Summarize section 2.3.2 including the influence chart

Section 2.3.2 is about using influence charts with income statements. We can see with the influence chart that the objective is profits. To get to the objective, we will need to generate revenue which is created by the price of the product. Total cost is arrived by adding the variable cost and the fixed cost. Variable cost is determined by the quantity sold plus the unit price. The quantity sold is also related to the total revenue.

Summarize section 2.3.1 including the influence chart

Section 2.3.1 is about increasing profits by setting the appropriate price of a product. The objective is Profit. To determine the profit, the company will subtract the total cost from the total revenue. To find the total cost, they will need to determine the fixed and variable costs. Variable cost will be broken further down into the quantity sold and the unit cost. Each of these parts will then give the company a high level idea how to determine the appropriate price for the product.

Influence Chart for the Example Invivo Diagnostics

Principles/Steps/Symbols in Building Influence Charts

Influence charts are free form visual aides to help problem solvers get a high level view of their issues. Theses charts use a variety of symbols to show each part of the problem.





The hexagon represents an the objective or desired outcome. This is the end point of the solution.










The circle represents a variable or unknown value.










The triangle represents a fixed input parameter.










The double circle represents a random input parameter.










The square represents a decision.












Influence charts are similar to flow charts but without the strict rules. Think of an influence chart as a sketch of the problem that needs to be solved.