Analysis of different impact rates on the forecasts cost of building project using sensitivity analysis techniques

Over the years, Life Cycle Costing (LCC) has been recognized and used as an important technique for evaluating, forecasting and discounting the future costs of building to the present day value, from conception, design to completion, operation, maintenance, down to decommissioning. This work presents a study of Analysis on different discount rate of the forecasts cost of building project using sensitivity analysis techniques, the case study being Calabar International Conference Center (CICC) building project. Life cycle cost analysis was conducted and forecast for 51 years using Net present value (NPV) with the following discount rates 4%, 5%, 6%, 8%, 10%, 12% and 13% respectively. Results showed that the lower the discount rates, the higher the cost value and via vasa. The building had a positive value >0 indicating a significant benefit at the end of the study period. The percentage contribution of the discount rate on the initial cost, salvage value and the life cycle cost indicates that at 4% the initial cost accounted for 85% of the discounted cost, life cycle cost 13% and salvage value 2%. The salvage value recorded 0% at 12% and 13% discount rate The higher the discount rates the higher the discounted initial cost and the lower the life cycle cost.

Cost-utility of triple versus dual inhaler therapy in moderate to severe asthma

Background An important proportion of asthma patients remain uncontrolled despite using inhaled corticosteroids and long-acting beta-agonists. Clinical guidelines recommend, in these patients, using add-on long-acting muscarinic antagonists (triple therapy) to treatment with high doses of inhaled corticosteroids-long-acting beta2-agonist (dual therapy). The purpose of this study was to assess the cost-effectiveness of triple therapy versus dual therapy for patients with severe asthma. Methods A probabilistic Markov model was created to estimate the cost and quality-adjusted life-years (QALYs) of patients with severe asthma in Colombia. Total costs and QALYS of dual and triple therapy were calculated over a lifetime horizon. Multiple sensitivity analyses were conducted. Cost-effectiveness was evaluated at a willingness-to-pay value of $19,000. Results The model suggests a potential gain of 1.55 QALYs per patient per year on triple therapy with respect to dual therapy. We observed a difference of US$304 in discounted cost per person-year on triple therapy with respect to dual therapy. The incremental cost-effectiveness ratio was US$196 in the probabilistic model. In the sensitivity analysis, our base‐case results were robust to variations in all assumptions and parameters. Conclusion In conclusion, triple therapy in patients with moderate-severe asthma was cost-effective. Using triple therapy emerges with our results as an alternative before using oral corticosteroids or biologics, especially in resource-limited settings.

Economic Evaluation of Cement Grouted Bituminous Mixes for Airport Pavements

The Cement Grouted Bituminous Mix (CGBM) is an innovative material that could be used to build airport pavements subjected to heavy concentrated loads or fuel and solvent leaks. CGBM is composed of a porous asphalt clogged with an expansive cement mixture, which fills the asphalt voids. This paper focuses on two airport pavements (i.e., a taxiway and a helipad one) to be paved in an Italian airport. For each surface, the construction and maintenance costs of a CGBM pavement and a traditional flexible pavement have been compared. The pavements should bear different traffic loads, while the weather, subgrade, and materials are the same: the fatigue and rutting verification gives structures whose cost analysis leads to different results. The CGBM solution for the taxiway has a cost comparable to that of the equivalent traditional flexible pavement (i.e., 73.87 €/m2 vs. 73.20 €/m2 during the service life). On the other hand, the overall discounted cost of the helipad surface paved with CGBM is higher than that obtained for the traditional pavement (i.e., 82.4 €/m2 vs. 67.5 €/m2). Therefore, the study demonstrates that the economic opportunity of CGBM solutions strongly depends on traffic loads.

Infinite horizon backward stochastic Volterra integral equations and discounted control problems

Infinite horizon backward stochastic Volterra integral equations (BSVIEs for short) are investigated. We prove the existence and uniqueness of the adapted M-solution in a weighted L2space. Furthermore, we extend some important known results for finite horizon BSVIEs to the infinite horizon setting. We provide a variation of constant formula for a class of infinite horizon linear BSVIEs and prove a duality principle between a linear (forward) stochastic Volterra integral equation (SVIE for short) and an infinite horizon linear BSVIE in a weighted L2-space. As an application, we investigate infinite horizon stochastic control problems for SVIEs with discounted cost functional. We establish both necessary and sufficient conditions for optimality by means of Pontryagin’s maximum principle, where the adjoint equation is described as an infinite horizon BSVIE. These results are applied to discounted control problems for fractional stochastic differential equations and stochastic integro-differential equations.

Determination of the optimal transition point between a truck and shovel system and a semi-mobile in-pit crushing and conveying system

One of the most challenging aspects in semi-mobile in-pit crushing and conveying (SMIPCC) system design is determining the optimum depth at which to change from a purely truck-based haulage system to a conveyor-based haulage system. We used scenario analysis to determine the optimum transition depth between a truck and shovel (TS) system and a SMIPCC system. Traditional pit-limit algorithms were used to generate the final pit limit on a copper deposit, which was then divided into four pushbacks. The final operating pushbacks (phases) were designed for both TS and SMIPCC. The end depths for each phase are viewed as candidate transition points to switch from the TS to SMIPCC haulage system. Economic calculations were applied for five different scenarios, including adopting SMIPCC from the outset (pure SMIPCC), after the first, second, and third phases, and finally not using the SMIPCC system (pure TS) at all. The analysis indicates that the second scenario, at a depth of 335 m, results in the lowest cumulative discounted cost (CDC). In this case, the CDC is 17.6% lower than that for the pure TS scenario and 10.7% lower than for the pure SMIPCC system scenario.

Minimizing spectral risk measures applied to Markov decision processes

We study the minimization of a spectral risk measure of the total discounted cost generated by a Markov Decision Process (MDP) over a finite or infinite planning horizon. The MDP is assumed to have Borel state and action spaces and the cost function may be unbounded above. The optimization problem is split into two minimization problems using an infimum representation for spectral risk measures. We show that the inner minimization problem can be solved as an ordinary MDP on an extended state space and give sufficient conditions under which an optimal policy exists. Regarding the infinite dimensional outer minimization problem, we prove the existence of a solution and derive an algorithm for its numerical approximation. Our results include the findings in Bäuerle and Ott (Math Methods Oper Res 74(3):361–379, 2011) in the special case that the risk measure is Expected Shortfall. As an application, we present a dynamic extension of the classical static optimal reinsurance problem, where an insurance company minimizes its cost of capital.

Optimal adaptive inspection and maintenance for redundant systems

Optimal exploration of engineering systems can be guided by the principle of Value of Information (VoI), which accounts for the topological important of components, their reliability and the management costs. For series systems, in most cases higher inspection priority should be given to unreliable components. For redundant systems such as parallel systems, analysis of one-shot decision problems shows that higher inspection priority should be given to more reliable components. This paper investigates the optimal exploration of redundant systems in long-term decision making with sequential inspection and repairing. When the expected, cumulated, discounted cost is considered, it may become more efficient to give higher inspection priority to less reliable components, in order to preserve system redundancy. To investigate this problem, we develop a Partially Observable Markov Decision Process (POMDP) framework for sequential inspection and maintenance of redundant systems, where the VoI analysis is embedded in the optimal selection of exploratory actions. We investigate the use of alternative approximate POMDP solvers for parallel and more general systems, compare their computation complexities and performance, and show how the inspection priorities depend on the economic discount factor, the degradation rate, the inspection precision, and the repair cost.

Discounted-cost Linear Quadratic Regulation of Switched Linear Systems

In this paper, we will investigate the design of discounted-cost linear quadratic regulator for switched linear systems. The distinguishing feature of the proposed method is that the designed discounted-cost linear quadratic regulator will achieve not only the desired optimization index, but also the exponentially convergent of the state trajectory of the closed-loop switched linear systems. First, we adopt the embedding transformation to transform the studied problem into a quadratic-programming problem. Then, the bang-bang-type solution of the embedded optimal control problem on a finite time horizon is the optimal solution to the original problems. The bang-bang-type solutions of the embedded optimal control problem is to be shown the optimization solution of the studied problem. Then, the computable sufficient conditions on discounted-cost linear quadratic regulator are proposed for finite-time and infinite-time horizon case, respectively. Finally, an example is provided to demonstrate the effectiveness of the proposed method.