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tte4004%20Chapter%203%2C13 - Evaluating Transportation...

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Unformatted text preview: Evaluating Transportation Evaluating Alternatives Users of the system Users Non-users of the system Non Stakeholders Stakeholders Goals Goals Objectives Objectives Criteria Criteria – Capital costs – Maintenance costs – Facility operating costs Travel time costs Travel – Private or commercial vehicles – Length of trip, family income Vehicle operating costs Vehicle Accident costs Accident – Property-damage-only accident – Injury accident – Fatal accident Measures of effectiveness Measures 1. Economic comparison (equivalent dollars) 2. Numerical score (weighted average score) 3. Prepare a matrix Evaluation Based on Economic Evaluation Criteria Demand Curve for Travel on a Facility Demand Evaluation Based on Economic Criteria Continued Evaluation Consider cost of improvements compared to Consider existing conditions (alternatives vs. donothing) The benefit is reduction in cost The Need to define “Elements of Cost” Need Two types: “First cost” and “continuing cost” Two First Cost: Capitol cost…. Price of a bus, First construction of toll plaza…..etc Salvage value?? Salvage B2,1 = ½(P1 – P2)(V1 + V2) Simplified to: B2,1 = (P1 – P2)(V2) Evaluation Based on Economic Criteria Continued Evaluation Continuing Cost: Continuing 1. Vehicle operating costs 2. Travel time costs TTI study recommended $9.75/person/hour TTI and $22.53 per semi-trailer 3. Accident costs Insurance cost, hospital cost, property Insurance damage cost….. etc Economic Evaluation Methods Economic Present Worth Factor (PWF): Present Number of dollars one must initially invest at i% interest rate to have $1 after N years. Net Present Worth (NPW) is the Net present worth of a given cash flow that has both receipts and disbursements. Economic Evaluation Methods Continued Economic Rn S N Mn + On +Un NPW = ∑n=0 −n − C0 n+ n n ∑ =0 (1+i) (1+i) (1+i) N R: Revenue R: S: Salvage S: M: Maintenance M: O: Operating O: U: User U: C: Construction C: n: a specific year n: Economic Evaluation Methods Continued Economic Equivalent Uniform Annual Worth Equivalent (EUAW) is a conversion of a given cash flow to a series of equal annual amounts. EUAW= NPW [ i(1+i) (1+i) N N− 1 = NPW( A/ P − i − N) Economic Evaluation Methods Economic Rate of Return Method: Rate Determine the interest rate at which the PW of reductions in user and operation costs equals the PW of increases in facility costs Benefit Cost Ratio: Benefit (BCR)2/1 = B2/1 ----C2/1 where, Alt. 1 is the lower cost alternative; Alt. 2 is the higher cost alternative; B2/1 and C2/1 are the net benefits and net costs, expressed as PW or EUAW. Cost Effectiveness Analysis Cost Includes both: (1) costs (dollars), and (2) effectiveness (the degree to which an alternative achieves its objectives) Numerical Example Numerical Three designs have been proposed to improve traffic flow at a major intersection in a heavily traveled suburban area. The first alternative involves improved traffic signaling. The second alternative includes traffic signal improvements and intersection widening for exclusive left turns. The third alternative includes extensive reconstruction, including a grade separation structure. The construction costs, as well as annual maintenance and user costs, are listed in the following table for each alternative. Determine which alternative is preferred based on economic criteria if the analysis period is 20 years and the annual interest rate is 15 percent. Show that the result is the same using the present worth, equivalent annual cost, benefit-cost ratio, and rate of return methods Numerical Example Continued Numerical Alternatives Present Condition Capitol Cost Annual Maintenance Annual User Cost Salvage Value ---- 15,000 500,000 ---- Traffic Signals Intersection Widening Grade Separation 440,000 10,000 401,000 15,000 790,000 9,000 350,000 11,000 1,250,000 8,000 301,000 ---- (P/A, 15%, 20)= 6.259389 (P/A, Present Worth Method Cost Do Nothing Traffic Signal Intersection Widening Grade Separation Capital ---- 440,000 790,000 1,250,000 Maintenance 93,891 62,594 56,335 50,075 User 3,129,695 2,510,051 2,190,786 1,884,076 Salvage --- -917 -672 --- NPW 3,223,586 3,011,692 3,036,449 3,184,151 (A/P, 15%,20)= 0.15967 (A/P, Equivalent Uniform Annual Cost Cost Do Nothing Traffic Signal Intersection Widening Grade Separation Capital ---- 70,294 126,210 199,700 Maintenance 15,000 10,000 9,000 8,000 User 500,000 401,000 350,000 301,000 Salvage --- -146 -107 --- AC 515,000 481,148 485,103 508,700 Numerical Example Continued Numerical Benefit-Cost Ratio Benefit Signal VS. Do-Nothing: Signal – (515,000-411,000)/(70,148-0)=1.483>1 – Signal alternative better than do-nothing Intersection Widening vs. Signal: Intersection – (411,000-359,000)/(126,103-70,148)=0.929<1 – Signal is better than intersection widening Grade Separation vs. Signal Grade – (411,000-309,000)/(199,700-70,147)=0.787<1 – Signal is better than Grade Separation Traffic Signal is the most attractive alternative Traffic Numerical Example Continued Numerical Rate of Return Rate Signal vs. Do-Nothing Signal – [(15,000+50,000)-(100,000+40,100)]/[(440,000-916)(0)] = 0.2369 – (A/P,r,20) r = 23%>15% discard do-nothing Intersection Widening vs. Signal Intersection – [(10,000+401,000)-(9,000+350,000)]/[(790,000-672)(440,000-916)] = .1485 – r = 13.6%<15% signal is better is inter. Wdn. Grade Separation vs. Signal Grade – [(10,000+401,000)-(8,000+301,000)]/[1,250,000(440,000-916)] = 0.1258 r = 11%<15% – Signal is the best alternative ...
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