Module25 - Post Implementation Analysis Abandonment...

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Post Implementation Analysis Abandonment Analysis Part I
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Key Concepts Last Module: Tracked a project and projected it path for dynamic decision making. This Module: Consider the abandonment option While we forecasted the length of our project for analysis, we can make this parameter a decision.
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Abandonment Analysis As a project progresses, we have to eventually make a decision of when to abandon (or retire) a project. If project tracking shows that the project is not performing up to expectations, it may make sense to stop it early.
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Abandonment Analysis Use decision networks (deterministic) and decision trees (uncertain) to evaluate whether to: Abandon or continue the project after each period. Evaluate through the expected horizon.
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Example Valero Energy Corp. announced that it would shutter its Delaware City refinery which processed 210,000 barrels of heavy, sour crude oil per day. It considered converting the facility to process light, sweet crude for $250 million, but declined. The facility had Malik, N. “Delaware Govt Sees $882M Economic Impact From Valero Plant Closure,” Dow Jones Energy Service , November 20, 2010.
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Example Continued Assume the following forecasted parameters:
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Module25 - Post Implementation Analysis Abandonment...

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