• Title/Summary/Keyword: Cost approach

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PROBABILISTIC MEASUREMENT OF RISK ASSOCIATED WITH INITIAL COST ESTIMATES

  • Seokyon Hwang
    • International conference on construction engineering and project management
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    • 2013.01a
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    • pp.488-493
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    • 2013
  • Accurate initial cost estimates are essential to effective management of construction projects where many decisions are made in the course of project management by referencing the estimates. In practice, the initial estimates are frequently derived from historical actual cost data, for which standard distribution-based techniques are widely applied in the construction industry to account for risk associated with the estimates. This approach assumes the same probability distribution of estimate errors for any selected estimates. This assumption, however, is not always satisfied. In order to account for the probabilistic nature of estimate errors, an alternative method for measuring the risk associated with a selected initial estimate is developed by applying the Bayesian probability approach. An application example include demonstrates how the method is implemented. A hypothesis test is conducted to reveal the robustness of the Bayesian probability model. The method is envisioned to effectively complement cost estimating methods that are currently in use by providing benefits as follows: (1) it effectively accounts for the probabilistic nature of errors in estimates; (2) it is easy to implement by using historical estimates and actual costs that are readily available in most construction companies; and (3) it minimizes subjective judgment by using quantitative data only.

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A Study on the Usefulness and Cost Analysis of Busan Port Container Terminal by Time-Driven ABC (TDABC에 의한 부산항 컨테이너터미널 원가분석과 유용성에 관한 연구)

  • Ryu, Dong-Ha;Ahn, Ki-Myung;Hwang, Sung-Gu
    • Journal of Korea Port Economic Association
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    • v.30 no.3
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    • pp.89-120
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    • 2014
  • The purpose of the study is to suggest a new approach to the terminal operators in order for them to efficiently control their operation cost and support the strategic decision making system and build a performance evaluation process through the systematic cost analysis approach. This study implemented terminal cost analysis based on the traditional cost system, ABC and TDABC and compared the results of each approach. Throughout the study, the usefulness of TDABC was proved in finding operational problems and suggesting countermeasures for improving cost effectiveness and minimizing unused cost.

A Cost/Worth Approach to Evaluate UPFC Impact on ATC

  • Rajabi-Ghahnavieh, Abbas;Fotuhi-Firuzabad, Mahmud;Shahidehpour, Mohammad;Feuillet, Rene
    • Journal of Electrical Engineering and Technology
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    • v.5 no.3
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    • pp.389-399
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    • 2010
  • Available transfer capability (ATC) is a measure of the transfer capability remaining in a transmission system. Application of unified power flow controllers (UPFCs) could have positive impacts on the ATC of some paths while it might have a negative impact on the ATC of other paths. This paper presents an approach to evaluate the impacts of UPFCs on the ATC from a cost/worth point of view. The UPFC application worth is considered as the maximum cost saving in enhancing the ATC of the paths due to the UPFC implementation. The cost saving is considered as the cost of optimal application of other system reinforcement alternatives (except for UPFC) to reach the same ATC level obtained by UPFC application. UPFC application costs include the maximum cost of alleviating the probable negative impact on the ATC of some paths caused by implementing UPFCs. Optimal system reinforcement is used for systems with UPFCs to determine the aforementioned cost. The proposed method is applied to the IEEERTS and the results are evaluated through a sensitivity analysis. The cost/worth of UPFC application is also used to develop an index for optimal UPFC location and the results are compared with those of other indices. A comparison is finally made with the results obtained using an existing ATC allocation profit-based approach to determine UPFC application worth.

Evaluation of Optimal Transfer Capability in Power System interconnection (연계된 계통간의 최적 송전용량 산정)

  • Son, Hyun-Il;Choi, Ah-Reum;Lee, Sung-Hoon;Kim, Jin-O;Jeon, Dong-Hoon
    • Proceedings of the KIEE Conference
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    • 2009.07a
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    • pp.195_196
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    • 2009
  • As the electrical power industry is restructured, the electrical power exchange is becoming extended. One of the key information used to determine how much power can be transferred through the network is known as available transfer capability (ATC). To calculate ATC, traditional deterministic approach is based on the severest case, but the approach has the complexity of procedure. Therefore, novel approach for ATC calculation is proposed using cost-optimization method in this paper, and is compared with well-being method and risk-benefit method. This paper proposes the optimal transfer capability of HVDC system between mainland and a separated island in Korea through these three methods. These methods will consider production cost, wheeling charge through HVDC system and outage cost with one depth (N-1 contingency).

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A Study on the Analytical Approach for Reliability Assessment Considering Interruption Cost in Distribution Systems (정전비용특성을 고려한 배전계통의 신뢰도평가에 관한 연구)

  • Song, Seok-Hwan;Rho, Dae-Seok;Choi, Jae-Seok;Cha, Jun-Min
    • Proceedings of the KIEE Conference
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    • 2001.07a
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    • pp.270-272
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    • 2001
  • This paper deals with the analytical approach for the reliability assessment in radially operated distribution systems. The approach can estimate the expected reliability performance of distribution systems by a direct assessment of the configuration of the systems using the reliability indexes such as NDP(Non-Delivery Power) and NDE(Non-Delivery Energy). The indexes can consider the number and configuration of the load, but can not consider the characteristics of the load which is the one of the most important factor in the investment cost for the distribution systems. Therefore, This paper presents the new indexes considering the expected interruption cost for the load section and shows the effectiveness by simulating at the model systems.

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A Load Flow Based Approach to Transaction Cost Allocation in Transmission Network (조류계산에 기초한 탁송요금 계산)

  • Park, Young-Moon;Lim, Jung-Uk;Won, Jong-Ryul;Park, Jong-Bae
    • Proceedings of the KIEE Conference
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    • 1997.07c
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    • pp.1149-1152
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    • 1997
  • This paper describes a novel approach for allocating transmission costs among users of transmission services. In the suggested approach, the cost share of each participant is proportional to amount of its line flow. To develop individual user's impact, the line utilization factors of each participant are derived by power flow equations of all nodes (i.e., load-flow equations). To deal With the slack bus problem inherent in the conventional load-flow analysis more practically, a additional power supply/demand balance equation is incorporated. Although the developed allocation rule is basically similar to the existing MW-mile method in the aspect of embedded cost allocation, it does not require to get load flow solutions of each wheeling transaction when multiple transmission transactions are considered.

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Optimization of Computer Network with a Cost Constraint (비용 제약을 갖는 컴퓨터 네트워크의 최적화)

  • Lee, Han-Jin;Yum, Chang-Sun
    • Journal of Korean Society of Industrial and Systems Engineering
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    • v.30 no.1
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    • pp.82-88
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    • 2007
  • This paper considers a topological optimization of a computer network design with a cost constraint. The objective is to find the topological layout of links, at maximal reliability, under the constraint that the network cost is less or equal than a given level of budget. This problem is known to be NP-hard. To efficiently solve the problem, a genetic approach is proposed. Two illustrative examples are used to explain and test the proposed approach. Experimental results show evidence that the proposed approach performs more efficiently for finding a good solution or near optimal solution in comparison with a simulated annealing method.

Economic Power Dispatch with Discontinuous Fuel Cost Functions using Improved Parallel PSO

  • Mahdad, Belkacem;Bouktir, T.;Srairi, K.;Benbouzid, M.EL.
    • Journal of Electrical Engineering and Technology
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    • v.5 no.1
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    • pp.45-53
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    • 2010
  • This paper presents an improved parallel particle swarm optimization approach (IPPSO) based decomposed network for economic power dispatch with discontinuous fuel cost functions. The range of partial power demand corresponding to the partial output powers near the global optimal solution is determined by a flexible decomposed network strategy and then the final optimal solution is obtained by parallel Particle Swarm Optimization. The proposed approach tested on 6 generating units with smooth cost function, and to 26-bus (6 generating units) with consideration of prohibited zone effect, the simulation results compared with recent global optimization methods (Bee-OPF, GA, MTS, SA, PSO). From the different case studies, it is observed that the proposed approach provides qualitative solution with less computational time compared to various methods available in the literature survey.

THE STUDY OF MULI-LEVEL PERFORMANCE MEASUREMENT APPROACH FOR VALUE MANAGEMENT OF CIVIL INFRASTRUCTURE PROJECTS

  • Jong-Kwon Lim;Min-Jae Lee;Dong-Youl Lee
    • International conference on construction engineering and project management
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    • 2009.05a
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    • pp.1294-1299
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    • 2009
  • Best value in value engineering has relation to cost and performance. But a severe problem in VE study of a project is to reduce value due to loss of performance, caused by focusing on cost reduction. Also a lack of understanding performance concept, no trial VE workshop as well as cost saving-based policy have not satisfied customer needs. A efficient and practical methodology for accomplishing best value in construction projects is proposed. This study developed a more objective approach for performance measurement approach of mega projects and suggested a systematic process of performance quantitative analysis verifying value improvement. The proposed performance measurement method would be very useful for better communication and consensus between stakeholders and VE team especially through value engineering.

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Prediction Model of Final Project Cost using Multivariate Probabilistic Analysis (MPA) and Bayes' Theorem

  • Yoo, Wi Sung;Hadipriono, FAbian C.
    • Korean Journal of Construction Engineering and Management
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    • v.8 no.5
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    • pp.191-200
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    • 2007
  • This paper introduces a tool for predicting potential cost overrun during project execution and for quantifying the uncertainty on the expected project cost, which is occasionally changed by the unknown effects resulted from project's complications and unforeseen environments. The model proposed in this stuff is useful in diagnosing cost performance as a project progresses and in monitoring the changes of the uncertainty as indicators for a warning signal. This model is intended for the use by project managers who forecast the change of the uncertainty and its magnitude. The paper presents a mathematical approach for modifying the costs of incomplete work packages and project cost, and quantifying reduced uncertainties at a consistent confidence level as actual cost information of an ongoing project is obtained. Furthermore, this approach addresses the effects of actual informed data of completed work packages on the re-estimates of incomplete work packages and describes the impacts on the variation of the uncertainty for the expected project cost incorporating Multivariate Probabilistic Analysis (MPA) and Bayes' Theorem. For the illustration purpose, the Introduced model has employed an example construction project. The results are analyzed to demonstrate the use of the model and illustrate its capabilities.