal Control exercise prudence in the interpretation
for the sampled period of time. By Unit), line adapters, modems, and in- of percent usage figures. As men-
substituting the figures in Table 1 into coming lines. Terminals are usually honed, percent usage figures are re-
the rate formula, we obtain: dedicated to an accounting center and quired to correct for the fact that no
may be costed directly to the account-
resource is used 100% of the time.
?
$17,000
$.0003215ing center. MOM:Vet-, the supportive Preventive maintenance, equipment
?.60*(2,592,000/.07)12.38 teleprocessing equipment included in failure, excess equipment to meet peak
A job which reads or writes 10,000 the connect category is frequently load periods, and rerun time will lower
blocks of data would be charged $3.22. shared by a number of users, It is percent usage figures. Another factor
. On-line disc storage category. The advisable to separate supportive Rjr which will cause lower percent usage
equipment included in the on-line disc (Remote Job Entry) terminal equip-
figures is the fact that resources used in
storage category is disc spindles with ment from teleprocessing equipment system management, job management,
one disc pack each and Control units, used primarily with slow speed type-
and data management arc not recorded
The resources included in this category writer terminals, such as those fre-
for a particular job. This is as it should
quently used in time-sharing and inqui-
should not be included in the disc i/o be, in order to obtain reproducible
ry applications. There is a significant
or on-line file storage category. The charges. However, these factors should
cost difference in the required suppor- . be kept in mind when interpreting per-
cost of a fraction of a control unit
live equipment for -these two types of
corresponding to the number of discs- cent usage figures.
terminals. The RJF: user would not be
placed in this category should be in- Percent usage figures should be re-
charged. his equitable share and the
eluded. A reasonable unit of time is calculated and reviewed annually or
one hour a time-sharing or inquiry user would be
arid a reasonable unit of re- every few years. An increase or de-
source is one disc. The sample 40% overcharged. An advantage of having crease in jobs will, of course, influence
usage figure indicates that 40% of the more than one connect category is that percent usage. An upgrade in equip
time the discs in this category will be in ,leased or purchased software costs can ment will frequently lower percent
productive use. By substitution the rate be placed in the appropriate connect, usage, at least until additional jobs are
formula becomes: category. The sample connect category put on the system. The lower percent
$2,000 in Table 1 is designed for time-sharing usage resulting from an upgrade in
$3.47222 = -------------------- users and includes the cost of leased equipment may not increase rates sig-
.40*720*2 software used exclusively by time-shar- nificantly if the upgrade results in low-
ing users.
A job (e.g., an inquiry job) which er costs per unit of resource. The
requires a The sample percent usage figure in disc on line for four hours change in percent usage and rates with
would be charged $13.89. Table 1 indicates that 50% of the equipment change provides data with
of 50% will be ports wi use o
On-line file storage. The sample data. available 12 p which to analyze the advantages or
B
connect hours. y
in Table I under on-line file storage is the available 200 co disadvantages of equipment changes.
representative of the resources used by substitution the rate formula becomes:The claim that a .particular piece of
time-sharing users. The sample indi- $3.000
. -------------- equipment has a lower cost per unit of
$2500000 =
cates that the cost of four disc spindles, .50*200*1.2 resource, or that the equipment will
disc packs, and a fraction of a control increase throughput, can be substan-
A user connected two hours would be
unit are included under cost per tiated or discredited with the use of
month. However charged $5.00.
, the 12,000 tracks spin-off data from the cost allocation
11-line disc storae and off-lineape
under unit of resource represents the 0model. Equipment which allows an in-
storage. The equipment in the off-line
capacity of three 2314 disc packs. The - stallation to have lower rates has oh-
e catel,,ory is disc packs and
fourth disc contains time disc stora
sys- vious advantages. The policy of an in
the equipment in the off-line tape stor-
tem software, and swap space used ex- stallation may dictate that rates should
discsuentl
Fre
es
is tapes.
e categoryg p. qy
elusively by time-sharing users. This anot change as frequently as equipment
and tapes are purchased. 'rho amor-
method distributes the cost of the a changes. Thus, while spin-oft' data
tized cost or the cost of leasing discs
fourth disc over the three discs avail- from the cost allocation model may be
es can be used a s the cost fig -
able for time-sharing user file storage. and tap used in cost-performance analysis, re-
. The rate is simply the cost divided
On-line file storage is charged pen day ures l vised. rates need not be used in billing
per track. By substitution the rate for- by the percent usage multiplied by theuntil the installation's equipmeet has
mula becomes: number of discs or tapes availahse.A , stabilized. -
reasonable charge period is one month. All data required for billing of the
$4,000 011-line printers. Tho equipment in-
$.022222 --,-- categories in Table 1 are available
? .50*30*12,000 eluded in the off-line printer category through SNIP or similar software pack-
is off-line printers and control units, ages with the exception$ on-line file
A user who has a file on line for three The off-line printer percent usage, rate, storage, off-line disc storage, and off-
days and occupies two tracks would be and charges are calculated with the line tape storage. An installation which
charged $.13.same method used for on-line printers does not have on-line communications
Tape 1/0. communications-
Tape equipment included with one exception. Tape resources are may not require the on-line file storage
in the tape Vo category is tape drives utilized and the cost of the tape i/o .c!ategory. However, it will be neeesssry
with one tape per drive and control should be included. This can be easily
units. his category is very similar to accomplished by adding tile tape i/o for the installation wh iCh does need
T
this'''
the disc i/o category. The tape percent rate divided by the number of lines in . category to write the required
software to read the disc vrcie (y.01-
-
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Aii0CatiOri wilt probably exceno the k 0 byte
et.
Declassified in Part - Sanitized Copy Approved for Release 2014/02/12
quired data on off-line disc storage an - in choosinn between processing alter-
T TT 41.11 Wk.11,1 \ ate necessary
off-line tape storage may be available
from the installation's library system.
Consequences of detailed. billing
A disadvantage of the cost alloca-
tion model is that it is initially difficult
for a user to rdate to the cost-charge
categories. The difficulty is primarily a
result of a habit of thinking in terms of
a singlls, job environment -and the com-
plexity of a multijobbing and telepro-
cessing environment.
The disadvantage becomes an ad-
vantage, if the user is given an under-
standing of the cost allocation model.
This can be -accomplished by initially
providing an internal seminar on how
the rate and charge formulas are de-
vcloped and applied. A brief explana-
tion and discussion will facilitate the
user's understanding of the cost alloca-
tion model. The user will immediately
realize that the greater the overall sys-
tem utilization the less his charges will
be. Suggestions on how the user can
reduce his charges for planned and
existing applications will enhance the
user's confidence and improve cooper-
ation with his installation. Undoubted-
ly, some systems will be more costly
ano oiLrc to,ss costly than a previous
method of charging. An analysis and
explanation of such variance will aid
the user in understanding the rates and
assist him in reducing his charges. Care
should be taken in designing -a bill
which is easily understood by the user
and contains sufficient detail. A de-
tailed bill containing information simi-
lar- to Table 2 provides the user with
the information he requires in order to
optimize an existing system or planned
system with respect to his charges.
When a user minimizes his charges, he
minimizes the installation's costs, since
charges are based on costs.
It is universally recognized that
commercial jobs involve heavy i/o.
What may not be recognized by the
user is the fact that t/o costs are fre-
quently greater than cpu costs. The
average batch job in Table 2 may bear
little resemblance to an average batch
job at another installation. However,
an average job in a commercial ei vi-
ronment will probably be similar to Ta-
natives With respect to costs. Estimat-
ing costs for a proposed project can be
a tedious task. This burden can be
relieved by a simple project costing
program. We have found this ap-
proach quite beneficial. The user has
access to an interactive project costing
program through time-sharing. Tl?e.
program interrogates the user for the
resources which he expects to use, and
provides estimated charges. The user
has an opportunity to optimize a sys-
tem while the system is in the planning
stages.
Systems are frequently designed and
cost estimates derived based upon a
"feel" for the system. This "feel' for a
system is frequently based upon expe-
rience in a single-job processing envi-
ronment. It is difficult, if not impossi-
ble, to develop a "feel" for a system in
a multijobbing and teleprocessing
environment, particularly where the
job mix is constantly changing. The
cost allocation model forces a detailed
analysis of a planned system and pro-
vides the tools with which to make the
analysis.
Virtual storage computers offer fur-
ther challenges in systems design and
cost allocation. The proposed cost allo-
cation model is designed for virtual
storage systems with a possible modifi-
cation to the kilobyte hour category. It
is not known if a significant increase in
virtual system overhead would be in-
curred by recording the amount of real
storage space used in conjunction with
a given amount of cpu time. If this
overhead is excessive, it would prob-
ably be advantageous to reduce the
kilobyte hour category to a strictly cpu
category. No other category in the cost
allocation model would be affected..
E3enefits
There area number of important
benefits derived directly from the cost
allocation model and indirectly as a,
result of analysis of the data required.
to establish the rates and perform bill-
ing. Consider the benefits and advan-
tages to an installation and its users as
a result of the proposed model:
. The model provides a quanti.a-
tive basis for equipment evaluation
Category
Rate
Uni t of
Time
Unit of
Resource
Charge
kilobyte Hour
$.9645061
.01405
96K
$1.40800
On-line Printer
.0002292
2006.14
.45981
Card Reader
.0004629
299.51
.13864
Disc I/0
.0003215
5008.71
1.61030
Tape I/O
.0003665
4830.66
1.77051
Off-lee Tape
1.6750000
1 Mo.
1.00
1.87500
Storage
Total
$7.26226
'I able 2. Sample charges for an average batch job
Declassified in Part - Sanitized Copy Approved for Release 2014/02/1
InfOrmation is available upon which to'
: CIA-RDP80-01240A000300230012-2
antroversml questions.
What is the cost differential be-
tween a turnkey system on a
? minicomputer and a similar sys-
tem on a maxicomputer?
b. What is the impact on the host
computer and its associated cost
of teleprocessing with a terminal
control unit or an intelligent
front end?
? c. What is the cost differential and
benefits between keypunching,
off-line data entry and on-line
data entry equipment?
2. Each system resource. is priced to
pay for itself, thus making justification
of additional hardware simpler and
more direct. Evidence of a need for
additional resources is provided when
actual percent usage approaches a
maximum tor an installation's demands.
3. The data required to charge real-
istically is extremely valuable in opera-
tional .analysis. This data may be used
to determine overall system utilization.
4. Percent usage figures provide a
quantitative measure that may be used
in adjusting an installation's operation
schedule.
5. The standard turnaround service,
to which an installation agrees, results
in higher costs as requirements for
shorter turnaround time increase. The
higher costs ensue due to the necessity
of maintaining what is essentially an
overcapacity of resources in order to
allow some users pre-emptive service.
Depending upon the installation's poli-
cy, load leveling may be encouraged by
adding a factor or giving a discount to
a job which requires a high priority
or can tolerate a lower-than-standard
priority.
6. The proposed cost allocation
model provides a quantitative basis for
project costing. The decision to ap-
prove or reject an application devel-
opment project should hinge on an
analysis of costs and benefits. The cost
of a system must be based upon actual
costs of the resources required in order
for an analysis of a system's cost to be
meaningful and consistent with a" cor-
poration's overall goals and policy.
7. Realistic charges provide a basis
for user decisions-involving processing
alternatives, thus encouraging efficient
system design. If charges are not based
on costs, the user will minimize his
charges in a way which will not mini-
mize overall system costs.
8. The trend toward centralization
of hardware and decentralization of
applications places considerable con-
trol of the use of resources in the hands
of the user The user must be aware of
the costs of resources and feel the im-
pact of tthese .cm-fr..c in order to keep
2 : CIA-RDP80-01240A000300230012-2
Declassified in Part - Sanitized Copy Approved for Release 2014/02/12 : CIA-RDP80-01240A000300230012-2
? ? .? _
and firne-stiaring app/ications. I . ?....
9. The ? cost allocation Nimedel
charges for a job according to the job's
total impact on the system. Conse-
quently, charges are equitable to all
concerned.
In summary, the cost allocation
model fulfills the criteria of equitable,
reproducible and realistic charges. 'Hie
model. establishes the relative value of
resources for comparison on a com-
mon basis and encourages users in
practices conducive to establishing
lower operating costs. Data necessary
for the . implementation and mainte-
nance of the cost allocation model
provide a measurement of overall -sys-
tem performance. Although cost allo-
cation in a multijob processing, tele-
processing and virtual storage system is
a complex task, it is a necessary task,
and can result in numerous benefits to
the installation and its users.
Ms. Wiorkowski is a staff member of
.the computer utility development
group at the Jewel Companies, Inc.
Her primary responsibility is to de-
velop corporate goals through liaison
with all Jewel Companies systems
planning groups. She has a BA in com-
puter sciences frern St. Mary's Univ.
and has been a lecturer on teleprocess-
ing for the American Management
Association. .
Dr. Wiorkowski is a research associ-
ate, department of statistics, at the
Univ. of Chicago. He was previously
an assistant professor affiliated with
the U.S. Army, Baylor Univ. E,,reltdate
program in health care administration.
He has a PhD from the Univ. of
Chicago,
Model
4200
Cassette
1,3
.1
5-trlc:;4, i(a>
7.. 0 k? ,fiit
:
sr Reel-driven speed control Li Reference-0(1cm tape guide-
? a Read/Writo. or Read-Alter-Write heads n Two-track or
four-track operation a Recording speeds from 1 IPS to 75 IPS
? tJRZ or phase-encoded (up to 1000 DPI) la Torque feedback
tension servo a Storage capacity to 22 million bits a EoT end
BOT sensors a 120 IPS rewind speed ri fil-directional opera-
tion 13 ?.001-inch tracking ?
Datum 'Model 4200 digital tape cassettes are particularly suitable
as minicomputer peripherals or for use in key-to-cassette sys-
tems, instrumentation systems and data logging systems. Can be
provided with single-gap react/write or dual-gap read-after-wiite
heads.
Offered with a wide range of accessories, Including software.
- Can be packaged in multiples: typically, three drives
with associated controller and computer
interface.
Write for brochure
and prices.
r
I
7:1
1
Peripheral Dynamics
Corporation
: -1
,
'
?;Pt
2 '
I
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STAT
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