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PDtax, CPA, MBA

Category: Finance

Satisfied Customers: 4105

Experience: Tax professional and business consultant for 35 years.

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My goal is to figure out what a decrease or increase would

Customer Question

My goal is to figure out what a decrease or increase would be based on a target number.For example: My number for new patient visits per week is 151. The 1st week we received 145 visits, which is a decrease of -4.14%. If for three consecutive weeks the target is not met, I want to reduce the target by the percent average of the three weeks combined. Target 151 1st Week - 145 variance = -4.14% 2nd Week - 142 variance = -2.11 3rd Week - 135 variance = -12.59% Average for the three weeks is -3.81%Would I then divide the 151 by the -3.81% to adjust the new target? 151/-3.81% = -5.7531 So my new target for the following week would be 151-5.7531 = 145 Is this correct?

Reducing your target down to 145 for the next target period doesn't appear to be enough of a revision. I see an error in your math.

If your target of 151 was compared to an average of ((145+142+135)/3=)140.67, I would likely want to use that lower average of 141 as my new standard to test. Your reduction of 10.33 visits per week on average should be the base for new testing.

Your mistake was in comparing each week to the previous week, and you should have used 151 as the standard. That way,

1st Week - 145 variance = -4.14% 2nd Week - 142 variance = -5.96% 3rd Week - 135 variance = -10.60% Average for the three weeks is -6.9%, which comes out to 10.4 visits per week change (proves the math).

I hope that helps. If it answers your question, please rate my assistance to close out your request (and credit me with assistance). I'mCustomer

I don't think we're on the same page because of my lack of explaining. I will have a new target every week based on the new patient visits from the prior week. I set a base line of 151 new patients every week. I'm comparing week to week to see if we are increasing in patient numbers, decreasing or staying the same. My goal is to increase by 10% every week. If we're increasing every week for three consecutive weeks, then I was trying to add up the percentage increases, divide by 3, and add the total as the new target - or deduct that total and make it the new target if we decrease for three consecutive weeks. Does this make more sence?

So you want to use the previous week's visits as the base. Then your math works, until you want to apply the percentage to the 151 base. This won't give accurate results. The reason is you are crafting changes from week to week, using different visit bases, and that won't give you an accurate percentage to apply to the three week old visit base. It's an apples to oranges method.

Either figure the changes based on the fixed visit base number (my original method) or apply the percentage change to the most recent visit week, say 135*(100-3.81%=)130.

Of course you can model as you like, but I just saw flaws in your math, which seemed to be the original gist of your question.

Thanks again from Just Answer. Don't forget to rate my assistance when we're done.

You can use the three consecutive weeks, but your choice of base period weeks is not consistent with the model you want to execute. Let's try another tack.

If your goal is to forecast the number of visits per week, I would suggest applying a factor to the most recent week. You were coming up with a moving average factor, but them applying that to a base period that had changed by more than 10%. The math didn't make sense.

How about if you applied your moving average against the moving average of the visits per week?

Your average for the three weeks is (151+142+135)/3=143. That has already changed. Applying the average percentage change you computed, -3.81%, might imply that the week four target should be (143*(1-3.81%)=138. That forecasts the fourth week goal, based on the average of the prior three weeks, with a weighted average based on the prior three weeks. that way, you are forecasting a declining trend, and now can anticipate the change, and take management steps in advance of additional declines.

Financial modeling is a tool to analyze data, and create information estimates for future decision making. If you forecast low visits, this might be a good week to schedule no appointments on Friday, for example.