Financial evaluation and decision making in the swine breeding herd.
As the swine industry continues to evolve and develop a greater business orientation--one that demands justification of costs, benefits, and risk-exposure--the veterinarian will be confronted with the need to develop an economic basis to supplement the biologic. The profession should view such a challenge as an opportunity to broaden its role in serving the businesses that make up the industry. However, to be effective in such an expanded role requires that the veterinarian develop a good working knowledge of risk and risk management as well as the role played by economic evaluation techniques used in financial evaluation in the risk management process. Several potential advantages exist for the veterinarian who determines to expand his or her risk management role by using financial evaluation in the course of day-to-day practice routine: Additional service or consulting income may be generated through evaluating alternatives through decision analysis. Client confidence may be strengthened in the veterinarian and in the recommendations made. The costs of consulting services and health products for the client may be viewed as income-generators instead of being viewed solely as expenses. Referrals of additional progressive clients may be generated by satisfied current clients. The veterinarian may achieve personal satisfaction through substantiating his or her recommendation beyond clinical or experimental judgment. With the capability of using financial evaluation techniques in the evaluation and justification of recommendations comes significant responsibility. Reliance upon financial evaluation techniques as a more objective approach in the management of risk for clients carries with it an inherently greater degree of trust. Such trust must be deserved. The universal adage "garbage in, garbage out" applies directly to financial evaluation. Financial evaluation techniques have the potential to provide the decision-maker with objective and accurate analysis, improving the probability of choosing an optimal course of action for the business. However, the objectivity and accuracy achievable is highly dependent upon the quality and quantity of information used in the analysis. Veterinarians must be cognizant of the increased responsibility demand placed on those using financial evaluation techniques to direct the course of action for their clients. Financial evaluation tools are available to decision-makers that may improve the objectivity of the decision-making process, providing for a greater degree of confidence in the expected outcome. Stated another way, these tools can reduce the number of surprises a decision-maker encounters as a result of the decisions made.(ABSTRACT TRUNCATED AT 400 WORDS)
Polson
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Department of Clinical and Population Sciences, University of Minnesota College of Veterinary Medicine, St. Paul.
Marsh
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WE
Dial
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GD
D000822:Animal Husbandry / Q000191:economics*; D000818:Animals; D001947:Breeding / Q000191:economics*; D003661:Decision Support Techniques; D012306:Risk; D013552:Swine / Q000502:physiology*