The Relationship between Cost Analysis and Program Management

Cost analysis if often viewed as applying basic principles and cost methodologies to determine total system cost. These finished estimates then flow into a decision making process and the cost estimator leaves the stage. Reality shows that the cost estimator is actually one of the main contributors to the decision making process. Our introduction to this special issue explores the areas where cost estimating plays a major role in program management in areas beyond the normal program estimate. We have included articles that show the key role estimators can play in source selection strategies and evaluation; cost of delay analysis for management decisions, earned value management methods to predict program costs; decision criteria to rank competing projects that complement traditional cost-based methods; and a new methodology for determining research and development budget profiles

The Costs and Benefits of a Comprehensive Induction Program

Until now there have been no benefit-cost studies of mentoring programs for beginning teachers to provide legislators, educational administrators, and program leaders with the kind of economic information they need for informed decision making. In a benefit-cost analysis we estimate the financial benefits of a given course of action against the actual costs, and use the resulting balance to guide decision making. Costs are either one-time, or may be ongoing. Benefits are most often received over time. In its simple form, benefit-cost analysis is carried out using only actual financial costs and financial benefits. A more sophisticated approach attempts also to put a financial value on intangible costs and benefits, a process that can be highly subjective. In order to provide an estimate of the potential return on the investment in a comprehensive mentoring program for beginning teachers we collected actual cost data for the Santa Cruz New Teacher Project across all its local contexts,calculated the measured benefits, assigning them a monetary value where possible, and computed the net present value over five years. We looked at net benefits or costs from multiple perspectives: the state, the district, the school, the teacher, and the student. The total of all these represents the net benefit or cost to society.calculated the measured benefits, assigning them a monetary value where possible, and computed the net present value over five years. We looked at net benefits or costs from multiple perspectives: the state, the district, the school, the teacher, and the student. The total of all these represents the net benefit or cost to society

Techno-economic performance analysis of biofuel production and miniature electric power generation from biomass fast pyrolysis and bio-oil upgrading

The techno-economic performance analysis of biofuel production and electric power generation from biomass fast pyrolysis and bio-oil hydroprocessing is explored through process simulation. In this work, a process model of 72 MT/day pine wood fast pyrolysis and bio-oil hydroprocessing plant was developed with rate based chemical reactions using Aspen Plus® process simulator. It was observed from simulation results that 1 kg s−1 pine wooddb generate 0.64 kg s−1 bio-oil, 0.22 kg s−1 gas and 0.14 kg s−1 char. Simulation results also show that the energy required for drying and fast pyrolysis operations can be provided from the combustion of pyrolysis by-products, mainly, char and non-condensable gas with sufficient residual energy for miniature electric power generation. The intermediate bio-oil product from the fast pyrolysis process is upgraded into gasoline and diesel via a two-stage hydrotreating process, which was implemented by a pseudo-first order reaction of lumped bio-oil species followed by the hydrocracking process in this work. Simulation results indicate that about 0.24 kg s−1 of gasoline and diesel range products and 96 W of electric power can be produced from 1 kg s−1 pine wooddb. The effect of initial biomass moisture content on the amount of electric power generated and the effect of biomass feed composition on product yields were also reported in this study. Aspen Process Economic Analyser® was used for equipment sizing and cost estimation for an nth plant and the product value was estimated from discounted cash flow analysis assuming the plant operates for 20 years at a 10% annual discount rate. Economic analysis indicates that the plant will require £16.6 million of capital investment and product value is estimated at £6.25/GGE. Furthermore, the effect of key process and economic parameters on product value and the impact of electric power generation equipment on capital cost and energy efficiency were also discussed in this study

Multi-product cost and value stream modelling in support of business process analysis

To remain competitive, most Manufacturing Enterprises (MEs) need cost effective and responsive business processes with capability to realise multiple value streams specified by changes in customer needs. To achieve this, there is the need to provide reusable computational representations of organisational structures, processes, information, resources and related cost and value flows especially in enterprises realizing multiple products. Current best process mapping techniques do not suitably capture attributes of MEs and their systems and thus dynamics associated with multi-product flows which impact on cost and value generation cannot be effectively modelled and used as basis for decision making. Therefore, this study has developed an integrated multiproduct dynamic cost and value stream modelling technique with the embedded capability of capturing aspects of dynamics associated with multiple product realization in MEs. The integrated multiproduct dynamic cost and value stream modelling technique rests on well experimented technologies in the domains of process mapping, enterprise modelling, system dynamics and discrete event simulation modelling. The applicability of the modelling technique was tested in four case study scenarios. The results generated out of the application of the modelling technique in solving key problems in case study companies, showed that the derived technique offers better solutions in designing, analysing, estimating cost and values and improving processes required for the realization of multiple products in MEs, when compared with current lean based value stream mapping techniques. Also the developed technique provides new modelling constructs which best describe process entities, variables and business indicators in support of enterprise systems design and business process (re) engineering. In addition to these benefits, an enriched approach for translating qualitative causal loop models into quantitative simulation models for parametric analysis of the impact of dynamic entities on processes has been introduced. Further work related to this research will include the extension of the technique to capture relevant strategic and tactical processes for in-depth analysis and improvements. Also further research related to the application of the dynamic producer unit concept in the design of MEs will be required

An application of multiattribute decision analysis to the Space Station Freedom program. Case study: Automation and robotics technology evaluation

The results are described of an application of multiattribute analysis to the evaluation of high leverage prototyping technologies in the automation and robotics (A and R) areas that might contribute to the Space Station (SS) Freedom baseline design. An implication is that high leverage prototyping is beneficial to the SS Freedom Program as a means for transferring technology from the advanced development program to the baseline program. The process also highlights the tradeoffs to be made between subsidizing high value, low risk technology development versus high value, high risk technology developments. Twenty one A and R Technology tasks spanning a diverse array of technical concepts were evaluated using multiattribute decision analysis. Because of large uncertainties associated with characterizing the technologies, the methodology was modified to incorporate uncertainty. Eight attributes affected the rankings: initial cost, operation cost, crew productivity, safety, resource requirements, growth potential, and spinoff potential. The four attributes of initial cost, operations cost, crew productivity, and safety affected the rankings the most

Optimal waste stream discharge temperature selection for dryer operations using thermo-economic assessment

A typical drying process that has liquid and gas discharge streams has been analysed and the impact of selecting various combinations of soft temperatures on heat recovery, utility targets, area targets, capital cost and total cost is reported. The method is based on the plus-minus principle and traditional pinch analysis methods for utility, area and capital cost targeting with the modification of using a ΔT contribution. Results show that there is significant benefit from optimising discharge temperatures for total cost. To achieve minimum energy consumption and total cost, heat recovery from the dryer exhaust air is necessary. Heat recovery from liquid heat sources is shown to be preferable over gas streams due to a higher film coefficient resulting in less heat exchanger area and capital cost. There is also value in making process modifications, such as combining streams or removing small streams to be solely heated by utility, to reduce the number of network heat exchangers. For the best case, the discharge temperatures of the leaving streams are 18.0 °C for water condensate (liquid stream) and 52.4 °C for the exhaust air (gas stream)

Benefit-Cost Analysis of Semi-Automated Technology Implementation for Outbound Logistics Process: A Case Study

The need of automated warehouse system arises from the fact that manual process could cause human error which may affect warehouse productivity. Automated warehouse could help the company to reduce its operation time, response time, increase accuracy, and increase warehouse productivity. Kamadjaja Logistics, one of Indonesia logistics company, still implement manual process in all of its process. Kamadjaja Logistic wants to automate its outbound logistics process in order to obtain faster delivery time, decreasing labor cost, and increasing labor efficiency. There are two alternative technologies suggested, Actiw LoadMatic and ATLS Skate Loader. Both alternative will be analyzed trough benefit cost analysis in order to know whether it is financially feasible to be run. The result obtain from LoadMatic is 1.1912 while Skate System value is 1.2600. Based on the benefit cost value, the suggested technology to be implement is Skate System. Besides benefit cost, the existing condition will be analyzed through work sampling analysis. Based on work sampling analysis, all of the labor in outbound logistics are having a higher nonworking activity rather than working activity. Sensitivity analysis will also be done in order to obtain which variable is the most sensitive one that affecting the result of benefit cost value. The most sensitive variable according to sensitivity analysis is investment cost

Operational asset replacement strategy : a real options approach

This article analyses the problem of replacement by investigating the optimal moment of investment replacement in a given tax environment with a given depreciation policy. An operation and maintenance cost minimization model, based on the definition of equivalent annual cost, is applied to a real options paradigm. The developed methodology allows for an innovative evaluation of the flexibility of replacement process analysis. A new two- factor evaluation function is introduced to quantify decisions of asset replacement under a unique cycle environment. This study improves upon previous findings in the literature as it accounts for autonomous salvage value processes. Based on partial differential equations, this model achieves a general analytical solution and particular numerical solution. The results differ significantly from those observed in one-factor models by showing evidence of over-evaluation in optimal levels of replacement, and by confirming suspicions that different types of uncertainties produce non-monotonous effects on the optimal replacement level. The scientific contribution of this study lies in new and stronger approaches to equivalent annual cost literature, supplying an algorithm for operation and maintenance cost minimization that is conditioned by autonomous salvage value. This study also contributes to the real options literature by developing of a two-factor model with Brownian processes applied to asset replacement.info:eu-repo/semantics/publishedVersio