Demonstrating saving is important in various scenarios. Optimal Answers encourages you to do a savings analysis to discover the potential value of Optimal applications by comparing them to existing methods. Subsequently, you are likely to have occasion to defend recommendations based on model results that run counter to established practices. In either case, the approach is the same.

The purpose of doing a savings analysis is to see if the proposed approach produces better decisions that result in improved performance, reduce costs, and, ultimately, increased contribution to profit. Comparing the cost of some unit of activity using the existing decision-making process with the Optimal produced solution provides a good measure of what savings can be expected.  Existing practices have evolved under the guidance of knowledgeable people, so they are expected to be quite good in all respects; it is always interesting to see how the Optimal results compare.

The approach is to generate a Base-case solution using existing methods and an Optimized solution using Optimal, then produce Comparison Reports that demonstrate and document the savings. Select a unit of work for the comparison. To assure “a level playing field”, Optimal is used to compute the cost of the existing approach using the same data used in the Optimal approach.