Ch2 Incidents for Discussion

Ch2 Incidents for Discussion - her nothing about the risk...

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Blake Morrison Matt Koziol Mike Mayfarth Ch 2. Incident for Discussion If I was the vice president of L & M power and I had the task of deciding between an underground deep storage facility and a liquified natural gas facility I would use a model that was both numeric and nonnumeric. I do not think that solely a financial method is the right because this project is going to be very complex and the success of the project deals with much more than finances. This project model for this project needs to be not only numeric but also nonnumeric. Nonnumeric because this project will have environmental, safety issues, and legal matters that will need to be addressed. If the vice president did use the financial model she would be making a poor management decision since the financial method tells
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Unformatted text preview: her nothing about the risk of the project being finished on time or budget. Nor does it address any problems that might later arise that were unexpected. The financial method also fails to address any of the company’s present and long-term goals. The best way to choose a model is a method developed by Souder. This method uses five criteria to help aid in project selection method. The five criteria are realism, capability, flexibility, ease of use, and cost. Each is very important and is equally important. This is why a financial method in the L & M power project model selection is a poor model, the financial method only accounts for cost analysis. The only way to account for the five criteria that is outlined by Souder is for the L&M Power to use a nonnumeric method....
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This homework help was uploaded on 04/07/2008 for the course EM 464 taught by Professor Ladd during the Spring '08 term at Washington State University .

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