A production process is an economic process for converting inputs (raw materials, labor and other resources) into outputs (goods or services). Financial modeling of a production process helps illuminate the decisions regarding the process such as key dates, timing, capital asset purchases, and build or buy decisions. To illustrate, this article takes a closer look at a wine production process including growing grapes, crushing, blending, aging, bottling and packaging.
Price elasticity refers to the property that the price of an object will influence the number of units sold. In general, higher prices mean fewer sales, and lower prices mean more sales. If you chart price and units sold, you can draw a line with a negative slope to show the relationship. The revenue can also be plotted and shows a curve. If you set the price too low or too high, you won't have much revenue, but if you price it just right, you'll do fine. Optimization is a method to find the best price to maximize profit.
A cube is a multidimensional hierarchical data organization that underpins OLAP (Online Analytical Processing) and many other financial software tools. Cubes provide a fast way to analyze data and generate reports. A static cube is one in which the cube is created up front by computing all (or most) values and storing them in one static data structure. Any change or update must either recompute the cube from scratch or use sophisticated techniques to minimize the computational cost of updating the static cube.