What does the Crystal Ball Variability do?

Against each of the Direct and Indirect cost levers is a Variability percentage.  The variability relates to volume changes in the business and how much Direct and Indirect costs rise and fall in conjunction with sales (volume).

If volume is impacted by the decision, consider the variability.  For example, if Volume increases by 10% and the Direct Costs Other variability is set to 90%, then Direct Costs Other are modelled to increase at 90% of 10% (or 9%). The variability impacts the increase or reduction of costs when volume changes.

Current capacity will have an integral impact on this question. If there is capacity to increase volume without additional costs, then variability should be 0.  If there is no capacity to increase volume without additional costs, then variability should be >0.

In RTC they default to 90% for Direct Costs and 25% for Indirect Costs.  These can be changed to match your business.

Note that for the Direct Costs Other and Indirect Costs Other levers, the increase will exclude depreciation because a volume increase will not increase depreciation.