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Economic Evaluation of Materials Technologies

Production cost is a vital performance metric for engineering and management analysis. Despite its obvious relevance throughout the product development cycle, cost analysis has not been a focus of the design engineer. In part, this is because of some key misunderstandings of what cost is—engineers have not been trained in the techniques that tie manufacturing cost to the technical and design parameters with which they are more comfortable and familiar.

While there have been many calls for a closer relationship between engineering and economic analysis, these key conceptual obstacles, in conjunction with the limits of the computational tools available, have limited the integration of cost analysis into product and process development.

This paper, reprinted here by permission of the Journal of Manufacturing, summarizes the conceptual limitations that need to be overcome and presents a basis for revising the notion of process cost analysis. Moreover, it presents a series of cost analysis cases that demonstrate the way in which the notion of “context” lies at the heart of effective use of engineering cost estimates. 

Independent Engineering / Engineering Economics

Energy is a broad field for lenders, encompassing oil and gas projects, midstream pipelines and terminals, fertilizer and biofuels plants, downstream polymer and petrochemical facilities, and thermal power generating stations with private sector and state-owned company sponsors. Exponent provides expert engineering and other services on behalf of lenders during loan origination and, upon financial close, during the construction and operations phases of energy projects.

Exponent is highly qualified to assist during the origination phase of energy project financings, providing technical due diligence and market analysis services on behalf of lenders. Such services have included review of major equipment procurement contracts, supplier capabilities, the technical capacity of sponsors and their contractor(s) to effectively manage and perform, design plans, conformance of project specifications with local and international norms and standards, necessary permits and approvals from local authorities, EPC contracting strategy and structure, quality assurance/quality control (QA/QC) plans, and project economic assumptions. We can validate the suitability of the sponsor’s projections for project construction costs and assess the probability of cost overruns (estimate contingencies). We evaluate the sponsor’s timetable for construction given the scope of an energy project and external factors such as resource limitations. Affected markets in need of analysis might include fuel supplies for a power project, or raw material and product markets for a project in the downstream segment. We are often called upon to provide risk assessments, audit borrower’s financial models or estimate project cash flows for analysis of key financial ratios. Exponent makes recommendations to complete or improve the project’s investment and operations plans, if appropriate.

To assist financial institutions in administrating projects in their portfolios, Exponent has experienced and knowledgeable personnel for construction and operations phase monitoring of energy or oil and gas projects. We work together with lenders to assure that the liquidated damages, cost controls, contingencies, and insurance policies proposed by the sponsors for both construction and operation are sufficient. Once loan agreements are executed, Exponent provides oversight services during the project construction phase including cost monitoring and reporting as well as monitoring for contract compliance; engineering design, procurement and construction progress; environmental damage mitigation efforts; and schedule impacts related to major equipment fabrication and delivery as well as cost monitoring and reporting. In addition, we inspect for the development of required infrastructure for a project and provide certifications to the lenders with regards to financing at closing, disbursements, technical completion, and final completion, as necessary.

During operations, we review the annual budgets for projects, including operating and maintenance expenses and sustaining capital expenditures, and assess (when applicable) project expansion plans. Exponent can evaluate the operating management plan and technical aspects of all contractual material related to performance guarantees and operations, and compliance with applicable provisions and requirements. We have been asked to assess trends in raw material and products markets, including furnishing updated estimates of supply and demand in markets affecting project profitability and margins, and to provide review and comment on the borrower’s forecasts and projections. As part of the review of operating and maintenance cost projections, we provide annual (or more frequent) monitoring reports during the operations phase.

Exponent’s energy consultants, business analysts, and discipline engineers provide support to lenders throughout the design and construction process. Our capabilities extend to analyzing or supporting claims during project construction. Moreover, we can address complex engineering problems on energy projects either in construction or operations.

This technical, market analysis and project economics support is not just for lenders – we also provide support to project companies, and as needed/requested, the attorneys whom support the transactions.

Exponent has helped energy and alternative fuels project developers with site selection studies, marketing plans and strategies, feasibility studies, process technology assessments, preliminary capital and conversion cost estimates, analysis of supply chain logistics, and development of project economics/financing models and project memoranda.

Energy Economics

Technology comparisons frequently come down to a need to make decisions involving engineering economics. Companies developing energy projects or considering investments in alternative or renewable energy technologies need reliable and considered views of competing technology options and their comparative economics. Exponent’s experienced staff provides clients with expert advice on energy-industry economics and the key drivers for oil, gas, and chemical projects.

Grounded in a thorough knowledge of the underlying engineering principles, our specialists are highly qualified to analyze technical and economic aspects at each step in the value chain, from wellhead or mine mouth to burner tip. We have experience in evaluating hydrocarbon processing and power project revenues and costs. Exponent analysts understand energy markets, and plant and pipeline operations, and this broad expertise allows us to assist clients in acquiring a fundamental grasp of conversion costs, transportation costs, and supply-chain logistics. We can assist in determining upstream, midstream, and downstream oil and gas project feasibility. If you have issues that involve exploration and development costs, reserves growth, overall plant production costs, returns on capital employed, debt service coverage ratios, assessment of risk, or the economics of capacity expansions, Exponent provides the technical and business consultants to support your analysis.

The Carbon Economy

One of my goals in my peak oil studies is to understand the whole system of planet+economy as best I can. I want to develop an informed opinion on what humanity's options are as it faces these interlocking crises-in-the-making. That's obviously an enormous task. The relevant disciplines include at least geology, petroleum engineering, economics, sociology, urban planning, international development, climatology, demography, political science, mining engineering, military strategy, archaeology, history, chemistry and chemical engineering, physics, statistics, biology, ecology, agricultural science, and electrical engineering. No-one can hope to master all these subjects to the point a specialist in them would know them.

And yet it seems to me that, while accepting this limitation, it's worthwhile for a few generalists such as myself to attempt to try to understand the situation as deeply as possible in all aspects; it may be that new ideas and insights can only come from deeply integrating a number of the important perspectives. Only time will tell.

In that spirit, I'm trying to understand the carbon cycle and in particular the current carbon flows in the economy. I have two goals - one is to better understand the debate over the viability of biofuels. The other is to better understand whether we have any real options over climate change other than just suffering the consequences of our collective fecklessness. Either way, I can never make any sense out of any debate like this until I start to understand the relative sizes of the flows involved, and the trends in them.

Civil Engineering Services

Reece & Associates provides civil consulting and design services to the commercial and residential construction industry in areas such as:

•     Project Definition
•     Feasibility and economic analysis
•     System Planning
•     Civil engineering design
•     Project scheduling
•     Construction quality assurance
•     Storm water and wetland analysis
•     Grading and erosion control plans
•     Utility coordination
•     Extensive GIS capabilities

River Engineering / Restoration & Sustainable Design

Client, Architect & Other Organisations 

Powys County Council
The Welsh Assembly Government
 

Description
Approximately 50 properties, are at risk of flooding from the River Teme and Wylcwm Brook in Knighton. The mechanism for flooding from the Teme is primarily associated with high flows in the river. However, there are a number of features in Knighton which could be exacerbating the effects of flooding. These include a reduction of the flood plain width at the Mill, encroachment on flood storage areas and the limiting cross section of the Teme Bridges.

Flooding in the town is also affected by the Wylcwm Brook which is a small ordinary watercourse which joins the Teme upstream of the Teme Bridge.  During heavy rainfall the Brook overtops a bridge at Bowling Green Lane flooding three properties adjacent to the bridge. Overland flow also exacerbates flooding to commercial properties at Teme Bridge

Scope of Work

In 2002 Edenvale Young Associates completed a pre-feasibility study which recommended that a full project appraisal study should be undertaken to evaluate options to mitigate flooding in the town. Powys County Council asked Edenvale Young (then JYA Ltd) to prepare a full project appraisal. In summer 2004 a baseline ecological survey was completed and a topographic survey was commissioned to provide data for the hydraulic modelling.  Following the completion of the field work, a hydrological analysis using FEH was undertaken to evaluate extreme flood flows.

In October 2004 ISIS model of the Teme and Wylcwm Brook was also developed and calibrated against the 2000 event using EA gauge data from Teme Bridge and information obtained from interviews with residents. This model has been used to evaluate a number of engineering options and to develop the economic assessment for the Project Appraisal Report.

P-BEAT: A Process-Based Economic Analysis Tool

NASA Glenn Research Center is developing P-BEAT (Process-Based Economic Analysis Tool): an engineering-focused economic analysis code to be used in performing engineering trade studies and technology investment decision analyses for all phases of a product life cycle. Version 1.0 of the code, currently available upon request, combines Decision Analysis and Economic Analysis capabilities in a Microsoft Excel spreadsheet-based format. Included with the deterministic economic analysis tool is an Excel add-in simulation module (CpSimulation) that can be used to perform uncertainty and statistics analyses.

The initial release version of P-BEAT estimates development and production costs using an innovative process rollup-based methodology to calculate product complexity and its impact on cost. It offers multi-user capabilities, network-based configuration control, and data security features. It provides Decision-Support tools that can be used to generate utility curves that quantify stakeholder "desirability" and a pair-wise method to determine system attribute priorities. P-BEAT includes an extensive database of over 14,000 materials and hundreds of manufacturing processes plus context-sensitive help and graphical tools for sensitivity analyses and identification of cost drivers, as well as the CpSimulation add-in module for uncertainty and cost-risk analyses.

The P-BEAT architecture is template-based and provides four usage modes (straight cost roll-up mode and dual-pane analogy mode, each using either the innovative process-based methodology or a traditional high-level parametric methodology), presented in a multi-paned graphical user interface with default values and bounds-checking for all user input parameters, along with context sensitive help and parameter-specific charts and tables. Depending on available data, the fidelity of the analyses can range from first-order, system-level trade studies to detailed, investment-grade, component-level product cost breakdowns. This allows the tool to be used to manage product cost throughout its full life-cycle from conception to production to retirement.

Compared to traditional cost estimation tools, which are not usually intended for use by engineers, P-BEAT provides the following benefits:

• Predicted costs based on known, actual cost of similar products: Estimates are credible to engineers.
• Self-documenting studies describe why costs vary in terms understandable to engineers and managers.
• Fast turn-around - an experienced practitioner can generate a first-order cost estimate in about 15 minutes when working with product development team members.
• Allows studies using high level parametric inputs and/or detailed design characteristics, such as design tolerance and material alternatives with a single tool. Can use the same tool throughout all life cycle phases.
• Decision module provides a hybrid Analytic Hierarchy Process/Utility Function method for evaluating multiple criteria in a consistent manner for any number of design trades.
• Cost-estimating relationships, inputs, and results are archived in a Microsoft Access database to ensure both access security and data integrity.
• Built-in automation mode allows batch-processing of thousands of related studies for regression analysis and cost-driver assessment.
• Context-sensitive help system provides on-the-fly user instruction as well as model and cost estimation documentation.

Masterbill Features at the NIQS Conference in Calabar, Nigeria

The Biennial Conference of the Nigerian Institute of Quantity Surveyors (NIQS) is an important national forum to advance the role of Quantity Surveying in National Development and Masterbill were pleased to be a part of this event.

Our Nigerian Agent reports....

This year’s conference was held in Calabar Cross River State of Nigeria and termed ‘TINAPA 2006’. It was so christened in order to showcase the first and largest business resort in Africa sited in Calabar and under construction.

 

 The project is in phases and the first phase which is to be commissioned in January 2007 consists of:

• A four unit shopping mall called ‘Emporia’ of 10, 000m2 each
• 52 Units line shops
• Entertainment centre consisting of Casinos, Restaurants, Cinemas and Games Arcade.
• A fisherman’s village consisting of Bars, Nightclubs, Arts and Crafts complex.
•     A 300 bed 3 star hotel complex
•     4 No warehouses
•     Leisure land comprising a lazy river, picnic area, wave pool among others
•     Lake dredging
•     Independent power supply

The Theme of the Conference ” QUANTITY SURVEYING IN THE 21ST CENTURY - AGENDA FOR THE FUTURE” focused on future role of Quantity Surveyors as project finance economists, project and contract interpretation and administration professional, including the nature of quantity surveying as a profession concerned with financial probity in the conceptualization planning and execution of development project and the specific areas of the Quantity Surveyors development and training on the current and future core-competence.

 

 These included:

• Value Engineering
• eMeasurement & Bid documentation
• Earned Value Management
•  Constructability Analysis
•  Budgeting and Budget Analysis for Government Fiscal Policies.
• Project Control Studies
• Cost Estimating & Control of engineering projects
• Economic Analysis of Project Procurement Methods
• Planning & Scheduling

Some of the papers presented at the conference included the following:

•     The Quantity Surveyors role in the 21st Century hospitality industry – The Tinapa Experience.
•     21st Century measurements in Bid documentation
•     Nigerian Institute of Quantity Surveyors as agent of economic development
•     FIG commission 10 - Impact of the Quantity Surveyor
•     The Quantity Surveyor and Road Map for the future
•     The 21st century Quantity Surveyor and University education
•     New opportunities for Quantity Surveyors in Nigerian business environment
•     The Quantity Surveyors in highway development
•     Project control mechanism of engineering projects in a developing economy
•     Due process initiative in contract award.
•     The roles of the professional Quantity Surveyor in Dispute Resolution
•     Overview of the Quantity Surveyors role in Engineering Infrastructure
•     Project management of Hospitality and Tourism development – Tinapa experience

The conference was an international conference as sub regional meetings of the following organisations were also held simultaneously during the conference.

• The International Cost Engineering Council (ICEC) Region 3 meeting was held on the 2nd day of the conference.
• The regional meeting of FIG - Commission 10 was also held on the 3rd day of the conference.
• The Regional meeting of the Association of African Quantity Surveyors was also held on the 3rd day of the conference.

In total the conference attracted over 500 participants from all over the continent.

Masterbill had a stand to display and demonstrate their software at the conference venue. This attracted a lot of participants which resulted in many enquiries.

 

 

Reliability Engineering

Reliability engineering is the discipline of ensuring that a system will be reliable when operated in a specified manner. Reliability theory is the foundation of reliability engineering. For engineering purposes, reliability is defined as the probability that a system will perform its intended function during a specified period of time under stated conditions. Reliability engineering is performed throughout the entire life cycle of a system, including development, testing, production, and operation.

The function of reliability engineering is to develop the reliability requirements for the system, design the system or product to meet the reliability requirements, establish an adequate reliability program, and perform appropriate analysis to monitor the actual reliability of the system or product during its life. Reliability improvement can be thought of as a process, and Exponent can provide assistance with any or all of the main elements of that process, which are:

•     Reliability strategies
•     System or product design
•         Failure modes and effects analysis
•         Reliability modeling and estimation
•         Reliability testing (accelerated life-cycle tests)
•     Quality assurance strategies
•     Work management and execution
•     Continuous improvement

With experience in analyzing thousands of failures, Exponent provides unique and advanced services in performing risk and reliability assessments. The primary focus of our scientists and engineers is assisting our clients in minimizing bottom-line losses in their business or operation. Accidents, unanticipated events, and system failures are the primary causes of deferred or lost production interruptions and may lead to loss of life, injury, property damage, and undesired releases. Exponent’s multi-disciplinary staff has performed diverse technical, business-interruption, and compliance-related risk and reliability assessments for chemical, petrochemical, petroleum, and manufacturing clients worldwide.

Reliability strategies involve a structured approach to identifying critical equipment and systems. This could include a failure mode and effects analysis to identify the critical component or system failure modes. A mean time to failure (or between failure for repairable systems) model can also be used to derive a probabilistic reliability model. Defining the appropriate maintenance regimen and replacement strategies based on that criticality determination is also part of a well-designed reliability program. When done properly, this element leads to optimal reliability. Our staff uses traditional and innovative situation-specific methods and tools to identify risk scenarios and their causes, consequences, and likelihood. This enables further quantification and prioritization of technical and business risks. Exponent lets the client’s need dictate the methodology. The methods include Preliminary Hazard or Risk Analysis (PHA/PRA), Layer of Protection Analysis (LoPA), Failure Modes and Effects Analysis (FMEA), Mechanical Integrity Assessments, Hazards and Operability Study (HAZOPs), Fault Tree Analysis (FTA), Human Error Analysis, and others. Exponent supplements these methods with risk quantification using probabilistic and uncertainty principles, and decision analysis. Our staff performs risk analysis ranging from compliance to total business-based approaches and addresses a number of issues critical to the operation a facility. These issues include: 

 

Economic Risks and Benefits

Engineering-economic studies of operational risks and costs are performed. Costs for alternative safety mitigation/quality control measures and the risk reduction or quality improvement potential for each alternative are evaluated to identify optimal measures.

At various levels (component, subsystem, system, plant), risk management analysis can assist in design, operation, feasibility studies, scheduling, budgeting, and revenue allocation. Properly integrated analysis can be modularized at any desired level, resulting in useful information to aid decision making.

Operational Reliability

Factors affecting production operations are analyzed to evaluate the risk of breakdown and production stoppage. Such factors include reliability, performance, and adequacy of structures, equipment, control systems, and operating and maintenance procedures. Detailed analysis of critical structural systems and process equipment are performed as necessary.

Safety Hazards

Plant personnel safety, as well as public safety issues, are analyzed to identify potentially significant health and safety risks. These include risks of environmental release of hazardous chemicals, fire and toxicity hazards, and emergency response plans.

Product Quality

Factors affecting product quality are analyzed to reduce the potential of product batches being manufactured out of specification. These include process control ranges, statistical sampling, and quality assurance testing programs. Work execution includes the identification of work to be performed, as well as the planning, scheduling, and performance of that work. This is part of an overall quality assurance or quality control program. When done properly, this element leads to optimal resource utilization.

Continuous Improvement

Continuous improvement is the process by which an organization learns from the performance of each in the process and applies that knowledge to improve effectiveness and efficiency through each process cycle. It includes proper work closeout procedure, as well as a comprehensive corrective action program (and culture), bolstered by a robust root-cause analysis program. The proper application of metrics and/or key performance indicators also play a key role in this element.

Cost Engineering Community of Practice

Mission:Photo of Harvey Canal Sector Gates - Permanent structure built to prevent storm surge from the Gulf of Mexico.

The Cost Engineering Community of Practice (COP) formulates all regulations and policies, and provide guidance and directions on all issues related to Cost Engineering for the Military Programs, Civil Works, Environmental and Construction Programs. In addition, it provides economic analysis for the Military Construction (MILCON) program and oversees the maintenance and operation support of the Cost Engineering automation tools.

COP Functions:

This Community of Practice is responsible for developing policy and guidance for USACE Computer Aided Cost Engineering System (CACES), coordinate the efforts to develop standard guidance between the DOD Tri-Service Cost Engineering Community, and provide oversight to the Assigned Responsible Agency (ARA) located at the Huntsville Engineering Support Center (HNC), Huntsville, Alabama.  It develops cost engineering policy, directions, procedures and implementation guidance for Military Construction Army (MCA), Civil Works, Environmental, as well as the  Support for Others programs.  It prepares and review planning and budget estimates annually for authorization and appropriate by Congressional Committees.  It provides staff assistance and support to the Office of the Assistant Secretary of the Army for Civil Works, ASA (CW) and the Office of the Assistant Secretary of Defense (Energy and Engineering), OASD (E&E) on cost engineering issues, including the required survey and development of DOD Area Cost Factors and Facilities Unit Prices guidance. The CoP provides cost engineering consulting and technical support to other federal, state and local agencies, field offices and the private sector. 

In addition, it is responsible for overseeing the development, reviews; applications of policy, technical criteria, standards and guidance in the area of engineering economics, economic analysis (EA), and life cycle costing (LCC) of military construction
 

Energy Brokerage & Consulting

America Approved helps you buy electricity 20 to 50% below peak rates with a simple, objective and proven strategy that eliminates uncertainty and ensures consistent, smart decision-making in much less time.

Our objective is the same as yours - to obtain the best price and best supply agreement for your company. Through our relationships with many of the nation's largest and most reliable energy providers, you will have access to highly competitive rates and programs that help you identify, understand, and manage the variables that affect the price you pay for electricity.

Purchasing of energy requires a thorough understanding of the risk factors associated with the various energy products. America Approved is your source for objective advice.

We take a consultative approach with you and make the best-case recommendations that are designed to lower your energy cost. We present you with an Energy Cost Savings Analysis that predicts your long term energy savings.

Other Services

•     Electricity & Natural Gas
•     Short & Long Term Service Agreements
•     Operations & Maintenance
•     Environmental Engineering & Permitting
•     Engineering, Procurement and Construction
•     Project Engineering Feasibility & Economic Analysis Studies
•     Project Funding & Financing
•     3rd Party Ownership & Project Development
•     Shared & Guaranteed Savings Programs

Micro Turbine Vision

As visionaries in the industry, America Approved has the foresight to recognize that micro turbines would become widespread for distributed power (combined heat & power) applications. America Approved and Capstone have formed a strategic alliance to offer our commercial clients a revolutionary Green Energy Solution. To learn more about price protection by bundling Capstone Turbines, gas and electric.

Engineering Economic Analysis

Engineering Economic Analysis Program



What is it?
The Engineering Economic Analysis HVAC Software program compares the lifecycle economics of alternative designs for HVAC systems and buildings. While primarily intended for HVAC and building applications, the program can be used for other types of economic studies as well.

The program offers four types of economic analysis studies. All four are bundled into one seamlessly integrated package.

    Private Sector Lifecycle Analysis
        Conducts detailed comparisons of the lifecycle economics of design alternatives. The analysis provides features required by private firms making investment decisions. In these applications maximizing profit is the key concern. Alternatives are rated on the basis of internal rate of return (IRR), net present worth savings and total present worth.
    Public Sector Lifecycle Analysis
        Conducts detailed comparison of lifecycle economics for design alternatives. In this case the analysis provides features required by government or non-profit organizations making economic decisions. In these applications cost effectiveness is the key concern. Designs are rated on the basis of savings to investment ratio (SIR) and total present worth.
    Simple Payback Analysis
        Compares the investment and operating costs of pairs of design alternatives to determine the payback period. This analysis is useful for quick, simple cost studies.
    Simple Cash Flow Analysis
        generates a cash flow table for each design alternative considered. This analysis is useful for projecting costs over a period of years and for determining total present worth of a design.

Engineering Economic Analysis Features

• Permits input of multiple investment cost items, loans, and depreciation of investments, annual operating costs and periodic operating costs for each design alternative.
• Calculates cash flow, total present worth, net present worth savings, internal rate of return, payback, savings to investment ratio.
•  Customizes content of reports based on the type of analysis being performed and therefore the economic criteria being used to make decisions.
• Generates reports that combine text and graphics.
• Reduces user effort by importing annual energy cost data from HAP building simulations, if desired. (Must use HAP v4.2 or later).
• Exports cash flow information in a text format suitable for loading into spreadsheet programs. This facilitates custom analysis of data by users.
• Provides extensive on-line help system and user¿s manual provide explanations, tutorials and example problems.

Saipan DOW Executive Summary

 This project was designed to investigate the economic and commercial feasibility of using cold deep ocean water (DOW) in an integrated system that would provide fresh water through atmospheric condensation and increased or new crop production through application of cold water agriculture techniques. Such an integrated system would likely be constructed in tandem with other DOW technologies, such as Sea Water Air Conditioning (SWAC), Ocean Thermal Energy Conversion (OTEC) and use of the deep ocean water for aquaculture.

The primary site for this study is the island of Saipan in the Commonwealth of the Northern Marianas Islands (CNMI). Saipan was chosen because of its dire fresh water and energy situation and the need to prove DOW concepts in tropical or semi-tropical environments. The CNMI Government had indicated its ready interest in helping to implement this project. A secondary site, as a control for the cold water agriculture experiments, was the Waimanalo Research Station of the University of Hawaii’s College of Tropical Agriculture & Human Resources (CTAHR).

The first task was to establish the feasibility of accessing deep ocean water on Saipan. As a general statement, this requires installation of a piping system that can bring sufficient quantities of cold DOW to the surface for the applications envisaged, which could potentially include not only the cold agriculture and potable water production technologies under investigation, but also Sea Water Air Conditioning, Ocean Thermal Energy Conversion, aquaculture or other technologies. In fact, using the same piping system for several of these applications in series or in tandem is probably necessary to justify the cost of the deep ocean pipes. So, the first question to be answered was whether or not the pipes themselves are feasible in the chosen location. Makai Ocean Engineering, arguably the world’s leading designer and builder of deep ocean pipes, took the lead in this part of our investigation. The answer is clear: the placement of pipes off Marpi Point on Saipan's northern coast is feasible, but at a cost of between $15 and $25 million depending on design, capacity, and precise location.

Once the feasibility of the deep pipes was established, the project focused on the twin technologies of cold agriculture and fresh water condensation. Cold agriculture (ColdAg™) was pioneered in the 1990s by Common Heritage Corporation in demonstration plots at the Natural Energy Laboratory of Hawaii. Our objective for ColdAg™ under this grant was to establish a scientific baseline for production of needed temperate zone crops in an arid tropical area using cold DOW to create the necessary growing conditions for the crops. Actual deep ocean water, of course, was not used since no deep ocean pipe yet exists off Saipan or at Waimanalo, but the cold DOW was simulated using fresh water cooled to the desired temperatures. The basic concept was to run chilled water through a closed piping system a few inches deep in the soil, chilling the soil and the plant roots to create “Spring-like” conditions for the temperate zone crops being tested. Our thesis was that such conditions chill the roots, produce fresh water condensation in the soil near the roots and may, through resultant water flow, prompt transport of natural nutrients from surrounding soil to the root systems. Results from the tests on Saipan were excellent, achieving high quality temperate zone crops in an area where they could ordinarily not be grown. Results from the control plots in Waimanalo were problematic, owing to an infestation of nematodes and failure of a generator, which made Waimanalo’s results inconsistent. The Saipan results, however, indicate that ColdAg™ was proven as a viable means of producing temperate zone crops in an arid, tropical area where such growth was otherwise not possible. The results appear to confirm the beneficial effects of creating the “Springtime” environment for the crops, though we have not yet confirmed the impact of condensation or nutrient flow. More trials are needed. The general outline of an integrated ColdAg™ system, using sample products, is shown below:

This project was not intended to produce a working prototype of a fresh water condensation system, but to further the research and design work needed to get us to that point. The concept is known to anyone who has taken a cold glass filled with ice outside in the summer. Our design work drew on an early prototype built by Common Heritage Corporation (CHC) at the Natural Energy Laboratory of Hawaii (NELHA). That prototype, which we called SkyWater, successfully produced fresh water from the atmosphere using condensation brought about be piping cold DOW through the system. Efficiencies were improved by also using available trade winds to enhance the cooling effect of the deep ocean water. Still, efficiencies were not good enough to justify fullscale applications and many questions remained concerning the design of water collectors, condensation surfaces and the materials that could increase efficiencies.

 Early SkyWater Design

Nisymco Inc. had done independent research and was brought into the project to take the lead on improving our designs. New designs were produced that combine the approaches of the two companies, and considerable progress was made on identifying appropriate materials to enhance efficiency. Building actual prototypes was beyond the scope of the project and will require additional funding.

The bottom line is that (1) deep ocean pipes are a feasible option for installation off Saipan; (2) temperate zone crops were successfully grown where they otherwise could not be grown; and (3) a vastly updated and, we believe, more efficient design was produced for condensing fresh drinking water from the atmosphere.

Economic feasibility remains a question. The "killer applications" for Deep Ocean Water have been Sea Water Air-Conditioning (SWAC) and, to a lesser extent, Ocean Thermal Energy Conversion (OTEC), neither of which were investigated in this project. SWAC is in use commercially in several projects around the world, notably in Halifax, Nova Scotia, at Cornell University (using cold lake water), at the University of Hawaii Medical School in Honolulu, and at an InterContinental Bora Bora Resort & Thalasso Spa in French Polynesia. The latter claims that SWAC has cut their electricity bill by more than 90%, thoroughly and quickly justifying the costs of putting down a deep pipe. OTEC is less proven, but we understand that efficiencies are showing dramatic improvements and that commercial operations are on the horizon. Our conclusion is that either SWAC or OTEC can justify the installation of the DOW piping system. When used as part of a system which includes SWAC and/or OTEC, ColdAg™ and SkyWater can dramatically enhance the economic viability of an integrated project by adding on new products and revenues at little or no additional initial cost. Our detailed economic analysis, included in the Technical Discussion below, concludes that the annual savings from a DOW system using SWAC, SkyWater and ColdAg™ would likely be about 11% of its capital cost.

The project was carried out by Saipan DOW Project LLC, a wholly-owned subsidiary of Common Heritage Corporation (CHC). Partners and contractors include Makai Ocean Engineering, Nisymco Inc., Nauticos LLC, Kekepana International Services, Shimokawa Architects, Inc., SSFM International Inc., Air Masters Inc. and FMS Consulting Services. Faculty and personnel of the University of Hawaii’s College of Tropical Agriculture & Human Resources were among our investigators.

Department of Industrial and Systems Engineering

Industrial and Systems Engineering at Oakland University
Industrial and systems engineering is a discipline with roots in a diverse spectrum of engineering fields including the understanding and application of techniques for work measurement, ergonomics, optimization, facility layout, engineering economic analysis, and life cycle processes. The Industrial and Systems Engineering Department applied this diversity in developing an industrial and systems engineering program that focuses on the application of these skills into a particular domain. Typical domains addressed by industrial and systems engineering include manufacturing, health care, logistics, racing, service industries, and others. The coordination of engineering tasks and the assembly of a complex array of human and engineering subsystems into a holistic solution are typical of the industrial and systems approach to problem solving and design.

Industrial and Systems Engineering Department Mission Statement

The Department of Industrial and Systems Engineering carries out the mission of the School of Engineering and Computer Science by offering an undergraduate major in Industrial and Systems Engineering. The department also offers master's programs in Industrial and Systems Engineering as well as in Engineering Management in cooperation with the School of Business Administration, and a doctoral program in Systems Engineering.

Program Educational Objectives

The objectives of the Industrial and Systems Engineering program are to produce graduates who will:

• design complex human and engineering systems composed of diverse components that interact in prescribed ways to meet specified objectives;
• use laboratory (instrumentation, testing, prototyping, etc) and/or computer skills for engineering analysis and design;
• adapt and contribute to new technologies and methods, and use these in engineering design;
• if desired, pursue successfully graduate study in industrial and systems engineering or related disciplines;
• function successfully in local, national or global technology-driven industries;
• exhibit the willingness and flexibility to seek, accept and be effective in a variety of roles, such as developing and implementing solutions to problems with technical and non-technical elements, serving as a team member and leading others;
• communicate effectively in both written and verbal forms;
• exhibit high standards of personal and professional integrity and ethical responsibility.

DATA OVER WIRELESS A PRIMER

 INTRODUCTION
 Up until as recently as 1996, the only economical way for a business to receive and transmit high-speed data (defined for our purposes as data received at speeds of one megabit per second and higher) was through the wired infrastructure built by the regional Bell operating companies (RBOC's). Aside from some small portions of very dense major metro areas that could support wired competition, there were no other options. And outside of businesses, of course, there were no options, period. Home data users had to content themselves with modems running at 28.8 Kbps (kilobits per second) over telco twisted pairs.

In the space of only three years, spurred in part by the growth of the Internet and in part by the opportunity of competing with an overpriced monopoly, several new wireless infrastructures for high-speed data have been proposed and are being built. This has the dual benefit of reducing costs for those businesses that bought high-speed data lines from RBOC's, and vastly extending the reach and coverage of data accessibility, to the point where for the first time, small businesses and residences can economically participate.

This explosion of High-Speed Access (HSA) will be the infrastructure supporting the second generation Internet, with higher levels of interactivity, media content, and computing power, than the Internet (first generation) now in use. The participants in this wireless explosion fall into certain broad categories that we will examine below. As you will see, the functionality and business plans are not the same. MMDS and LMDS, for instance differ greatly in cost and ultimate target markets. But in the end, an exploding HSA pie will ensure that each wireless data entrant, if well run, can have a profitable piece.

FIXED VS. MOBILE
 Up until recently, the mention of "the wireless communications industry" meant one thing; cellular telephone. That does not hold true anymore. Therefore, it is necessary to distinguish the sort of wireless data options we are talking about. The nation's cellular and PCS networks utilize highly cellularized architectures with low-density modulation schemes optimized for mobility . This means a great deal of system capacity is dedicated to ensuring that a moving vehicle can remain in contact. No matter how much ingenuity is applied to other uses of the network, the fact is that the original and highest priority use of it is to provide digitized mobile voice connections at only about a 10 Kbps equivalent data rate.

While there are initiatives underway by such companies as Microsoft, Qualcomm, and Motorola to overlay certain data capacities on such networks, they will still be configured for mobile or semi-mobile access using base stations with low cost omni-directional antennae. Cost-per-bit-per-second will likely be at a premium, and reflect the mobility aspect. The new wireless options are called "fixed wireless", as opposed to "mobile." Fixed here refers to a fixed location. In this case, the antenna is highly directional, high gain, and mounted to a building. Since buildings don't move, system capacity that would otherwise have been used to ensure uniform coverage for mobility can now be redirected to providing higher throughput.

Denser modulation schemes requiring higher signal-to-noise ratios can be used. And data rates can easily reach 10 megabits per second and higher, a 1,000-fold increase from current mobile capacity. As a result, cost-per-bit-per-second is orders of magnitude lower than in a mobile system. While mobile data access systems are being designed and will be built, our assumption here is that they will attack a fundamentally different market opportunity, and be some years behind their fixed counterparts with regard to wide-scale deployment. We will confine our attention to fixed wireless systems from here on.

WIRELESS FREQUENCY BANDS

 During the latter half of the 1990's, the FCC was under a congressional mandate to raise revenues through the auctioning of spectrum. In the process, it made several new bands of wireless spectrum available. At the same time, due to the Telecommunications Act of 1996, it was under a mandate to create viable competitive opportunities for wireless competition to RBOCs. This led it to enhance the capacity of certain preexisting spectrum licenses. The result is a host of new omni directional wireless HSA networks under construction. While there are other frequency bands (4.6 GHz, 12 GHz, etc.) where private users can provision individually licensed point-to-point data links at high cost, these will not be the source of the HSA explosion. Rather, the new allocations promote omni-directional transmission, with no receive site licensing required. We will focus on these new omni-directional transmission bands.
The MMDS Band (2.5 GHz)

During the 60's, 70's, and 80's, the FCC allocated approximately 200 megahertz of spectrum at 2.1 and 2.5-2.7 GHz frequency for television transmission. With the new digital technology and the new competitive mandate, the FCC greatly increased the flexibility of this band beyond simple video to full two way digital communications, excluding only mobility. In two separate rulemakings in 1995 and 1998, the FCC allowed for digital transmission utilizing CDMA, QPSK, VSB, and QAM modulation schemes yielding up to five bits-per-hertz (one gigabit-per-second total raw capacity for the band), and return transmission from multiple sites within a 35 mile radius protected service area. The spectrum is utilized in omni-directional fashion from a central antenna, and may be cellularized as necessary. As we will see below, a major advantage in using this band is that the physical need to cellularize is much less than in other major bands. With appropriate terrain characteristics, a single MMDS cell can cover a 35 mile radius, or 3,850 square miles. Current HSA systems using this band utilize cable modem technology, delivering 10 to 30 megabits-per-second (Mbps) downstream, and 32 Kbps to 10 Mbps upstream. CPE costs and coverage areas make this band appropriate for full coverage of large land areas, and provision of service to small businesses and homes not in dense clusters, as well as higher clustered businesses. Major deployments in this band have been begun by SpeedChoice in Phoenix and Detroit, and by Wavepath (Videotron) in San Francisco and Silicon Valley.


The DEMS Band (24 GHz)

This band was originally allocated at 18 GHz, with 100 MHz bandwidth. Teligent Corporation consolidated ownership of the band, and convinced the FCC to relocated it to 24 GHz with a 400 MHz allocation. Teligent is the only operator at this band. The frequency requires a high level of cellularization to cover a large area, and is particularly suitable for dense urban core markets. Cell size is about 2 miles in radius, or 12.6 square miles coverage area per cell. Teligent is deploying a wireless ATM backbone solution which is primarily geared to provide standard telephone service (POTS) at a 30% discount to RBOC prices. Along with this telephone service, Teligent can provision T-1 speed (1.544 Mbps) data links, but these links are not their primary business, and are bundled exclusively with POTS.

The LMDS Band (28 GHz)

This band was auctioned in 1998, with only a few major players participating. It consists of an "A" block with 1150 MHz bandwidth, and "B" block with 150 MHz bandwidth. With the purchase of WNP Communications by NextLink, the two major winners consolidated in 1999, and NextLink now owns 95% of the LMDS spectrum in the top 30 markets. Vendors have not finalized equipment specification or pricing, but early indications show a preference for ATM-based solutions similar to those employed by Teligent and Winstar. As with all solutions in this frequency range, a high degree of cellularization is required with this band. Cell size is about 2 miles in radius, or 12.6 square miles.

The 38 GHz Band

This band is primarily licensed to Winstar and Advanced Radio Telecommunications (ARTT). Winstar utilizes ATM-based equipment from Lucent, and provides POTS and high-speed data. The extremely high frequency used with this band requires intense cellularization, with cells of 1 mile radius, or 3.14 square miles. It should be noted that with all of the high-frequency bands, initial deployment in a city may not be omni-directional. It is more economical early on to deploy point-to-point links as customers are sold, creating a spider web-like network of buildings. Later, an omni-directional cell site can be overlaid if economies warrant. However, this will impose certain retrofit costs on the infrastructure.

Other bands

The FCC has licensed a variety of other bands for omni-directional transmission, but none with the bandwidth and exclusive licensing structures of those above. For instance, the WCS band was auctioned off in 1996. While this band at 2.3 GHz frequency would ordinarily have good operational prospects, its narrow allocation (20 MHz) and inopportune channel configuration make its use primarily attractive in conjunction with other bands. Also, there is public spectrum at 2.4 GHz called the ISM, or Instrument Scientific Medical band, which some ISP's have begun dabbling in for wireless links. Since this is public spectrum, there is no exclusive license, and so long as equipment meets FCC specs, anyone can operate in the band. This raises the specter of overcrowding, interference, and breaches of security. It is unlikely that a business would want to use this band for mission critical applications, and it is also unlikely that this band would scale appropriately for mass residential use.

SIGNAL PROPAGATION

 The single most important factor in the structure and economics of the infrastructure required for a given wireless frequency band is the band's propagation characteristics. That is, how far does the signal reach at a given power level under given terrain, foliage, and weather conditions. First, one variable is constant across all the spectrum bands discussed above: They require direct line of sight. This means the path between the transmitter and receive site must be substantially unobstructed. If terrain is hilly, or if foliage is dense, then line of sight opportunities must be multiplied through cellularization. This is true of all of these bands. If it is less true of cellular telephone and PCS, this is not because the propagation characteristics of these bands are different, but because they utilize a high degree of cellularization combined with extremely low density modulation schemes which do not require as robust a link, and therefore yield low data rates.

In dry weather, the primary variable determining signal propagation distance is the frequency band. Certain low frequency bands can usefully propagate for thousands of miles, and certain high frequency bands (optical bands, for instance) for only some thousands of feet. Beyond a certain distance, a receive antenna of given size and gain is unable to receive the signal. One could always put larger and larger receive antennae in place, but this obviously would severely limit the willingness of homeowners and businesses to use the service. Generally speaking, an antenna size of 18 inches or less is essential to a service for wide acceptability. Looking at the relative propagation characteristics of the bands listed above then, we see an ever-shorter transmission distance.

Thus, a signal at 38 GHz frequency will lose 230 times more signal strength over a one mile transmission path than an MMDS signal. A 28 GHz signal will lose 130 times more, and a 24 GHz signal 99 times more than an MMDS signal over a one mile path. These calculations are for dry air only, and the comparisons are further weighted in favor of MMDS when rain fade is accounted for. (See below.)At certain frequency bands, the problem of attenuation is greatly exacerbated by effects of weather. At high frequency bands such as 24, 28, and 38 GHz, wavelengths are short enough that raindrops can actually present line-of-sight obstacles, and greatly attenuate the signal. This then requires a further shortening of signal radius over what would otherwise be available in dry air. In order to engineer systems with five nines reliability or greater, transmission radii must be kept to a minimum at these bands. Even so, certain links may go down in real but statistically unlikely torrential downpours.

With regard to the MMDS band, due to its longer wavelength, rain represents no obstacle to a properly engineered system. Due to its prior incarnation transmitting TV signals, there are MMDS systems with years of continuous transmission history, and no effects whatsoever from rain. While there are engineering factors that can be applied to the higher bands to take account of rain, they have not been tested by real world commercial operation for years at a time. The design choices at the higher bands are essentially statistical "?bets' that certain forms of torrential weather will not happen more often than estimated.

MODULATION AND REUSE SCHEMES
 At a given power receive level and modulation scheme, the fundamental capacity of all spectrum is the same, bit-for-bit and hertz-for-hertz. For instance, 64 QAM modulation provides 5 bits per hertz, QPSK modulation 1.6 bits per hertz, no matter what frequency band they are used in. However, in an effort to squeeze more distance out of system transmission specification, lower density modulation allows greater distance at a given power, but sacrifices data throughput rates. Thus, MMDS can make use of 64 QAM for its downstream links, giving a raw downstream capacity of about 1 Gbps for its 200 MHz of bandwidth. LMDS systems, however utilize QPSK, and therefore realize about 1.8 Gbps of raw capacity, even though they have five times the MMDS bandwidth. This allows LMDS systems to use a cell radius of 2 miles, rather than the much smaller radius that would be required for them to use 64 QAM.

The net effect of the small cell size forced on 24, 28, and 38 GHz systems is that they must repeat the spectrum often via many separate cells in the market. We will discuss the cost implications of this below. Since each cell repeats some portion of the spectrum in some form this multiplies the capacity. This is a fundamental spectrum reuse scheme, albeit one forced upon such high frequency systems by their propagation characteristics.

 Figure 1:  30 Degree Sectorized Antenna Pattern.
Channel A = Red, Channel B = Green.  Channel Reuse factor = 6

Another form of capacity multiplication is to sectorize the transmission pattern. Thus, in one simple version, instead of transmitting channel A on a 360 degree pattern, and channel B on a 360 degree pattern (effective coverage of two channels), channels A and B would be alternated in pie shaped sectors. If, for instance, twelve thirty degree sectors were used, there would be six channel A's, and six channel B's, each capable of carrying completely separate data. Thus, the effective coverage would be 12 channels, or more if sectors were allowed to overlap. All omni-directional wireless data systems make use of this sort of method, either for outbound transmission, inbound reception, or both. (Figure 1)


CELLULARIZATION: OBLIGATION OR OPPORTUNITY?  High frequency systems (24 to 38 GHz) will transmit only short distances. This means that in order to cover large areas, these systems are obligated to cellularize. This obligation imposes costs that in turn require certain densities of customers to justify. MMDS systems will transmit 35 miles in a single cell site. Therefore, given flat terrain in either case, MMDS systems are not obligated to cellularize. It is very important to note that not being obligated to cellularize doesn't mean it won't happen. It means that the designers of MMDS systems can decide to cellularize where the economic opportunity lies. This can lead to much more economic deployment of MMDS.
 Figure 1:  30 Degree Sectorized Antenna Pattern.
Channel A = Red, Channel B = Green.  Channel Reuse factor = 6

Another form of capacity multiplication is to sectorize the transmission pattern. Thus, in one simple version, instead of transmitting channel A on a 360 degree pattern, and channel B on a 360 degree pattern (effective coverage of two channels), channels A and B would be alternated in pie shaped sectors. If, for instance, twelve thirty degree sectors were used, there would be six channel A's, and six channel B's, each capable of carrying completely separate data. Thus, the effective coverage would be 12 channels, or more if sectors were allowed to overlap. All omni-directional wireless data systems make use of this sort of method, either for outbound transmission, inbound reception, or both. (Figure 1)


CELLULARIZATION: OBLIGATION OR OPPORTUNITY?  High frequency systems (24 to 38 GHz) will transmit only short distances. This means that in order to cover large areas, these systems are obligated to cellularize. This obligation imposes costs that in turn require certain densities of customers to justify. MMDS systems will transmit 35 miles in a single cell site. Therefore, given flat terrain in either case, MMDS systems are not obligated to cellularize. It is very important to note that not being obligated to cellularize doesn't mean it won't happen. It means that the designers of MMDS systems can decide to cellularize where the economic opportunity lies. This can lead to much more economic deployment of MMDS.

Figure 2: A Three Cell Supercell Design

 In the case of the SpeedChoice's Phoenix deployment, a so-called "supercell" transmission design has been employed. This means that a major cell overlays the entire market, in this case broadcasting from South Mountain. The radius of this cell is effectively 35 miles. Return spectrum is sectorized into 45 degree sectors. A second cell site has been deployed to cover an area of terrain shadow generated by Shaw Butte. With this configuration, the system can obtain an estimated 85% coverage with two-way wireless HSA service. Additional cells can be deployed, but essentially only need be deployed to add capacity or fill in small gaps in line-of-sight. In other words, the business plan is secured with two or three cells, but is by no means restricted to two or three cells. The effective area covered by this deployment is 3,850 square miles. By comparison, an LMDS system built to cover the same area would require 306 cells, using a 2 mile radius. The graph below shows the number of cells required to fill a 3,850 square mile area as the cell radius varies.

Figure 2: A Three Cell Supercell Design

 In the case of the SpeedChoice's Phoenix deployment, a so-called "supercell" transmission design has been employed. This means that a major cell overlays the entire market, in this case broadcasting from South Mountain. The radius of this cell is effectively 35 miles. Return spectrum is sectorized into 45 degree sectors. A second cell site has been deployed to cover an area of terrain shadow generated by Shaw Butte. With this configuration, the system can obtain an estimated 85% coverage with two-way wireless HSA service. Additional cells can be deployed, but essentially only need be deployed to add capacity or fill in small gaps in line-of-sight. In other words, the business plan is secured with two or three cells, but is by no means restricted to two or three cells. The effective area covered by this deployment is 3,850 square miles. By comparison, an LMDS system built to cover the same area would require 306 cells, using a 2 mile radius. The graph below shows the number of cells required to fill a 3,850 square mile area as the cell radius varies.

 Bellcore, the engineering consulting firm formerly owned by AT&T, published a study and economic analysis of LMDS prior to the LMDS auctions. In it, the study assumed that in a market of 1.3 million homes, a 2.5 to 3 mile cell radius was used, and analyzed the economics of providing data, video, and telephony services. The conclusion was that only 25 cells covering only 2% of the land area should be built to yield an economic business. These 25 cells would each require capital expense, site acquisition, rooftop leases, fiber backhaul connections, etc. Clearly, the rest of the market area must be left uncovered to preserve favorable economics at this high band.

 Figure 4:  Example: Coverage Comparison of 25 two-mile radius cells
and one 35 mile radius MMDS Supercell.

As a result of the system infrastructure economics demanded by the frequency propagation characteristics at these high bands, it is no surprise that Teligent, Winstar and ARTT have all stated that their current business plans are to serve businesses only . Considering that only certain high-end demographics would support HSA in residences, and further considering that those high-end demographic people tend to live in highly dispersed neighborhoods and housing, it would highly uneconomical to put up an expensive cell site covering a few square miles for what might at the end of the day be a few dozen customers.

BUSINESSES AND RESIDENCES: WHAT? IS THE DIFFERENCE?

 We all know what a business location is. It's a really big building where a lot of people work. We also know what a residential location is. It's a house where a few people live but don't work. And of course, the needs and nature of these two markets are entirely different. Not anymore . The fact is, the island of Manhattan aside, business people have been dispersing from the really big buildings for decades. During the 60's, 70's and 80's, the urban cores suffered meltdowns to rings of suburban-based enterprises. Businesses locating in the suburban ring 10 to 25 miles out enjoyed more space, lower cost of operations, easier recruiting, and greater flexibility. This "doughnutization" of the urban business profile is well documented, and followed the extensive development of the national highway system and the various municipal road systems that feed it. The next step began in the 90's and will carry over to the 00's.

This is the "atomization' of the workforce, the ultimate dispersal. Called by various names like telecommuting and the virtual office, it simply means that more and more people will still be gainfully employed working for large companies, but will be spending more and more time working at home. Of course, here it is not a road system that enables the transition, but a global information superhighway ??? the Internet. The Phoenix market is a particular example of the imperatives that drive telecommuting.

The City of Phoenix has a special telecommuting program in place that provides incentives for businesses to use it. In fact, there are financial penalties for businesses in Phoenix that do not implement telecommuting. On a smog alert day, large companies are required to keep at least 5% of their workforce home. As a result, certain large companies in Phoenix have over two thousand telecommuters each. There may well be enough telecommuters in Phoenix to populate a small city. As the Internet, through Virtual Private Networks (VPN), becomes the preferred means of most telecommuting strategies, companies more and more will wish to have umbrella coverage of an entire market by a single Internet provider. As usage gets more intense, it becomes extremely expensive to have an employee wait half an hour while a large spreadsheet or graphic downloads with a 56 Kbps modem. For only a few dollars more per month, the employee can save many hours per month, thus the economics highly favor High-Speed Access. The issue then becomes finding an HSA provider that covers the market.

Currently, wireless operators like SpeedChoice are able to do so instantaneously, facilitating high-speed connections to dozens or thousands of sites. The SpeedChoice supercell design creates and umbrella that covers an entire market at once, enabling the connections of dispersed homes and businesses to a single high-speed network. On the other hand, high frequency networks like LMDS can only provide limited pockets of service and will not have ubiquitous residential coverage, if any.
 

CONCLUSION

 Certain technologies create niches no one knew were there. Kenneth Olsen, the CEO of the now defunct Digital Equipment Corporation, was quoted as saying "There is no reason for anyone to have a computer in their home." That's not as dumb a statement as it seems today. When he said it, there were no at home uses for a computer that seemed compelling. Such uses were developed once the platform was available. By merely existing, these new technologies create niches. Other technologies fill needs that are clear and well established. Certainly wireless competition to the RBOC monopoly falls into this category.

The best possible situation would be a combination of both. This would be a technology with a quick fix to an empty niche, but with enough new functionality that it will be used in unforeseen ways. HSA over MMDS should be in this category. The nature of Internet use is changing rapidly, and the need for Internet access is exploding.

Add to that the new technology's ability to reach both homes and businesses and get them up and running quickly and economically, and the possibilities are endless. This is true for SpeedChoice and all other vendors providing services using the MMDS spectrum.

Engineering Management, Economics & Ethics

Engineers should possess necessary management skills and ethical quality to bridge the gap between technology and business. These skills become progressively important as they take on senior managerial positions in the professional careers. The success of a technological development from concept to commercial product highly relies on effective research strategy, technology & product life cycle analysis, production planning, project management, quality management and so on. Proper protection of intellectual property should be ensured by means of patent, copyright or trademark. Engineering economic analysis should be performed in decision making among feasible alternative engineering solutions in order to maximise the economic benefit.

Applied Economic Analysis (AEA)

Through our Applied Economic Analysis (AEA) capabilities and services, Booz Allen Hamilton helps government agencies optimize resource allocation decisions through disciplined and empirical-based cost, financial, and economic analyses.  Our professional staff assist clients with decisions regarding capability optimization and acquisition development by using cost estimating, modeling and analysis, analysis of alternatives, capital asset management, applied microeconomic and macroeconomic analysis, and statistical analysis. Booz Allen provides clients with rigorous, robust, and rational analytical support that is critical to the achievement of project performance, cost objectives, and schedule objectives.

One of our foundational AEA capabilities is Cost Estimating.  In today’s budget-minded world, it is one thing to formulate an important program and another to justify its costs.

    From start to finish, you must know “the numbers” and the factors that drive them.  Booz Allen addresses the entire scope of a program, including system development, maintenance, contractor involvement, acquisition, installation, training, and more.  Working side by side with technical and program staff, we develop a baseline description of the program and its cost elements.  Booz Allen staff then employ advanced techniques and models to estimate costs and validate them for completeness, accuracy, and consistency.  Along with other methods, we develop and employ parametric cost estimating models that can analyze “what if” scenarios for any cost element.