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© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
COSIMA-ROAD
- Modelling Decision Support and Uncertainty using @RISK
© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
2
About me
Ph.d. Student, M.Sc. from the Technical University of Denmark – finishes in 2008
Half way through my Ph.d. study entitled: Optimization of Decision Support concerning Large Scale
Infrastructure Projects
2nd phase concerns risk analysis and sensitivity analysis upon uncertain variables and parameters
Implemeting @RISK as part of an overall software package for appraisal in the Danish Road Sector
Partly financed by a Danish Centre for Logistics and Freight Transport – CLG
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© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
3
Outline of Presentation
Why do we need a model for appraising road infrastructure projects? – A Danish Manual for Appraisal Studies
Brief overview of the modelling structure of COSIMA-ROAD
Presentation of Case Example
The Deterministic Calculation Cost-Benefit Analysis
Single value point of return
The Stochastic Calculation Risk Analysis
Interval point of return in terms of probability distributions
Conclusion & Perspective
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© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
4
The Socio-Economic Analysis
Prioritising between the different project proposals is necessary
Decision-makers has to choose the optimal combination of investments in a long-term planning perspective
Decision between several project alternatives
Decision of the actual design of the given/chosen projects
Assessment of each projects socio-economic rentability
….it is of course easier to achive political accept of a project if the socio-economic rate of return is high – but it may not lead to implementation. (The Danish Ministry of Transport, 2003)
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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The Danish Manual
The Danish Ministry of Transport and Energy has conduc-ted CBA for a long time, however, it has been unsystematic
A tool for socio-economic analysis
Acceptance of methodology by transparency
Systematic method of determining various impact
Narrowing possible solution to a few alternatives
A practical toolbox for the analysts performing the socio-economic analysis
Identical measures and procedures for evaluating transport projects
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Danish Manual (1) [1] Definition of Problem/description of idea
[2] Relevant alternatives/aktivities is chosen for further evaluation
[3] Relevant impacts are assessed and implemented
[4] The construction/investment cost, period and start is determined
[5] The basis alternative is stated/calculated on basis of [3] & [4]
[6] The in [2] chosen alternatives is arranged/set up for further use
[7] The unit price settings is found and discounted to the correct year of
evaluation
[8] ”What if” Scenarios is defined:- Operation proposals towards rail
projects are stated- Various Traffic and Impact models is
performed- First year impacts are quantified
Socio economic impacts is evaluated
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Danish Manual (2)
[9] Evaluation parameters are determined such as forecast factors (f), BNP/Growth in economy (g), discount rate (d), Scenario factors (S & s) etc.
[10] Evaluation criteria: NPV, B/C-rate, IRR etc. is calculated
[11] Sensitivity Analysis or Risk Analysis is performed on chosen First
Year Impacts
[12] Non quantifiable (MCA) impacts are determined on basis of stakeholder
preferences
[13] Final results are illustrated schematically
[14] Presentation of the final results
[15] Follow-up and after calculation
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Evaluation Criteria
B/C-rate
Net Present Value
k
tt
tk
tt
tk
ttt
r
C
r
B
r
CBNPV
000 111
Development of costs and benefits over the years
Time
k
tt
t
k
tt
t
r
Cr
B
CB
0
0
1
1/
The ratio indicates the present value of the benefits that will result per present value invested.
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Technical University of DenmarkCentre for Traffic and Transport - CTT
9
Case example – The Alleroed Case
Alleroed23.000 Inhabitants
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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The Case
The main goal is to find a Ring Road that can connect the New Residential Area to the main Road Network
The second goal is to relieve the town centre of Alleroed for through traffic and congestion
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Basic & Alternative Scenarios
To perform any sort of appraisal study you need a basic scenarioDo-Nothing Scenario BUTBUT with the new generated traffic etc.
In the Alleroed Case - 4 different Alternative Scenarios are suggestedComparison of these scenarios are the main objective for
implementing COSIMA-ROADCOSIMA-ROAD
It is, however, important to remember that a good socio-economic performance does not necessarily lead to implementationDecision Support System - DSSDSS
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© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
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Basic Scenario
The Do-Nothing Scenario Traffic is supposed to arrive at the
new residential area as always Problems in the future with
congestions Capacity Pollution Noise …. COST = 0 Billion DKK
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Alternative 1
An upgrade of the existing road network and a 1 km extension
The cheapest sollution Problems in the future with
congestion Noise, emission etc. is still
influencing the residential areas around the existing road
COST = 19.2 Billion DKK
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Technical University of DenmarkCentre for Traffic and Transport - CTT
14
Alternative 2 & 3
Both alternatives are bypass- and new constructed roads
Externalities are moved away from residential areas
COST Alternative 2 = 54.9 Bill. DKK
COST Alternative 3 = 48.6 Bill. DKK
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Alternative 4
A large scale upgrade of the entire road network in the Alleroed Region
The most expensive Creates a substantial time benefit
for travellers in the region Removes externalities from all of
the residential areas Adapted for future requirements COST = 194.5 Billion DKK
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Implementation in COSIMA-ROAD
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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COSIMA-ROAD
COSIMA - COmpoSIte Model for AssessmentDeterministic calculation(point estimate)CBA-Module
Input data(Data entry)
Taxation(Calculation of the various time
and km. dependent taxation rules)
Impact Calculation(Entry of unit price settings & calculation of trip purposes)
Prognosis/Forecast(Forecast situation applied for the
First Year Impacts)
Prognosis/Forecast 2(Forecast situation applied for the
Unit Prices)
Base Calculation(Overview of all impact calculations with the implied evaluation criteria)
Results – expanded(Resultsheet containing all first
year impacts)
Results – overview(Containing the most important
results with criteria)
Front Sheet / ”Quick and Dirty”(Entry of data) Stochastic calculation (interval estimate)
Risk Analysis Module
Probability Distributions(Definition of the various uncertain
impacts)
Results – Uncertainty(Resulting Probability Distribution
of the B/C-rate)
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Technical University of DenmarkCentre for Traffic and Transport - CTT
18
Entry Data Sheet – COSIMA-ROAD
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Technical University of DenmarkCentre for Traffic and Transport - CTT
19
Main Data Input
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Forecast sheet - Impacts
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Key Figures
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Technical University of DenmarkCentre for Traffic and Transport - CTT
22
Trip Purposes
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Technical University of DenmarkCentre for Traffic and Transport - CTT
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Results - Overview
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Technical University of DenmarkCentre for Traffic and Transport - CTT
24
Results of all 4 alternatives
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B/C-ratio
0
0,5
1
1,5
2
2,5
Alternativ 1 Alternativ 2 Alternativ 3 Alternativ 4
B/C
-rat
ios
B/C-ratio
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Technical University of DenmarkCentre for Traffic and Transport - CTT
25
Results of all 4 alternatives
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Net Values in mio kr.
-200
-100
0
100
200
300
400
Alternativ 1 Alternativ 2 Alternativ 3 Alternativ 4Net
Val
ue
in m
io D
KK
Total Benefits
Total Costs
NPV
© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
26
Risk Analysis
COSIMA-ROAD is designed to give a deterministic single value result, in this case as a benefit/cost ratio
However, several uncertainties are involved when interpreting models
The basis of Risk Analysis is then to give the decision-makers the ability to consider a ”complete set of possible future outcomes”
Assigning probability distributions on the uncertain first year effects – NOT Unit prices
Outcome is Interval results in terms of probability distributions
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Technical University of DenmarkCentre for Traffic and Transport - CTT
27
Stochastic calculation – Risk Analysis module
Applying @RISK as add-on to Excel The different levels of knowledge is divided into 3 groups
where the actual distribution parameters are assessed:The relative level of knowledge
High level of knowledge:Normal distribution
High level of knowledge:Erlang distribution
Medium level of knowledge:Triangular distribution
Low level of knowledge:Uniform distribution
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Technical University of DenmarkCentre for Traffic and Transport - CTT
28
Risk Analysis Sheet in COSIMA-ROAD
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Technical University of DenmarkCentre for Traffic and Transport - CTT
29
Distribution of the Construction Cost
It has been found suitable to use an Erlang Distribution with a Scale parameter k = 5.
The Shape parameter is found by the following relationship:
The mean is calculated by the so-called Lichtenberg’s Principle:
This type of distributions is reasonable as the Construction Cost most often is exceed
k
9.4
.max9.2.min
ML
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30
Distribution of the Travel Time Savings
Recent Master Thesis from DTU has shown that a std. deviation between 10% - 20% is a reasonable error corresponding to the Traffic Models
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31
Distribution of Maintenance Cost
It has been found that a 10% lower bound and 50% higher bound is reasonable
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Distribution of The Safety Effect (number of Accidents)
This impact is found by impact models. These models, like the traffic models have embedded errors – a study has shown that these vary quiet extensively (+/- 10% in our case)Start End
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Risk Analysis Sheet with applied distributions
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Results of the Risk Analysis
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Technical University of DenmarkCentre for Traffic and Transport - CTT
35
Results of the Risk Analysis
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36
Results all four alternatives
The Alleroed Case: All four Scenarios
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
0,1 0,3 0,5 0,7 1,0 1,3 1,6 2,0 2,4 2,9
Total rate based on discounted benefits and costs
Pro
ba
bili
ty t
ha
t to
tal r
ate
will
be
eq
ua
lled
or
exc
ee
de
d Alt. 4
Alt. 2
Alt. 3
Alt. 1
Start End
© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
37
Conclusion & Perspective
The COSIMA-ROAD Evaluation System has been used in real case studies in the Danish Road Directorate
The model has proven highly applicable within transport infrastructure planning – at the moment it is used in a large-scale study in Greenland
To address some of the uncertainties embedded in the model result a Monte-Carlo simulation is conducted making use of various probability distributions
The various probability distributions applied within the COSIMA-ROAD model is to be revised and further investigated
Especially, the two main impacts; Construction Costs and Travel Time Savings are to be further investigated
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Technical University of DenmarkCentre for Traffic and Transport - CTT
38
PhD Student, M.Sc. in Engineering
Kim Bang Salling
Technical University of Denmark
Centre for Traffic and Transport
Decision Modelling Group
Phone: +45 4525 1548
Email: [email protected]
www.ctt.dtu.dk
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Technical University of DenmarkCentre for Traffic and Transport - CTT
39
”The Monster Sheet” – Basic calculations
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Technical University of DenmarkCentre for Traffic and Transport - CTT
40
”The Monster Sheet” – Basic calculations
Start End
© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
41
”The Monster Sheet” – Basic calculations
Start End
© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
42
”The Monster Sheet” – Basic calculations
Start End
© Copyright DTU-CTT 2006
Technical University of DenmarkCentre for Traffic and Transport - CTT
43
”The Monster Sheet” – Basic calculations
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