Prescribing Policies in Public Administration

Requirement

Assignment based on Prescribing Policies in Public Administration 

Solution

1. Determine the following before deciding a prescription: (a) maximize effectiveness at the least cost; (b) maximize effectiveness at a fixed cost of $10,000; (c) achieve a fixed-effectiveness level of 6,000 units of service at a fixed cost of $20,000; (d) maximize net benefits, assuming that each unit of service has a market price of $10; (e) maximize the ration of benefits to costs, assuming that each unit of service has a market price of $10. 
Answer
: The application of adequacy method will be beneficial at this point. A predetermined effectiveness level supports the specific standard and the extent of the same conforms to adequacy. The criterion that relates to the adequacy is about the anticipations of the strength among the options concerning policy and values of the expected outcomes (Dunn, 2012). Mentioned below are the various determinations:

  • a) Maximize effectiveness at the least refers to the Type II problem.

  • b) Maximize effectiveness at a fixed cost of $10,000 refers to the Type I problem.

  • c) Achieve a fixed-effectiveness level of 6000 units of service at a fixed cost of $20,000 refers to the Type II problem.

  • d) Maximize net benefits, assuming that each unit of service has a market price of $10 refers to the Type I problem.

  • e) Maximize the ration of benefits to costs assuming that each unit of service has a market price of $10 refers to the Type III problem.

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2. Determine which of the two main programs (Program I and Program II) should be selected under each of these criteria. Justify your position.
Answer
: The complex relationship between the cost and effectiveness can be witnessed while considering these four problems. Therefore, it is advisable that the relationship among these two elements, namely, costs and effectiveness should be taken into consideration rather than viewing both the elements separately (Dunn, 2012). Mentioned below are the details:

  • a) Maximize effectiveness at the least should be preferred considering Program I. The reason behind the same is that the program displays equal-effectiveness. If the cost and effectiveness are observed it can be stated that both are not varying freely. Moreover, at the balance point, the ratio among the effectiveness and the cost is lowest. 

  • b) Maximize effectiveness at a fixed cost of $10,000 should be preferred considering Program II. The reason behind the same is that it can be observed achieving high level of effectiveness and simultaneously remains under the limitation of the fixed cost. 

  • c) Achieve a fixed-effectiveness level of 6000 units of services at a fixed cost of $20,000 should be preferred considering the Program II. The reason behind the same is that the ratio of the effectiveness to the cost will be observed to be greatest at the interaction point. 

  • d) Maximize net benefits, assuming that each of service has a market price of $10 should be preferred considering the Program II. The reason behind the same is that it can be witnessed to be achieving high level of effectiveness while staying under the fixed cost limitation. 

  • e) Maximize the ration of benefts to costs assuming that each unit of service has a market price of $10 should be preferred considering the Program I. The reason behind the same is that the program displays equal-effectiveness. The variation among cost and effectiveness is not free. Moreover, the ratio among the two is lowest at the balance point. 

3. Describe the conditions under which each criterion may be an adequate measure of the achievement of objectives.
Answer
: Prior to describing the conditions under which each criterion may be an adequate measure of the achievement of the objectives, it is advisable that the basic objectives of decision issues must be considered that is about understanding the reason behind the interest of decision maker in certain decision. It can be stated that listing down the complete basic objectives for the decision is a tedious activity. Therefore, it consumes time, mental energy, and requires some appreciation. The criteria related to policy prescription provides various suggestive measures that can be used as help in completing the task properly and providing measures that can be used in appraising the basic objectives’ qualities. To conduct the analysis of the various options as per the objectives, attribute is required for the measurement of the objectives. Proper attributes aids in the appreciable analysis.
For decision situations, one can witness particular time when it gets considered. Prior to that time period, no awareness exists for the decision. The categorization of the decision situations can be done based on the way elevation to consciousness was done. Some of them are caused by the external incidences and factors, which is stated as triggers which state that the decisions need to be made. Triggers come from various situations or incidents that are not the part of the decision maker. Therefore, such decision situations can be referred as the decision problems. One of the other ways that the decision maker realizes the need of the decision is when he or she thinks that some control is necessary on the situation. This can be referred as the internal trigger or factor. The consideration that a decision is needed to be made is the first step towards decision making. Some examples are: Can the agency maximize effectiveness at a fixed cost of $10,000? What is the right method to improve the agency effectiveness? And so on.

4. Determine the assumptions that govern estimates of the value of time lost driving, indicating which assumptions (if any) are more tenable than others. Justify your position. 
Answer
: Walk time, wait time and in-vehicle travel time are the various aspects of the travel time savings. Travel time refers to the cost incurred by the users and the value related to this is concerned with the benefits that have been derived from the same by the traveller. If the travel time reduces then the saved time will be converted into extra time that will be available for the individual to leisure or work. The service should be reliable which directly relates to the transit service and which is directly connected with the level of service, perceptions about the quality, time spent in waiting and consistency. The trip that has unpredictable travel time will push the travel to allot more time for travelling. Mentioned below are the shifts that can be suggested to improve the reliability by the travellers:

  1. From Bus to Rail: Different modes of travel have their specific transit time depending on the challenges confronting in front. Buses can be stated as the less reliable service in comparison to the rail as the buses travel on road among various traffic challenges. The fixed routes of buses tries to reduce the transit time but traffic congestion cannot be ignored even then. On the other hand, rail provides less transit time and better service perception.

  2. From Auto to Rail: Reliability studies concerning mode change from Auto to Rail is negligible. Though from the basic consensus it can be stated that the reliability gain is equal to half of what has been observed in bus-to-rail. However, the traffic congestion is witnessed by the auto then the reliability will be almost equal to the bus to rail. 

5. Determine the best way to estimate the value of time. Justify your position.
The travel time savings need to be converted into the hours spent in the travel to the dollars which will help in the proper understanding in terms of cost incurred. The travel time has been traditionally considered as the percentage of the average wage rate. The analysis in this case considered value of time estimate (which is the percentage of average wage rate) has been derived after reviewing the other studies. The travel time has two aspects one is travelling for the work commute purpose and the non-work purpose. The value of former is taken higher than the later. The peak period of travelling has been considered to the work commute purpose and the off peak period has been referred to the non-work purpose. 
The average rate calculation will be done based on the recent calendar available from the MSESD (Minnesota State Employment Security Department) employment data on the salaries. The weighted average of the wage rate has been found to be $22.54 per hour for the three country region. The average hourly wage rate in the next two years reached #24.03 per hour which indicates the peak of VOT of $14.42 and the off-peak VOT of $12.02.

6. Determine the best way to estimate the cost of a gallon of gasoline. Justify your position.
The best way to estimate the cost of a gallon of gasoline would be to consider the distance of the trip, fuel efficiency of the vehicle, and the current price of the gas. For example, if the trip distance has been 10 miles, the fuel efficiency of the vehicle is 15 mile per gallon, and the current gas price is $20 per gallon, then it will take 0.67 gallons or 2.52 liters of gas with fuel cost of $13.33. 
The reason behind the selection of these factors is that the cost of a gallon entirely depends on these factors. The distance spent by the traveller will consume the similar amount of gasoline. The efficiency of the vehicle is the major factor behind the level of gasoline consumption by the vehicle. If the vehicle has consumes less gasoline then it is bound to incur less cost. The third factor, the price of the gasoline is determined by the international market situation which not in the control of the individuals. The combination all these three factors result into the cost of a gallon of gasoline spent. 

7. Determine the more reliable method to estimate driving speeds and miles per gallon by using (a) official statistics on highway traffic from the Environmental Protection Agency or by using (b) engineering studies of the efficiency of gasoline engines by the Department of Energy. Discuss any consequences of using one source rather than another. Justify your position.  
The graph above shows in January 2003 the average retail price for a gallon of gasoline here in the United States was $1.50; roughly equal to the real inflation adjusted price during much of the preceding half century.  Since then, the price of gasoline here in the United States has risen sharply.  It was last below $2 per gallon in February 2005, and for much of 2007, prices topped $3 per gallon.  
The Congressional Budget Office study examines the scope and intensity of consumers’ responses to the upward trend in gasoline prices that began in 2003 as mentioned above.  “Those responses have been large enough to interrupt a pattern of steady growth in total gasoline consumption dating back to 1990, the last time here in the United States where gasoline prices rose substantially” (Davis 2001).  If current high prices and consumer’s responses to them persist, the effect on overall gasoline consumption will grow stronger as older; less fuel efficient vehicles are retired and as consumers consider other, less easily implemented adjustments to their patterns of consumptions.

9. Determine which policy is preferable, (a) the 55-mph speed limit or (b) the 65-mph limit. Justify your position.
The 55-mph speed limit policy is preferable.  This is more preferable because motorists can reduce their fuel costs if they drive more slowly.  The incentive to slow down will depend on how much gasoline prices have increase, how much fuel would be saved by slowing down, and how much motorists value their time while driving.  The value of the potential fuel savings from slowing down is rather small compared with reasonable measures of many motorists’ value of time, so the likely effect of gasoline prices on highway speeds also should be rather small.  For any given reduction in speed, however, the fuel savings are greater at faster speeds and for less-fuel-efficient vehicles.

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References

  • Davis, C. Stacy. (2001). Transportation Energy Data Book: Edition 21-2001, ORNL-6966. 

  • Retrieved on May 23, 2013; from: http://cta.ornl.gov/cta/Publications/Reports/ORNL-6966.pdf

  • Dunn, William N., Public Policy Analysis, Pearson, 5th   ed., 2012, p. 74, 246-253.

  • Minnesota Department of Transportation, 2003, "Per Mile Costs of Operating Automobiles and

  • Trucks,". Retrieved on May 22, 2013; from: http://trid.trb.org/view.aspx?id=678531

  • USDOT, April 9, 1997; Revised February 2003, "Departmental Guidance on the Evaluation of

  • Travel Time in Economic Analysis Memo;". Retrieved on May 22, 2013; from: http://www.1qAq

  • dot.gov/sites/dot.dev/files/docs/vot_guidance_092811c.pdf.

  • US DOT, 2003, "Revised Departmental Guide lines: Valuation of Travel Time in Economic

  • Analysis" memorandum. Retrieved on may 22, 2013; from: http://www.dot.gov/regulations

  •  /economic-values-used-in-analysis

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