Fire marginal investment analysis

Abstract: The use of marginal investment analysis investment analysis of technology for the fire, the fire safety benefits objectively clear that there is a maximum, the fire in the objective investment decisions also need to fire with the best investment as a basis for decision making, a clear investment in the fire of truth too far, to make fire fighting more effective.

Keywords:: Fire, marginal

Any kind of social practice, have to put some human, material and other resources. Implementation of fire safety, is bound to put some resources, or can not carry out fire safety activities. In recent years, the fire situation is very grim in China, to meet the and the need to fight the fire, for fire safety investment gradually increased, therefore, the best ratio of investment to establish the fire, the establishment of fire and reasonable investment structure, investment analysis of the factors that affect the fire development and fire investment law to provide fire investment reasonable evaluation techniques and methods, has become an important research subject urgently.


A marginal investment analysis

1.1 The law of diminishing marginal utility
Marginal utility, an increase of one unit of consumption goods caused by the increase in the amount of total utility. All the marginal utility of and composition of the total utility. There is the law of diminishing marginal utility, is the fire fee in the amount of other goods under the same conditions, When the consumption of an item increases, the continuous increase in units of items provided by each utility will decrease. For the diminishing marginal utility has several explanations why, the better interpretation is to imagine each item (such as water) has several use, drinking, laundry, gardening, and then assumed by consumers to the importance of these uses to grade, so consumers must put the first unit of water used in the most important purposes, namely, drinking, and then , then other units in order to meet the other uses water, laundry or water the flowers. This use of the different items to meet their order of importance has declined in use, so the marginal utility of the article is bound to increase with the emergence of consumption decreasing trend.

1.2 Elements of a change in the production and the law of diminishing marginal returns
Changes in the production of a factor, refers to all factors of production inputs, in addition to one is to change, other changes are in the case of fixed production. Total factor productivity curve is a function of changes in the conventional image. It first to increase the amount of increase, then decrease the amount of increase to maximum, then drops. output slope of the curve itself is the marginal product of factors. output slope of any point on the curve of the point made by the slope of the tangent determined. gradually descending the slope of change in total output, when output reaches its maximum, the slope is zero, when the output falls, the slope is negative, this is the diminishing marginal product of the situation. the law of diminishing marginal returns means that relative to other variables, the certain level of technology to increase the amount of certain income will increase total output, but after a certain point, due to the increased volume of the same people will probably increase the amount becomes less and less. This is because When the changes in factor inputs less than the time change and more of the same elements are elements which play a role together, then the same elements are more abundant, relatively speaking, when changes in the number of elements rises, variable elements of each unit only with less and less with the same elements play a role, so that each unit of the role of variable factor but limited, results in increased production landscape less and less, or even become negative value.

The law of diminishing marginal returns is not a theory based on principles to guide out of the theorem, it is only based on the actual situation of production and technology to observe, the resulting empirical assertion. But this rule change only after a certain point into increased into play.

1.3 The law of increasing marginal costs
Marginal cost is the delivery of an additional unit of output caused by the increase in the amount of the total cost. As the law of diminishing marginal returns the result, the time when certain elements are fixed. But only when the adjustment factor of change, both average and marginal production is first increasing and then decreasing. In the case of constant factor prices, average and marginal increases in production stage, the average total cost and marginal cost will decrease, when the average and marginal production is decreased, the average total cost and marginal cost increase. The average total cost and marginal cost decreases after the first increment. the marginal cost with marginal production, but proportional to the trend of law, called the law of increasing marginal cost.


2 Basic economic theory fire

2.1 The principles of fire consumed the lowest investment
Fire safety involves two kinds of economic consumption: the cost of fire losses and fire safety or fire investment, of both, and that the total economic burden of fire safety, security burden with the function B (s) that was
B (s) = L (s) + C (s)
Where: L (s) relief loss function,
C (s): fire investment function,
s: safety.

B (s) reflect the total consumption of fire safety, see Figure 1. Can be seen. They are a function of s safety, that is also suffering from the impact of safety s, when the horizontal axis the point that safety on the move to a position 80 in time to meet the investment in fire losses and fire and that the minimum amount of fire safety design, meaning that they intersect to the point that fire losses decline in investment in the proper fire to at least Bmin.

2.2 The largest investment-effective fire
Security burden function reflects the effectiveness of fire safety rules, the safety benefits in Figure 1 can make the following analysis:
The security value of the range that is divided into 3 S S2
s S2 loss, it is safe and of high cost, less comprehensive benefits also need to strive to maintain security, improve the technological level, reduce costs and improve overall efficiency.


3 Fire marginal investment analysis

3.1 Basic Concepts
Law of increasing marginal costs we use to analyze the fire investment, the marginal investment must be clear fire, fire the concept of marginal benefit. Fire safety margin for each investment is increasing - a unit, the incremental investment in the fire. Similarly, the marginal effectiveness of fire is the safety for each additional - a unit, the incremental benefits of fire safety.

The real benefits of fire safety can not be a comprehensive assessment of the macro aspects of this we are only introduced the measure of economic efficiency of fire safety.

3.1.1 Definition of effective fire safety
Economic benefits of fire safety in two specific forms can be
(1) with the "interests" concept to define, with the following "ratio method" formula:
E = Safety Fire Safety economic output B / C safety inputs
(2) "profit" concept to define, with the following "difference method" formula:
E = effectiveness of fire safety safety safety input output volume of B-C
Economic evaluation of the fire is an important indicator of fire safety activities.

3.1.2 Fire Safety output
Based on the foregoing the content, can be drawn:
B = Fire Safety output value-added output impairment output B1 + B2
(1) Fire Safety "impairment output"
Fire Safety impairment output B1 = early (safety measures) losses - later (security measures) loss
Reduce the losses include loss of the amount of injuries, fires reduce the amount of property damage, fire, other economic consumption reduction.

(2) Fire Safety output value B2
Fire safety, fire safety value-added output value of the positive contribution of production, the current quantitative research in this area is also less, here we put forward the "Contribution Factor", that is, value-added output of safety is calculated as: fire safety value-added output of B2 = safety contribution rate �� GDP.

Links to Research Papers Download http://www.hi138.com 3.2 Fire marginal investment analysis
Due to the current fire safety for the inconvenience to use a volume that, but considering the fire safety of investment and a positive correlation between the fire investment C��ks, fire damage was negatively correlated with safety, that L��k / s, we obtain C ��k / L, that is, the fire of investment and a negative correlation between fire losses.

So, you can use the same amount of an additional safety, the fire increased investment amount and a reduction of fire losses, approximately as the marginal investment and the marginal loss, this treatment does not affect the most cost-effective investment in the solution point.

Fire damage from the fire and the incremental investment function, you can make a marginal loss of investment and marginal ML MC's diagram, shown in Figure 2.

Which are: Fire safety margin increased with the investment rise, while the safety

Increase, bringing the marginal loss decreased gradually. At a low level of safety conditions, the marginal damage is high, when the safety is high, such as 99%, when marginal damage is low, but the marginal investment in just the opposite.

When S0 is the best level of safety, the Fire marginal amount equal to the marginal loss of investment, which means that the fire increases the amount of investment is equal to the reduction of fire loss, this time, fire safety benefit is reflected in the indirect benefits and potential benefits on the (usually many times greater than the direct benefits), if the security is low, increase the safety margin is greater than the marginal loss of investment, indicating that impairment is greater than the incremental cost of the incremental, therefore, is to improve safety necessary and worthwhile, if the safety of more than S0, then the enhanced safety of the investment is greater than the marginal cost of marginal losses, if the consideration exceeds the number of potential safety benefits and potential indirect benefits, we also can not be compensated, which means that fire investment is not effective. usually more than safety S0, a large increment of investment security loss of reduction than that with the fire safety benefits over the extent of the decline, this time, it can be understood as fire control is too strict. Therefore, from a cost-effective angle for the best efficiency point for the fire safety of investment point of reference to guide fire investment decisions.

3.3 The point of the practice of dynamic analysis of the best investment
Fire practice, a variety of factors continue to change, so the best investment for the definition of the point should be fully taken into account.

(1) to consider the enormous social investment in the fire and the potential economic benefits, will increase the overall effectiveness of investment. Thus, the marginal loss (marginal benefit) curve upward objective, the best safety of the new increase of the S0 to S0, the best fire accordingly should be appropriate to increase investment, which can expand investment and increase safety.

(2) Fire practice, constantly using new science and technology, advanced management practices, and to enhance awareness of the broad masses of fire, and fire professionals, professional quality, fire safety investments made to improve efficiency, the marginal investment curve is shifted to Mc . The new best safety S0> S0, this time, less investment in the case of marginal C0 (3) take full account of the potential fire investment economic and social benefits, the marginal loss curve will move up, taking full advantage of new science and technology and advanced management approaches to improve the effect of the fire activity will make the marginal investment curve down. In this way, you can not increase or small increase in the marginal investment in the circumstances, greatly improve the fire fighting effectiveness. From another perspective, to ensure safety in the same situation, you can reduce the investment or the cost of the fire.


4 Conclusion

Effectiveness of fire safety objective has a maximum investment of this point the fire is the best fire investment, often the best investment in fire safety is that the marginal investment is equal to the marginal loss in place, investment available at this point the greatest economic , taking into account the safety requirements of people is as high as possible and fire investment potential enormous social and economic benefits, the economic capacity to allow proper consideration under the conditions of the volume of investment to improve the fire, can greatly improve the safety and overall effectiveness. The fundamental way to achieve fire safety is to rely on scientific progress, the use of new technologies and advanced management methods, improve people's awareness and technical quality of the fire, rather than to maximize investment.

In practice, the fire is a complex and diverse investment issues, with national, regional or higher authorities for the region, industry or enterprise's annual investment, with a company, a construction project investment in the fire of investment allocation. In short , fire investment decisions, the need for longitudinal comparative analysis of the macro guide investment decisions in different periods, but also requires horizontal comparison and optimization in order to make micro-investment decisions.

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