Evaluation Method for Strategic Investments

Real Options Analysis (ROA) has become a complimentary tool for engineering economics. It has become popular due to the limitations of conventional engineering valuation methods; specifically, the assumptions of uncertainty. Industry is seeking to quantify the value of engineering investments with uncertainty. One problem with conventional tools are that they may assume that cash flows are certain, therefore minimizing the possibility of the uncertainty of future values. Real options analysis provides a solution to this problem, but has been used sparingly by practitioners. This paper seeks to provide a new model, referred to as the Beta Distribution Real Options Pricing Model (BDROP), which addresses these limitations and can be easily used by practitioners. The positive attributes of this new model include unconstrained market assumptions, robust representation of the underlying asset‟s uncertainty, and an uncomplicated methodology. This research demonstrates the use of the model to evaluate the use of automation for inventory control.

Evaluation of Sodium Lauryl Sulfate as a Blackbird Wetting Agent

New and improved strategies are needed for managing overabundant blackbird (Icteridae spp.) populations in some areas of the United States. From 2004 to 2007, we evaluated sodium lauryl sulfate (SLS) as a wetting agent during controlled outdoor cage and flight pen tests in Colorado and small-scale field tests at urban blackbird roosts in Missouri. In the outdoor cage tests (ambient temperature -5 to 2° C), mortality of male red-winged blackbirds (Agelaius phoeniceus) sprayed with 1, 2, and 5 ml of SLS on the back feathers only, on the breast feathers only, or on both breast and back feathers ranged from 25% to 100%. A SLS spray on male red-winged blackbirds at 2° C ambient temperature with 1 ml of SLS sprayed on breast feathers and back feathers resulted in 90% mortality in less than 60 minutes. In a flight pen test (-12 to -5° C ambient temperature ), SLS sprayed at 20 l per 3,400 l of water with a single ground-based sprinkler-head system over 35 male red-winged blackbirds roosting in cedar trees (Juniperus virginiana) resulted in 53% mortality. There was no mortality in the control group exposed to the same treatment without the SLS. Small-scale field tests conducted in Missouri at 6 sites with a single ground-based sprinkler-head spray system and at 2 sites with 4 sprinkler-head spray systems resulted in mortality that ranged from 0 to 4,750 and 4,500 to 15,000 blackbirds and starlings, respectively. Spray operations lasted from 28 to 208 minutes. Each spray covered about 200 m2 . At all sites, mortality of blackbirds sprayed with the SLS occurred as soon as 30 minutes post-SLS application. Mortality at two sites where pump problems precluded completing the spray ranged from 0 to 800 birds. Air leaving the system as the system was activated caused birds to flush from the roost trees. Poor water quality and pump durability were problems at some sites.

Yield potential and resource-use efficiency of maize systems in the western U.S. Corn Belt

Maize demand for food, livestock feed, and biofuel is expected to increase substantially. The Western U.S. Corn Belt accounts for 23% of U.S. maize production, and irrigated maize accounts for 43 and 58% of maize land area and total production, respectively, in this region. The most sensitive parameters (yield potential [YP], water-limited yield potential [YP-W], yield gap between actual yield and YP, and resource-use efficiency) governing performance of maize systems in the region are lacking. A simulation model was used to quantify YP under irrigated and rainfed conditions based on weather data, soil properties, and crop management at 18 locations. In a separate study, 5-year soil water data measured in central Nebraska were used to analyze soil water recharge during the non-growing season because soil water content at sowing is a critical component of water supply available for summer crops. On-farm data, including yield, irrigation, and nitrogen (N) rate for 777 field-years, was used to quantify size of yield gaps and evaluate resource-use efficiency. Simulated average YP and YP-W were 14.4 and 8.3 Mg ha-1, respectively. Geospatial variation of YP was associated with solar radiation and temperature during post-anthesis phase while variation in water-limited yield was linked to the longitudinal variation in seasonal rainfall and evaporative demand. Analysis of soil water recharge indicates that 80% of variation in soil water content at sowing can be explained by precipitation during non-growing season and residual soil water at end of previous growing season. A linear relationship between YP-W and water supply (slope: 19.3 kg ha-1 mm-1; x-intercept: 100 mm) can be used as a benchmark to diagnose and improve farmer’s water productivity (WP; kg grain per unit of water supply). Evaluation of data from farmer’s fields provides proof-of-concept and helps identify management constraints to high levels of productivity and resource-use efficiency. On average, actual yields of irrigated maize systems were 11% below YP. WP and N-fertilizer use efficiency (NUE) were high despite application of large amounts of irrigation water and N fertilizer (14 kg grain mm-1 water supply and 71 kg grain kg-1 N fertilizer). While there is limited scope for substantial increases in actual average yields, WP and NUE can be further increased by: (1) switching surface to pivot systems, (2) using conservation instead of conventional tillage systems in soybean-maize rotations, (3) implementation of irrigation schedules based on crop water requirements, and (4) better N fertilizer management.