Would more places actually fix the shortfall?
Put in the places, the applications, the fee and the costs and get back the odds the surplus holds. A professional certificate with a hard cap of thirty places a cohort. The cap means a good year cannot be very good while a bad year can be very bad, and the model shows what that does to a surplus that looked comfortable.
Words on this sheet
- Cohort: One group who start together and are counted together: an intake of students, a class year, or the customers who joined in the same month.
- Bursary: A fee reduction or grant given to some students, so fee income is less than the sticker price times the head count.
School Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
Will the Programme Cover Its Costs?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
- Typical year
- $18,343 median surplus on two cohorts of thirty
- Average year
- $13,390 dragged down by the intakes that miss
- Does not cover
- 17.4% of years: about one in six
- A bad year
- -$13,059 P5 surplus
Two cohorts of thirty at $2,450, with 18% of students on a half-fee bursary, against a tutor at $26,500 a cohort, $13,500 of marketing a cohort, $140 a head of materials and $22,000 of program overhead. That is $23,370 of surplus and a break-even of about 49 enrollments against the 60 places on offer, which reads as eleven students of headroom.
Click Run with the applications, the conversion rate and the bursary share on ranges, and look at the enrollment line before the money. Enrollments average 55.6 a year, but the median is 59.6 and both the P90 and the P95 are exactly 60. That is what a cap does: nearly half the runs fill both cohorts and stop there, and the rest come up short.
The distribution has a wall on the right and a long tail on the left, so the average year is nearly four students below the typical year. Surplus follows the same shape: an average of $13,390 against a median of $18,340, a P5 of minus $13,059, and a does-not-cover flag of 16.3%. Now the second run, and it is the one that saves a department from spending money in the wrong place.
The obvious response to a capped program is to raise the cap. Change the places offered from 30 to 38 and rerun: surplus rises from $13,390 to $21,445, and the chance of not covering costs stays exactly where it was at 16.3%. Eight more places are worth about $8,100 a year of expected surplus and they change the risk of a loss by nothing at all, because the loss never happens in a year when the cohort filled.
If the problem you are solving is the deficit, the cap is not where it lives. The break-even is, and it sits at about 49 enrollments with very little spread. The tornado ranks applications first at 0.65, the conversion rate second at 0.47 and the bursary share third at -0.37, and the bursary share is worth pointing at because it is the only one of the three that nobody treats as a revenue line.
What the model cannot tell you: it carries one tutor cost per cohort whatever the size, which is right up to a point and wrong past it, and it has no view of students who withdraw after week three, which on most programs is between 5% and 10% of the fee. To make it yours, use your own application count and offer acceptance rate from the last four intakes, put your real tutor and marketing cost in, and set the bursary share from your own admissions record.
The model
It arrives on a tab called Template: Programme Surplus:
| Places offered per cohort (seats) | 30 |
| Cohorts this year | 2 |
| Applications per cohort (applications) | 74 |
| Offer to enrollment rate | 0.42 |
| Enrollments per cohort (students) | 30 |
| Enrollments this year | 60 |
| Fee per student ($) | 2450 |
| Share of students on a bursary, fee waived at half | 0.18 |
| Fee income ($) | 133,770 |
| Tutor cost per cohort ($) | 26500 |
| Marketing per cohort ($) | 13500 |
| Materials and platform per student ($) | 140 |
| Program overhead for the year ($) | 22000 |
| Total cost ($) | 110,400 |
plus 3 more rows on the sheet.
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Is the cheapest fix on your risk list the best one?What Could Go Wrong This Term?
- Which class should go to the hired hall?Fit the Timetable Without a Clash
- Did the workshop actually move anyone?Did the Training Change Each Person's Score?
- How many teachers will next summer actually need?How Many Students Next Term?
- Build the course yourself or license one?Is the New Course Worth Building?
- Does a small cohort need fewer replies?How Many Responses for a Course Survey?
Every model like this one, and the method behind them: Monte Carlo simulation.