Title: A Look Under the Hood
1A Look Under the Hood
Virtual U
- William F. Massy
- The Jackson Hole Higher Education Group, Inc.,
and the National Center for Postsecondary
Improvement, Stanford University - Stanford, CANovember 3, 2000
2What Well Cover
- Architecture
- Student sims
- Faculty sims
- Response functions
- The 12 model groups
3Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
4Data Sources
- Data were collected by the Institute for Research
on Higher Education, University of Pennsylvania - Secondary source data (including IPEDS, College
Board, NELS) e.g., - faculty student numbers, diversity, salaries,
financial profiles, financial aid, student
segment data. - Scavenger hunt e.g.,
- curricular requirements, graduation rates,
athletic costs revenues, facilities costs,
faculty time profiles.
5Virtual U Architecture
Students
Resource allocation
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
6Resource AllocationProcedure for Balancing
Priorities
- Simulates the universitys budget office.
- Presidential inputs
- targets priorities upper and lower limits.
- Procedure
- Minimize the weighted sum of the squared
differences between the result and the target,
while observing the limits to the extent
possible. - The results are shown in the right-hand column.
- Presidents can change the inputs and ask the
budget office to repeat the procedure.
7Resource AllocationStage 1. Revenue and
Expenditure
What gets balanced
- Growth rates of revenue (gR)
- tuition, financial aid, endowment spending,
indirect costs on research (given admission
targets) - Growth rates of expense (gE)
- faculty and staff salaries, real operating budget
growth, transfer to plant - The surplus or deficit
Reality check
(1gR) Revt1 (1gE) Expt1 Surplus (deficit)
8Resource AllocationStage 2. Allocations
What gets balanced
- Growth rates of expense for individual functions
and offices (gi) - faculty expenses (excluding the salary increases
covered in Stage 1) - non-faculty departmental expense, libraries,
information technology, athletics, student life,
development office, administration, OM,
enrollment management
Reality check
Sumi (1gi) Expi, t 1 (Real budget growth)
Expt 1
9Resource AllocationStage 3. Faculty Hiring
What gets balanced
- Departmental faculty budgets
- faculty budgetd (excluding the salary increases
covered in Stage 1) - new faculty hiresd faculty budgetd cost of
continuing facultyd - The president can override the budget.
Reality check
Sumd Faculty budgetsd total faculty expense
10Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
11Enrollment Management
- Student application and enrollment decisions are
simulated for seven student segments. - Decisions depend on institutional
characteristics, tuition, and financial aid
policies. - Admission decisions allocate the target intake
according to institutional priorities. - academic, extracurricular, and athletic
performance gender minority status - Procedure takes account of prior yield rates.
12Student Segmentation Scheme
Extracurricular index (v2)
Membership
5.5
4.0
0.0
10.0
1. Blue Chip
5.8
2
Academic
2. Scholar
9.2
1
7.0
index
3. ExtraCurr.
5.8
4
5.5
5
(v1)
4. Athlete
8.3
6
3
5. Balanced
25.7
4.0
6. Average
30.5
7
7. Stretch
14.7
0.0
Gender, minority status, and athletic ability are
included in the database.
Based on the National Education Longitudinal
Survey (NELS)
13Simulated Students
- Program level and year in program
- Gender/ethnic group
- Talent indices
- academic, extracurricular, athletics (L1 only)
- Financial need status (undergraduate only)
- Major
- undergrads decide after year 1
- Courses passed
- Satisfaction indices
- academic, extracurricular, athletics (L1 only)
14Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
15Student Model
- Students take courses graduate when theyve
accumulated enough credits. - Separate requirements for general education
major. - Courses may be full denial may delay progress.
- Failure probability rstudent talent, ed
qualty - Student acad satisfaction red quality,
libraries IT, course denials, stuLife,
athletics record - Pr(dropout) rstudent satisfaction (acad, x-c,
ath), course failures, diversity index - Students(t) students (t 1) graduates
dropouts new matriculants
16Response Functions
Other features
Logistic (S) curve
1. Multiple variables apply response functions
first, then take the weighted sum.
2. Latency makes the effect evolve
graduallyy(t) l y(t1) (1l)
x(t),where x(t) is the weighted sum.
Dual logistic curve
17Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
18Faculty Hiring
- Number of hires departmental priorities are
determined by Resource Allocation. - President sets the priority sliders
- new blood (asst prof) leadership (full prof)
cost containment (low salary) gender/ethnic
adjunct talent profile. - Model predicts market salaries, then uses linear
programming to allocate the available hires
according to priorities.
19Simulated Faculty
- Name, department
- Rank, age, time at institution, off-duty term
- Talent indices
- teaching, research, scholarship (not adjunct)
- Salary
- Performance
- teaching, research, scholarship (not adjunct)
- Sponsored research
- current projects proposals outstanding
- Satisfaction
20Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
21Faculty Model
- Faculty teach, do research and scholarship.
- Teaching perf rtalents, time distrib, acad
support - Scholarship perf rabove, with different
weights - Research perf rabove, plus direct sponsRes
- Faculty satisfaction rsalary, teaching
load, diversity index, perfVsTalent,
discTimeStrain, dept acad standing, promotion
difficulty asst - Pr(departure) rsatisfaction
- Pr(promotion) rperformance, prom. difficulty
- Faculty(t) faculty(t 1) departures hires
22Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
23Teaching Model
- Course demand student sign-ups
- depend on remaining requirements by field,
prerequisites, and target cohort of course - Course Supply faculty assignments
- depend on course type mix, normal class sizes,
normal teaching load stretch factors. - Matching up supply and demand
- Students admitted to courses when space is
available. - New sections opened when faculty are available to
teach otherwise the course is closed. - Ed. Quality rfacPerfs, edDevTime, IT, class
size
24Research Model
- Profs quality drivers rres talent, res
perf (t1), dept acad standing (t1), institution
al prestige (t1) - Prproposal rfield, quality drivers, res
time, docStuQual, current projects - Prproject size rfield, quality drivers
- Praward rquality drivers, indCostRate
- University overhead recovery indCostRate (tota
l research volume)
25Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation
26Student Life and Athletics
- Student life satisfaction rstudent
x-c talent, studentLife, athletics - Student athletics satisfaction
rstudent athletics talent, athletics record - Athletics record rNCAA level, athletics, top
athletes, average athletic talent - Football for men Basketball for women
- Changing NCAA level changes spending talent
requirements and revenue expectation.
27Development and Endowment
- Monthly gifts rdevelop, inst
prestige, alumni morale, athletics record - Designated for current use, endowment, and
facilities. - Alumni morale rinstPrest, surplus(def),
athPerf - Investment return fasset allocation
- Expected return is based on finance research.
- Asset allocation is set by the president.
- Endowment spending (spending rate) (smoothed
endowment market value) - Spending rate is determined in Resource
Allocation. - Smoothing is based on 3 or 5-year moving average.
28Facilities
- Deferred maintenance rOM, space in use,
deferred maintenance (t1) - Space need fstudent faculty numbers by
dept, total operating exp - New space is built to meet need if funds are
available. - Failure to meet need hurts performance and
morale. - Funds come from Facilities Reserve and new debt.
- Facilities Reserve comes from the budget and
gifts. - Percent funded by debt and the internal debt
limit are presidential policies. - External debt capacity fassets liabilities
29Virtual U Architecture
Students
Teaching
Studentsims
Enrollmentmanagement
1. Revenue expenditure 2. Allocation 3.
Faculty hiring
Facultyhiring
Facultysims
Research scholarship
Faculty
Financial results
Performance indicators
Trustee evaluation