Cisco WAE Design 7.0.1 User Guide

Cost Basis

Costs are based on any combination of Cost Initial and Cost Per Period properties that are assigned to nodes and circuits. A typical use case is to set nodes with an initial cost to identify the initial capital investment and to set circuit costs per period to analyze the operational cost of leasing circuits over time.

• Cost Initial—Static, one-time cost to which amortization and interest rates are not applied.
• Cost Per Period—Ongoing costs that are amortized based on the number of periods identified and on the interest rate specified when generating the Infrastructure Cost report.

You can set these properties manually. For circuits, you can also use the Cost Circuit Initializer to set the costs automatically based on circuit distance and capacity.

The total cost for each node and each circuit appears in its respective Cost Initial or Cost Per Period column in the Nodes table and Circuits table. The sum total of the node and circuit costs appears in the output of the Infrastructure Cost report and is used in its calculations.

An easy way to see totals—as well as average, minimum, and maximum costs—without running the report is to right-click the Cost Initial or Cost Per Period column heading.

Setting Cost Properties

You can set these properties manually, as follows.

Step 1 Choose one or more nodes or one or more circuits. Right-click one of these objects and choose Properties, or double-click one of these objects.

Step 2 Click the appropriate tab:

• Nodes—Click the Inventory tab.
• Circuits—Click the Advanced tab.

Step 3 Enter values in the Cost (initial) field, Cost (per period) field, or both, and click OK.

Cost Circuit Initializer

The Cost Circuit initializer offers an automated way of setting circuit costs. For example, it lets you set realistic per-period circuit costs based on distance, capacity, or both.

The total cost for each circuit is the sum of the fixed cost plus the variable cost, where the variable cost is the result of multiplying the per-unit cost times the units selected (distance or capacity).

To access this initializer, choose Initializers > Circuit Cost. Options are as follows:

• Set cost—Set initial or per-period cost. The options that follow are applied to the choice selected here. Because initial and per-period costs are different values that do not overwrite each other, you can set one and then run the initializer again to set the other.
• Fixed cost—A static cost that is most often used when setting initial costs.
• Variable cost—A cost based on a circuit’s distance, capacity, or both. Whichever unit is selected (one or both), the value is multiplied by the “Per-unit cost” value.

– Per-unit cost—Per-unit monetary cost.

– Unit distance—Distance Sim value of the circuit.

Example: If only “Unit Distance” is selected, if the Distance Sim is 700, and if the “Per-unit cost” is 0.50, the variable value for this circuit is 700 x 0.50 = 350.00.

– Unit capacity—Capacity Sim value of the circuit.

Example: If only “Unit Capacity” is selected, if the Capacity Sim is 400, and if the “Per-unit cost” is 0.25, the variable value for this circuit is 400 x 0.25 = 100.00.

Example: This example sets a per-period cost for a circuit that has a fixed cost of 250, a per-unit cost of 2, circuit distance of 850, and a capacity of 1000. Including all of these options in the calculation, the cost of this circuit is:

Fixed + (Per-unit Cost x Distance Sim x Capacity Sim)

250 + (2 x 850 x 1000) = 250 + 1,700,250 = 1,700,250

Infrastructure Cost Report

To create an infrastructure cost report, follow these steps.

Step 1 For any node or circuits you want included in the report, set their initial or per-period costs. For more information, see Setting Cost Properties.

Step 2 If creating a report for selected nodes or circuits, select them before opening the report dialog box.

Step 3 Choose Tools > Reports > Cost Analysis.

Step 4 Nodes:

a. Select whether to include all nodes, selected nodes, or specifically tagged nodes.

b. If you are calculating per-period costs, set the number of periods and the interest rate.

Using tags is a convenient way to determine costs for a specific region of the network or for specific customers.

Step 5 Circuits:

a. Select whether to include all circuits, selected circuits, or specifically tagged circuits.

b. If you are calculating per-period costs, set the number of periods and the interest rate.

Step 6 Click OK.

Example Infrastructure Cost Workflow

This example shows the generation of an Infrastructure Cost report based on a specific set of nodes and circuits, both tagged as the East Region. It sets initial costs on the nodes and per-period costs on the circuits based on their distance. The report is for 4 periods, and the interest rate is 5%.

Step 1 Set initial node costs in the node Properties dialog box.

a. Filter to the nodes containing the East Region tag.

b. In this example, there are 20 nodes with this tag. Set the 10 core nodes to an initial cost of 2000 each and the 10 edge nodes to an initial cost of 1000 each.

The Nodes table lists these costs in the Cost Initial column. Right-click this column heading to see the total Cost Initial for all of these nodes (here, 30,000). Because we are only interested in initial node costs, this is the same value that the Infrastructure Cost report shows for total initial node cost.

Step 2 Run the Latency and Distance initializer to set Distance Sim values on the circuits (Initializers > Latency and Distance).

Step 3 Set per-period circuit costs using the Circuit Cost initializer on circuits tagged with East Region.

a. Filter to the circuits containing the East Region tag, and select these circuits.

b. Run the Circuit Cost initializer (Initializers > Circuit Cost). For this example, there are no fixed costs, a per-unit cost of 2, and the initializer is only using Distance Sim.

The Circuits table lists these costs in the Cost Per Period column. Right-click this column heading to see the total Cost Per Period for all of these circuits. Here, it is 35,063.46, and this is the number that is amortized in the Infrastructure Cost report based on 4 periods with a 5% interest rate.

Step 4 Now that costs are set up for the region, generate the Infrastructure Cost report.

a. Choose Tools > Reports > Cost Analysis.

b. Select the East Region nodes and circuits.

c. Because there are no per-period costs for nodes, no further node options are set.

Set the circuits “Number of periods” to 4, and the “Interest rate (%)” to 5.

The resulting report performs these calculations:

• Sums the total initial costs for all nodes tagged with East Region to determine the total node cost.
• Sums the per-period costs for all circuits tagged with East Region to determine the total per-period circuit cost.
• Amortizes the per-period circuit costs across 4 periods using a 5% interest rate to determine the total circuit cost.
• Adds the total node cost to the total circuit cost to determine the total infrastructure cost.

Example

This example shows four nodes connected by three circuits.

• Each circuit has 10,000 Mbps capacity.
• Each circuit has a Cost Per Period of 100.
• There are two demands:

dnv-mia has 2000 Mbps of traffic.

mia-dnv has 5000 Mbps of traffic.

• These two demands are in one demand grouping named Acme_region.

The Cost by Capacity calculation is as follows:

• dnv-mia demand: (100 + 100 + 100) x ((2000/10,000)/2) = 30
• mia-dnv demand: (100 + 100 + 100) x ((5000/10,000)/2) = 75
• Acme_region demand grouping: 30 + 75 = 105

The Cost by Util calculation is as follows:

• dnv-mia demand: (100 + 100 + 100) x 2000/(2000 + 5000) = 85.71
• mia-dnv demand: (100 + 100 + 100) x 5000/(2000 + 5000) = 214.29
• Acme_region demand grouping: 85.71 + 214.29 = 300