Accommodating energy price volatility in life cycle cost analysis of asphalt pavements

Energy price is related to more than half of the total life cycle cost of asphalt pavements. Furthermore, the fluctuation related to price of energy has been much higher than the general inflation and interest rate. This makes the energy price inflation an important variable that should be addressed when performing life cycle cost (LCC) studies re- garding asphalt pavements. The present value of future costs is highly sensitive to the selected discount rate. Therefore, the choice of the discount rate is the most critical element in LCC analysis during the life time of a project. The objective of the paper is to present a discount rate for asphalt pavement projects as a function of interest rate, general inflation and energy price inflation. The discount rate is defined based on the portion of the energy related costs during the life time of the pavement. Consequently, it can reflect the financial risks related to the energy price in asphalt pavement projects. It is suggested that a discount rate sensitivity analysis for asphalt pavements in Sweden should range between –20 and 30%.

Plant oils as fuels for compression ignition engines: a technical review and life-cycle analysis

As an alternative fuel for compression ignition engines, plant oils are in principle renewable and carbon-neutral. However, their use raises technical, economic and environmental issues. A comprehensive and up-to-date technical review of using both edible and non-edible plant oils (either pure or as blends with fossil diesel) in CI engines, based on comparisons with standard diesel fuel, has been carried out. The properties of several plant oils, and the results of engine tests using them, are reviewed based on the literature. Findings regarding engine performance, exhaust emissions and engine durability are collated. The causes of technical problems arising from the use of various oils are discussed, as are the modifications to oil and engine employed to alleviate these problems. The review shows that a number of plant oils can be used satisfactorily in CI engines, without transesterification, by preheating the oil and/or modifying the engine parameters and the maintenance schedule. As regards life-cycle energy and greenhouse gas emission analyses, these reveal considerable advantages of raw plant oils over fossil diesel and biodiesel. Typical results show that the life-cycle output-to-input energy ratio of raw plant oil is around 6 times higher than fossil diesel. Depending on either primary energy or fossil energy requirements, the life-cycle energy ratio of raw plant oil is in the range of 2–6 times higher than corresponding biodiesel. Moreover, raw plant oil has the highest potential of reducing life-cycle GHG emissions as compared to biodiesel and fossil diesel.

Economists' perceptions versus managers' decisions:an experiment in transaction cost analysis

Are the perceptions of professional economists on transaction costs consistent with make-or-buy decisions made within firms? The answer may have important implications for transaction cost research. Data on firms' outsourcing during the new product development process are taken from a largescale survey of UK, German and Irish manufacturing plants, and we test the consistency of these outsourcing decisions with the predictions derived from the transaction cost perceptions of a panel of economists. Little consistency is evident between actual outsourcing patterns and the predictions of the (Williamsonian) transactions cost model derived from the panel of economists. There is, however, evidence of a systematic pattern to the differences, suggesting that a competence or resource-based approach may be relevant to understanding firm outsourcing, and that firms are adopting a strategic approach to managing their external relationships. © Cambridge Political Economy Society 2005; all rights reserved.

Crossing threshold periods in the retail life cycle:Insights from Wal-Mart international

This article takes a broader theoretical perspective of the retail life cycle by incorporating threshold periods at important inflection points in the international growth process. Specifically, it considers one threshold interval between an early phase of disjointed international expansion and a more focused, accelerated international growth programme. It concludes that executives need to consider a set of threshold periods during the development and growth of international store operations, understand why these events occur, and consider in what ways to respond to them to overcome and cross the threshold. Salient lessons are extracted from Wal-Mart's experiences during the threshold period for other international managers. © 2005 Elsevier Ltd. All rights reserved.

What to expect after the honeymoon:testing a life cycle theory of franchise relationships

This research examines the evolution of interorganizational relationships in a franchising context. Using U-curve theory, we develop three hypotheses and contrast them with traditional lifecycle theory. Three groups of constructs are affected by lifecycle: cooperation variables, dependence variables, and relationship variables. Four distinct stages emerge, with highest levels of variables in the honeymoon stage, lower levels in routine and crossroad stages, and increasing levels in the stabilization stage. Franchisors should strive for “stability on high levels” before operational realities influence the franchisees. Franchisees’ intermediate lifecycle phases are most critical for the system, since opportunistic behavior and switching are most likely.

Geographical variation in carbon dioxide fluxes from soils in agro-ecosystems and its implications for life-cycle assessment

1. Exchange of carbon dioxide (CO2) from soils can contribute significantly to the global warming potential (GWP) of agro-ecosystems. Due to variations in soil type, climatic onditions and land management practices, exchange of CO2 can differ markedly in different geographical locations. The food industry is developing carbon footprints for their products necessitating integration of CO2 exchange from soils with other CO2 emissions along the food chain. It may be advantageous to grow certain crops in different geographical locations to minimize CO2 emissions from the soil, and this may provide potential to offset other emissions in the food chain, such as transport. 2. Values are derived for the C balance of soils growing horticultural crops in the UK, Spain and Uganda. Net ecosystem production (NEP) is firstly calculated from the difference in net primary production (NPP) and heterotrophic soil respiration (Rh). Both NPP and Rh were estimated from intensive direct field measurements. Secondly, net biome production (NBP) is calculated by subtracting the crop biomass from NEP to give an indication of C balance. The importance of soil exchange is discussed in the light of recent discussions on carbon footprints and within the context of food life-cycle assessment (LCA). 3. The amount of crop relative to the biomass and the Rh prevailing in the different countries were the dominant factors influencing the magnitude of NEP and NBP. The majority of the biomass for lettuce Lactuca sativa and vining peas Pisum sativum, was removed from the field as crop; therefore, NEP and NBP were mainly negative. This was amplified for lettuces grown in Uganda (-16·5 and -17 t C ha-1 year-1 compared to UK and Spain -4·8 to 7·4 and -5·1 to 6·3 t C ha-1 year-1 for NEP and NBP, respectively) where the climate elevated Rh. 4. Synthesis and applications. This study demonstrates the importance of soil emissions in the overall life cycle of vegetables. Variability in such emissions suggests that assigning a single value to food carbon footprints may not be adequate, even within a country. Locations with high heterotrophic soil respiration, such as Spain and Uganda (21·9 and 21·6 t C ha-1 year-1, respectively), could mitigate the negative effects of climate on the C costs of crop production by growth of crops with greater returns of residue to the soil. This would minimize net CO2 emissions from these agricultural ecosystems.

Life cycle assessment in the food supply chain:a case study

This research aims at assessing the environmental impact of the poultry supply chain from cradle to grave using case study research and also life cycle assessment (LCA). While a limited number of generic poultry production LCA studies have been published, fewer yet assess the whole process of a specific organisation, none comparing the increased impact of further processing. Our results show that irrespectively of the impact assessment method utilised, the process of producing portions is considerably higher in total environmental impact due to the extra raw material required to produce the same mass into retail. Our research contributes to the growing number of LCA studies and could be used by practitioners for comparison against national and international averages. From a theoretical point of view, this research provides new insights into the relationship between vertically integrated supply chains and environmental performance which has not been examined in the past.

Transaction cost analysis

Transaction cost theory is one of the most widely used theories in marketing, management, and economics. The focus of the theory is on explaining how firms organize transactions. The rules by which transactions are organized is called governance. A wide variety of strategic decisions of firms, such as outsourcing, the mode of organizing exports, the use of crowdsourcing, or partner selection efforts, can be analyzed and understood using transaction cost theory. The basic argument of transaction cost theory is that firms economize on costs by choosing a form of governance that minimizes production and transaction costs. We discuss the origins and uses of the theory, critical variables, assumptions, and limitations.

Project risk management:a combined analytic hierarchy process and decision tree approach

Time, cost and quality achievements on large-scale construction projects are uncertain because of technological constraints, involvement of many stakeholders, long durations, large capital requirements and improper scope definitions. Projects that are exposed to such an uncertain environment can effectively be managed with the application of risk management throughout the project life cycle. Risk is by nature subjective. However, managing risk subjectively poses the danger of non-achievement of project goals. Moreover, risk analysis of the overall project also poses the danger of developing inappropriate responses. This article demonstrates a quantitative approach to construction risk management through an analytic hierarchy process (AHP) and decision tree analysis. The entire project is classified to form a few work packages. With the involvement of project stakeholders, risky work packages are identified. As all the risk factors are identified, their effects are quantified by determining probability (using AHP) and severity (guess estimate). Various alternative responses are generated, listing the cost implications of mitigating the quantified risks. The expected monetary values are derived for each alternative in a decision tree framework and subsequent probability analysis helps to make the right decision in managing risks. In this article, the entire methodology is explained by using a case application of a cross-country petroleum pipeline project in India. The case study demonstrates the project management effectiveness of using AHP and DTA.

Construction risk management:a quantitative approach

Conventional project management techniques are not always sufficient for ensuring time, cost and quality achievement of large-scale construction projects due to complexity in planning and implementation processes. The main reasons for project non-achievement are changes in scope and design, changes in Government policies and regulations, unforeseen inflation) under-estimation and improper estimation. Projects that are exposed to such an uncertain environment can be effectively managed with the application of risk numagement throughout project life cycle. However, the effectiveness of risk management depends on the technique in which the effects of risk factors are analysed and! or quantified. This study proposes Analytic Hierarchy Process (AHP), a multiple attribute decision-making technique as a tool for risk analysis because it can handle subjective as well as objective factors in decision model that are conflicting in nature. This provides a decision support system (DSS) to project managenumt for making the right decision at the right time for ensuring project success in line with organisation policy, project objectives and competitive business environment. The whole methodology is explained through a case study of a cross-country petroleum pipeline project in India and its effectiveness in project1nana.gement is demonstrated.

Risk based decision support system for effective implementation of projects

Conventional project management techniques are not always sufficient to ensure time, cost and quality achievement of large-scale construction projects due to complexity in planning, design and implementation processes. The main reasons for project non-achievement are changes in scope and design, changes in government policies and regulations, unforeseen inflation, underestimation and improper estimation. Projects that are exposed to such an uncertain environment can be effectively managed with the application of risk management throughout the project's life cycle. However, the effectiveness of risk management depends on the technique through which the effects of risk factors are analysed/quantified. This study proposes the Analytic Hierarchy Process (AHP), a multiple attribute decision making technique, as a tool for risk analysis because it can handle subjective as well as objective factors in a decision model that are conflicting in nature. This provides a decision support system (DSS) to project management for making the right decision at the right time for ensuring project success in line with organisation policy, project objectives and a competitive business environment. The whole methodology is explained through a case application of a cross-country petroleum pipeline project in India and its effectiveness in project management is demonstrated.

Whole life performance bid evaluation in the Korean public sector

Korea has increasingly adopted design-build for public construction projects in the last few years. There is a much greater awareness of the need to change a system based on ‘Value for Money’ which is high on the government's agenda. A whole life performance bid evaluation model is proposed to aid decision makers in the selection of a design-builder. This is based on the integration of a framework using an analytic hierarchy process as the bid awarding system is being changed from one based on lowest price, to one based on best value over the life-cycle. Key criteria like whole life cost, service life planning and design quality are important through the key stages of evaluation process. The model uses a systematic and holistic approach which enables a public sector to make better decisions in design-builder selection, which will deliver whole life benefits, based on long term cost-effectiveness and whole life.