Independent Cost Estimates Research Articles

Novel results for the anisotropic sparse grid quadrature

This article is dedicated to the anisotropic sparse grid quadrature for functions which are analytically extendable into an anisotropic tensor product domain. Taking into account this anisotropy, we end up with a dimension independent error versus cost estimate of the proposed quadrature. In addition, we provide a novel and improved estimate for the cardinality of the underlying anisotropic index set. To validate the theoretical findings, we present several examples ranging from simple quadrature problems to diffusion problems on random domains. These examples demonstrate the remarkable convergence behavior of the anisotropic sparse grid quadrature in applications.

Review and proposed extension of the APPEA Method for estimating levels of financial assurance

In 2014, the Australian Petroleum Production and Exploration Association (APPEA) published the ‘Method to assist titleholders in estimating appropriate levels of financial assurance for pollution incidents arising from petroleum activities’, referred to as the APPEA Method. The APPEA Method provides a standard approach to quantifying the appropriate level of financial assurance required under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act). The National Offshore Petroleum Safety and Environment Management Authority (NOPSEMA) endorsed the APPEA Method for an initial period of 2 years (until December 2016) with the requirement that APPEA review the method against a broader range of case studies to confirm its validity. In 2017, APPEA applied the APPEA Method to 18 case studies, comparing independently calculated cost estimates with the APPEA Method cost band for each case study. For 17 of the 18 case studies, the independent cost estimate was less than the APPEA Method cost band, confirming the validity of the APPEA Method for those case studies. For one of the case studies involving marine fuel oil, the APPEA Method cost band potentially underestimated the response and clean-up costs. The robustness of the APPEA Method can be improved by amending the hydrocarbon type impact score for fuel oils. Based on the review, NOPSEMA has since endorsed the APPEA Method until September 2018. The APPEA Method is currently endorsed for incidents in which the total volume of hydrocarbon released is <1 000 000 m3 and the total volume of oil ashore is <25 000 m3. Based on an assessment of the response and clean-up costs from three additional case studies that exceeded these limits, amendments to the APPEA Method are proposed that would extend the range of incidents to which it could be applied.

Renewable and distributed resources in a post-Paris low carbon future: The key role and political economy of sustainable electricity

Three recent “roadmap” analyses outline routes to a low-carbon economy that model the decarbonization of the electricity sector and the pervasive electrification of the transportation and industrial sectors. Using independent cost estimates and sequentially “relaxing” the constraints on resource selection, this paper compares the resource costs of the resulting portfolios of assets needed to meet the need for electricity. It supports the claim that the long run costs of the 100% renewable portfolios are less than business-as-usual portfolios, and finds that the “environmental merit order” of asset selection is quite close to the “economic merit order.” Neither fossil fuels with carbon capture and storage nor nuclear power enters the least-cost, low-carbon portfolio. Rigorous least-cost constraints on decarbonization render the pollution constraint is superfluous. The paper evaluates the Paris Agreement on climate change in light of these findings. The Agreement is described as a progressive, mixed market economic model with a governance structure based on a polycentric, multi-stakeholder approach for management of a common pool resource. It also notes that the political economy of the Agreement is consistent with current academic analysis of policy responses to the challenges of climate change and management of a large, focal core resource system.

The Economic and Institutional Foundations of the Paris Agreement on Climate Change: The Political Economy of Roadmaps to a Sustainable Electricity Future

Three recent “roadmap” analyses outline routes to a low-carbon economy that model the decarbonization of the electricity sector and the pervasive electrification of the transportation and industrial sectors. Two of these also impose a pollution constraint on electricity resources that rejects the use of nuclear power and fossil fuels with carbon capture and storage. Using independent cost estimates and sequentially “relaxing” the constraints on resource selection, this paper compares the resource costs of the resulting portfolios of assets needed to meet the need for electricity. Reflecting the continuing decline of the cost of renewable resources, the paper supports the claim that the long run costs of the 100% renewable portfolios are not only less than business-as-usual portfolios, but that the “environmental merit order” of asset selection is quite close to the “economic merit order.” Neither fossil fuels with carbon capture and storage nor nuclear power enters the least-cost, low-carbon portfolio. As long as a rigorous least-cost constraint is imposed on decarbonization, the pollution constraint is superfluous. The paper evaluates the Paris Agreement on climate change in light of these findings. The Agreement is described as a progressive, mixed market economic model with a governance structure based on a polycentric, multi-stakeholder approach for management of a common pool resource. The paper argues that this approach reflects the underlying techno-economic conditions and the fact that national governments have authority over local energy policy. It also notes that the political economy of the Agreement is consistent with current academic analysis of policy responses to the challenges of climate change and management of a large, focal core resource system.

Implications of workforce and financing changes for primary care practice utilization, revenue, and cost: a generalizable mathematical model for practice management.

Primary care practice transformations require tools for policymakers and practice managers to understand the financial implications of workforce and reimbursement changes. To create a simulation model to understand how practice utilization, revenues, and expenses may change in the context of workforce and financing changes. We created a simulation model estimating clinic-level utilization, revenues, and expenses using user-specified or public input data detailing practice staffing levels, salaries and overhead expenditures, patient characteristics, clinic workload, and reimbursements. We assessed whether the model could accurately estimate clinic utilization, revenues, and expenses across the nation using labor compensation, medical expenditure, and reimbursements databases, as well as cost and revenue data from independent practices of varying size. We demonstrated the model's utility in a simulation of how utilization, revenue, and expenses would change after hiring a nurse practitioner (NP) compared with hiring a part-time physician. Modeled practice utilization and revenue closely matched independent national utilization and reimbursement data, disaggregated by patient age, sex, race/ethnicity, insurance status, and ICD diagnostic group; the model was able to estimate independent revenue and cost estimates, with highest accuracy among larger practices. A demonstration analysis revealed that hiring an NP to work independently with a subset of patients diagnosed with diabetes or hypertension could increase net revenues, if NP visits involve limited MD consultation or if NP reimbursement rates increase. A model of utilization, revenue, and expenses in primary care practices may help policymakers and managers understand the implications of workforce and financing changes.

The Cost of Recovering Uranium from Seawater by a Braided Polymer Adsorbent System

This article provides an independent cost estimate for uranium production from seawater through the braid-type adsorbent recovery system proposed by the Japan Atomic Energy Agency (JAEA). Production costs were developed with standard engineering cost estimation techniques using vendor data and plant design and operational data. The analysis includes life cycle discounted cash flows, economies of scale, and propagation of uncertainties. A reference case based on the Japan Atomic Energy Agency assessment, with a fresh adsorbent capacity of 2 kgU/t ads and 6 recycles, yielded a production cost of $1230/kg uranium with a 95 percent confidence interval of [$1030/kg U, $1430/kg U] when component cost uncertainties alone were considered. Sensitivity studies confirmed that adsorbent capacity, number of recycles, and capacity degradation are major cost drivers. If capacity and number of recycles increases to 6 kg U/t ads and 20, respectively, with no degradation and unchanged adsorbent production costs, the uranium production cost drops to $299/kg U. Supplemental materials are available for this article. Go to the publisher's online edition of Science & Global Security to view the free online appendix with additional tables and figures.

A North Atlantic Treaty Organisation framework for life cycle costing

There is a long and documented history of both cost growth and estimating optimism within military system acquisition programmes. This is particularly the case for multinational programmes. As the nature of future acquisition programmes will be more multinational oriented, a common approach is required to generate realistic and consistent LCC estimates for a future system. This article presents the findings to date of the NATO Research and Technology Organisation (RTO) to develop a framework for life cycle costing. This framework consists of a generic cost breakdown structure (CBS), methods and models to be used and a guideline for conducting a Life Cycle Cost (LCC) analysis in all stages of the system's life cycle. All this is summarised in a Code of Practice. The article concludes presenting the next step in the NATO cost improvement process, i.e. to exercise the guideline, for example, programmes. An independent cost estimate (ICE) is conducted on three systems to demonstrate proof of concept. The results of these ICEs will be further used to improve the guideline and the Code of Practice.

US planetary sciences to focus on smaller missions, research, and technology development

Heeding community advice, NASA’s planetary science division seeks to scale back its flagship missions while retaining strong international partnerships.

Economic evaluation of strategies for managing women with equivocal cytological results in Brazil

In Brazil, current management of women with screening results of atypical squamous cells of undetermined significance (ASC-US) is to offer repeat testing at 6-month intervals. Alternative management strategies that have been adopted in many high-income settings are to offer immediate colposcopy referral or to utilise human papillomavirus (HPV) DNA testing as a triage for colposcopy referral, and to consider different strategies according to women's age. The objective of our study was to evaluate the lifetime cost effectiveness in terms of cost per years of life saved (YLS) of these alternative strategies for a middle income setting. A Markov model was developed using data from the Ludwig-McGill cohort and calibrated to independent observational datasets and local cost estimates obtained. In the base-case analysis, repeat cytology was the least costly strategy but also the least effective. Based on the WHO threshold for very cost-effective interventions, HPV triage for women above 30 years-old was the strategy with the highest probability of being cost effective. HPV triage including younger women with ASCUS results would also be a cost-effective option. Whilst there was a slight further gain in effectiveness with immediate colposcopy referral, it was also more expensive and did not appear to be cost effective. Threshold analysis indicated that an HPV test would have to be more than twice as expensive as a cytology test for HPV triage to no longer be cost effective. In conclusion, our results indicate that in middle income settings HPV triage is likely to be the optimal strategy for managing women presenting with ASC-US results.

Redesign of the 2005 Pollution Abatement Costs and Expenditure Survey

This paper presents the results of a comprehensive redevelopment and evaluation effort led by the U.S. Environmental Protection Agency (EPA) to assess the accuracy of the responses to the Pollution Abatement Costs and Expenditures (PACE) survey. The data collected by the PACE survey is important because it is the only comprehensive source of pollution abatement costs and expenditures related to environmental protection in the U.S. manufacturing sector. The PACE Survey has been administered over twenty times since 1973, yet until now, the accuracy of the survey responses has never been formally evaluated. The methods used to evaluate the survey include one-on-one interviews and site visits with manufacturing facilities to develop independent cost estimates which were compared to reported survey responses. Overall this study finds, assuming a reasonable margin of error, that the PACE survey responses reflect actual pollution abatement capital expenditures and operating costs. In addition, these interactions with facilities had a major impact on the design of the 2005 PACE survey and are also discussed in this paper.

Directional asymmetry of long‐distance dispersal and colonization could mislead reconstructions of biogeography

AbstractAim Phylogenies are increasingly being used to attempt to answer biogeographical questions. However, a reliance on tree topology alone has emerged without consideration of earth processes or the biology of the organisms in question. Most ancestral‐state optimization methods have inherent problems, including failure to take account of asymmetry, such as unequal probabilities of losses and gains, and the lack of use of independent cost estimates. Here we discuss what we perceive as shortcomings in most current tree‐based biogeography interpretation methods and show that consideration of processes and their likelihoods can turn the conventional biogeographical interpretation on its head.Location Southern hemisphere focus but applicable world‐wide.Methods The logic of existing methods is reviewed with respect to their adequacy in modelling processes such as geographical mode of speciation and likelihood of dispersal, including directional bias. Published reconstructions of dispersal of three plant taxa between Australia and New Zealand were re‐analysed using standard parsimony and maximum likelihood (ML) methods with rate matrices to model expected asymmetry of dispersal.Results Few studies to date incorporate asymmetric dispersal rate matrices or question the simplistic assumption of equal costs. Even when they do, cost matrices typically are not derived independently of tree topology. Asymmetrical dispersal between Australia and New Zealand could be reconstructed using parsimony but not with ML.Main conclusions The inadequacy of current models has important consequences for our interpretation of southern hemisphere biogeography, particularly in relation to dispersal. For example, if repeated directional dispersals and colonization in the direction of prevailing winds have occurred, with intervening periods of speciation, then there is no need to infer dispersals against those winds. Failure to take account of directionality and other biases in reconstruction methods has implications beyond the simple misinterpretation of the biogeography of a taxonomic group, such as calibration of molecular clocks, the dating of vicariance events, and the prioritization of areas for conservation.

Central Limit Theorem Methodology for Bounding Point Estimates

Abstract Cost estimating frequently requires methodologies that logically and consistently allow the analyst to transform very limited data into estimates that are repeatable and will withstand scrutiny. This paper focuses on a technique that converts subjective information into quantitative bounding of uncertain estimates. The technique was instituted at the US Army Missile Command in the 1980s and was validated by headquarters analysts. In a recent Independent Cost Estimate performed for a NASA program, the authors used the technique in the proven manner and introduced a new application. By applying the technique at three levels, the authors were able to determine appropriate levels of risk reserves and use that as a base for evaluation of available risk reserves for the program under review.

Progress in the Title I Design of the National Ignition Facility

The National Ignition Facility (NIF) Project officially began in December of 1995. In October of 1996, advanced conceptual design studies, complete environmental impact study, facilitization of the manufacturing capabilities of optics vendors began. The Title I preliminary engineering design had not yet began until the end of December, but it is expected to be on schedule. It is expected that the conventional facilities design will be completed first. The Independent Cost Estimate (ICF) process will begin after the facilities design is complete. Other elements of the design will be submitted in one- or two-week intervals. This phase method of completing Title I was also used at the end of Complete Design Report and proved to be efficient. 9 refs., 11 figs.

Health USA. A national health program for the United States

The Health USA Act of 1991 addresses two fundamental health services financing problems: the more than 30 million uninsured persons and the rising costs for health care and for health insurance. Health USA would provide coverage of the entire resident population for comprehensive medical and preventive health and long-term care services through a universal tax-funded financing system. The federal government would contribute an average of 87% of program costs to each state, which would establish, under federal guidelines, a state health program. Each individual or family may enroll in any health plan approved by the state program, including many private plans, or a plan run by the state program. Through the approved plan of their choice, enrollees would receive covered services and obtain their care from participating physicians and other professional practitioners, hospitals, and other facilities. The state program would pay approved plans a capitation payment for every person enrolled. The plans would pay professional providers fees, as part of an all-payer system of fee schedules and expenditure targets, or capitation payments or salary. Hospitals would be financed through global budgets negotiated by the state program with each hospital. The plan run by the state program would pay the health care costs of any person who does not enroll in an approved plan, making the state plan the payer of last resort and eliminating uncompensated care and cost shifting by providers. Health USA would separate health care coverage from employment, ensuring uninterrupted coverage and eliminating employers' administrative role in providing coverage. Federal and state taxes would replace present methods of financing by private insurance premiums and large out-of-pocket expenditures. Building on the present system of health plans, Health USA would offer all persons a wide choice of competing plans in which to enroll and offer professional providers a wide choice of plans in which to practice. It would control costs by increasing financial accountability of providers and health plans, reducing present reliance on intrusive utilization review and on patient cost sharing. By controlling health care and administrative costs, Health USA would cover the entire population and, according to independent cost estimates, reduce national health expenditures by $11.5 billion in 1991.

Liquid-Phase Methanol Process Promises Cost Saving

A group at Brookhaven National Laboratory (BNL) is developing a liquid-phase process for synthesis of methanol from natural gas. Independent cost estimates for a plant using the new process are considerably lower than those for a corresponding plant based on present technology. The group at Brookhaven believes it has overcome most of the objections to steam reforming and the high capital investment in partial oxidation processes. The key factor is a new methanol synthesis catalyst. The researchers declined to identify the catalyst other than to say that it is a liquid solution that provides synthesis gas conversion of more than 90%, is active at low temperatures (around the normal boiling point of water), and permits removal of heat to be decoupled from the process kinetics. The new BNL catalyst, which is being developed with funding from the Department of Energy, makes it possible to take advantage of the unique natural gas requirements for partial oxidation because the high conversion rates eliminate the need for recycle. That permits the use of air and eliminates concerns about inert gas buildup. Atmospheric nitrogen, in the oxidation air, leaves the process at elevated pressure and can be expanded to extract compressor power. What thatmore » suggests to the BNL group is the possibility of being able to use methanol, rather than LNG, to transport natural gas energy to the marketplace.« less

A comparison of independent product cost estimates; the cost of methanol from coal

The need for, or development of, new processing technology spawns independent cost studies by utilities, governmental agencies, and industry. Each group uses its own process and economic basis for estimating the product cost. This results in widely varying cost estimates for the same product using similar technology. These product costs tend to be taken at face value. Those studies predicting high cost are used by opponents of the process, while low cost studies are used to substantiate the efficacy of the technology. Virtually no reconciliation of these cost differences is attempted. It was the purpose of this study to develop and demonstrate a method for cost comparison which identifies areas of real cost differences. The interest in energy conversion processes has produced numerous cost estimates for a wide range of processes yielding combustible liquids and gases. As an example three recent studies of the cost of methanol produced from coal predicted costs ranging from 18.8 c/ gallon to 71.0 c/gallon. Based on the relatively well established status of this fuel conversion technology, this difference in cost should be largely explainable. Examination of the three studies identified that the major sources of cost difference were coal quality, plant efficienvy, economics of scale, operating and capital basis, the economic model, and choice of economic parameters. Almost complete reconciliation of the 52.2 c/gallon cost difference was achieved when a common basis of evaluation was used.

The economics of resource recovery from solid waste

The decision to implement a resource recovery system as a method of solid waste disposal must be based on a sound economic evaluation of alternatives. Such evaluation is currently hindered by a lack of comparability between independent cost estimates. This is due both to the use of diverse estimation procedures and to the different assumptions made about the resource recovery systems. From a critical assessment of current practices and potential pitfalls in cost and revenue estimation, conventions are proposed to serve as a guide for future work.

Derivation of a Linear Decision Rule for Production and Employment

An application of linear decision rules to production and employment scheduling was described in the last issue of this journal [Holt, C. C., F. Modigliani, H. A. Simon. 1955. A linear decision rule for production and employment scheduling. Management Sci. (October).]. The hypothetical performance of these rules represented a significant improvement over the actual company performance as measured by independent cost estimates and other managerial measures of efficiency. The quadratic cost function which was used should be applicable to production and employment scheduling decisions in many other situations. Also the general approach of approximating decision criteria with quadratic functions and obtaining linear decision rules can usefully be extended to many decision problems. In the present paper we will demonstrate (a) how optimal (i.e., minimum expected cost) decision rules may be derived for a quadratic cost function involving inventory, overtime, and employment costs, and (b) how the numerical coefficients of the rules may be computed for any set of cost parameters.