Transcript MOD10 Prioritization..

PRIORITIZATION
Instructional Objectives
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Describe the objectives of a multi-year
prioritization analysis
Understand the differences between
other multi-year analysis techniques
Describe the components of a multi-year
prioritization analysis
Understand the use of a multi-year
prioritization analysis as part of an
agency’s project selection process
PMS
Economics
CONCEPTS AND THEORIES
Analyses
Sophistication
Increasing
Level of
Sophistication
Optimization
Prioritization
Ranking
ANALYSES
ECONOMIC ANALYSES
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RANKING - SINGLE YEAR COST SUMMARY
MULTI-YEAR PRIORITIZATIONS
OPTIMIZATION
LIFE CYCLE COST ANALYSIS
P&E, CONST, ANNUAL MAINT, REHAB, SALVAGE
NET PRESENT WORTH OR EQUIVALENT UNIFORM
ANNUAL COSTS
DISCOUNT RATE = INTEREST - INFLATION RATE
ECONOMIC ANALYSES
Ranking - SINGLE YEAR COST SUMMARY
pavements are ranked in accordance with the ranking guidelines
until the amount of money available for maintenance and
rehabilitation projects is used up.
•Easiest to Understand
•Based on a single year’s needs
•Determines a single year’s budget
•Repeated each year
Ranked by:
•Condition
•Initial Cost
•Cost and Timing
•Life Cycle Cost
•Benefit/Cost Ratio
Ranking
Current
Condition
Identify Pavement Needs
Select Treatment and
Estimated Cost from Rules
Match Ranked List
to Budget
Apply Rank by
Criteria and Sort
Ranking Example
Section
67A
Condition
$ Cost
Level
Treatment (millions)
67
Minor
1
67B
82
PM
0.5
67C
52
Major
3
14A
71
Minor
2
14B
74
Minor
1.5
17
85
PM
0.5
Results for $7 Million Budget
Section ID
Sort
by
Ranking
67C
Sort
Treatment
1
Condition
Level
52
Major
Cost
($millions)
3
67A
2
67
Minor
1
14A
3
71
Minor
2
14B
4
74
Minor
1.5
67B
5
82
Prev. Maint.
0.5
Univ1
6
85
Prev. Maint.
0.5
Limitations To Ranking
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Long-term impacts on network are not
considered
Rate of deterioration is not considered
Economic analysis for alternative
strategies not considered
ECONOMIC ANALYSES
Multi-Year Prioritization (MYP)
A method of allocating limited resources in an
efficient and cost-effective way over a multiyear period (2-10 year’s needs), through an
evaluation of long-term impacts.
A PMS process or tool used to objectively
identify the best combination of treatments and
projects over a multi-year program.
MYP Analysis Requirements
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Condition/ inventory information
Performance models
Treatment types, triggers, resets, costs,
strategies/ conditions
Analysis tools
ECONOMIC ANALYSES
Multi-Year Prioritization (MYP)
Prioritization techniques use mathematical modeling tools to
achieve the best combination of projects over the specified
analysis period:
•Pavement performance Models predict future condition and
suggest timing of needed rehab
•Projects are identified with need for Pavement Preservation,
Minor Rehab, Major Rehab or Reconstruction
•The most effective timing for the applying the appropriate
treatment are identified
•The predicted impact on the network over time for each
combination of projects over a given analysis period.
Multi-Year Prioritization (MYP)
Current or
Predicted Condition
Select
Treatment and Timing
for Each Segment
Estimate Costs
Match Prioritized
List to Budget
Conduct
Analysis
Benefit/Effectiveness Calculation
Pavement Condition Index
Existing Pavement Performance
Apply Treatment
Benefit
Predicted Pavement
Performance
Trigger Limit
Age or Traffic Loads
ECONOMIC ANALYSES
Benefits Provided By MYP
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Forecast future conditions
Analyze treatment timing options
Evaluate effectiveness of alternative strategy
Perform economic analyses
Use of objective measures for prioritizing needs
Project future budgets
Predict the impact of each combination of
treatments and projects on the network over the
given analysis period
Projects that provide the greatest benefit to the
agency will have a higher priority in the program
development process.
Effect of Treatment Timing on Costs
Typical Variation of Pavement Condition as a
Function of Time
You never have enough fish!
ECONOMIC ANALYSES
Decision Benefits Provided By MYP
Provide answers for the questions:
1. What Average Network condition will be reached for
a given level of funding?
2. What budget is needed to reach or maintained a
given level of condition?
Example Network Performance
Illustrates Policy Decisions
What are the average projected condition for the given Budget Levels?
Budget Scenarios
Condition
Economic Analysis
100
90
80
70
60
50
40
30
20
10
0
Do Nothing $0
$100,000
$300,000
0
1
2
3
4
5
Age
6
7
8
9
10
Example Network Performance
Illustrates Policy Decisions
What will it cost to maintain the current Condition Level?
Cost
Cost to Maintain
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
2000
Budget Scenarios
2001
2002
2003
2004
2005
Year
2006
2007
2008
2009
2010
Pavement Preservation Strategies and Treatments
 Decision trees, featuring a series of branches that
are selected based on overall condition, types of
distress present, functional classifications, or other
factors. Each branch eventually leads to the preferred
treatment or family for a given set of conditions.
 Matrices, featuring tables that describe certain
characteristics and the allowable ranges for particular
levels of rehabilitation. The matrix may identify the
preferred treatment or list a series of feasible
alternatives that are considered further in terms of
their effectiveness.
Rules, including a set of rules (equations) that specify
particular treatments for certain conditions.
Considerations in Developing
Decision Trees/ Matrices
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Decision factors
Availability of data
Ability to predict conditions
Flexibility
Considerations in Developing
Decision Trees/ Matrices
Decision trees lead to one or two
possible treatments, although other
treatments may be viable alternatives.
Consideration is not given to the
effectiveness of one treatment over
another or the benefit of one treatment
over another.
Treatment Selection
Decision Trees
Treatment
Family
Pavement
Condition Index
>4
Asphalt
Pavement
Condition
= 4 or below
Present
Preventive
Maintenance
Structural
Overlay
Load-Associated
Structural Deterioration
Not Present
Functional
Overlay
Treatment Selection
Treatment Selection
Decision Matrix
Surface
Type
Asphalt
Concrete
Asphalt
Concrete
Asphalt
Concrete
Condition
Level
Structural
Deterioration
70-100
N/A
0-69
Not Present
0-69
Present
Treatment
Type
Preventive
Maintenance
Functional
Overlay
Structural
Overlay
Programmed Rules
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Outline criteria for selection of preferred
treatment
Set treatment for condition range
Could be transferred into decision
matrices or decision trees
Programmed Rules
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(Pavement_Type = 'BC' or = 'CO')
and
( (PCI >= 50 And PCI <= 70
And
OCI >= 60) or
(Skid_Value <= Skid_Trigger)
or
(Avg_Rut>= 0.5 And Avg_Rut <= 1.0))
and OCI >= 55
Treatment Selection based on complex rules
Requirements for Developing a
Treatment Strategy
A pavement strategy is a plan of action
comprised of the application of one or
more maintenance or rehabilitation
treatments designed to improve or
maintain the condition of a pavement
segment above some predetermined
minimum requirement.
Requirements for Developing a Strategy
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List of strategy guidelines and
treatment options
Treatment Costs
Pavement performance models for
treatment
Options in Strategy Development
Single Treatment Strategy
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Most common approach
Several feasible alternatives may be identified for each section
Each treatment considered independently
Most cost-effective treatment generally selected
Multiple Treatment Strategy
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Combination of treatments considered for each section
Effectiveness of all treatments is representative of effectiveness of entire
strategy
Subsequent treatments affect selection of strategy
Repeated treatments
Specific Treatments
•Preventive Maintenance
•Rehabilitation/Resurfacing
•Reconstruction
}Simple grouping
Detailed Choices
Asphalt
Routine Maintenance
Surface Seal Coats
Milling and Inlays
Thin Overlay
Thick Overlay
Mill and Overlay
Reconstruction
Concrete
Slab Grinding
Full- and Partial-Depth
Repairs
Crack and Seat
Thin-Bonded Overlay
Unbonded Overlay
Slab Replacement
Reconstruction
Pavement Condition Index
Treatment Options in MYP
Performance Prediction Model
Benefit or Effectiveness
Treatment
Reset
(Area under the curve)
Predicted
Performance
Condition
Increase
Trigger Limit
Life
Extension
Marginal Cost Effectiveness
Incremental Benefit/Cost Ratio
Age or Traffic Loads
Performance Models
Current Time
100
Condition
Index
80
Treatment
Condition
reset
Benefit=area x traffic level
Trigger
Zero Treatment
Associated Cost
adjusted for inflation
Condition reset
PM
Time or Age
Life Extension
Performance Models
Current Time
100
Condition
Index
80
Treatment
Condition
reset
Trigger
Benefit=area x traffic level
For PM treatment that do not improve
condition just extend life
Zero Treatment
Associated Cost
adjusted for inflation
Condition reset
PM
Time or Age
Life Extension
Pavement Condition Index
Treatment Options in MYP
Existing Performance
Treatment Strategy 1
in Years X and Z
at $ Cost
Subsequent
Treatment
Trigger Point for
Treatment 1
Treatment Strategy 2 in
Year Y at $S Cost
Trigger Point for
Treatment 2
Age or Traffic Loads
Prioritization Analysis Techniques
Marginal cost-effectiveness analysis
 Incremental benefit/cost analysis
Ratio calculation
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– positive ratio= viable strategy
– negative ratio= costly strategy
Benefits or Effectiveness
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Effectiveness
– Non-Monetary
– Area under the curve for some
traffic value
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Benefits
– Monetary or Non-Monetary
– Area under the curve for some traffic value
Costs
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Agency cost
User cost
Salvage value
Maintenance cost
Other relevant costs over the life of the
pavement
Marginal Cost-Effectiveness (MCE)
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Identify feasible treatments for each
analysis period based on projected
condition and established trigger levels
Calculate effectiveness (E) of each
combination of strategies (area traffic)
Calculate cost (C) of each combination
in net present value terms
Marginal Cost-Effectiveness (cont.)
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Calculate cost-effectiveness (CE) of
each combination as ratio of E/C, where
highest value is best
Select treatment and timing for each
section with best CE
Calculate marginal cost-effectiveness
(MCE) of all other strategies as follows:
MCE = (Er-Es)/(Cr-Cs)
Marginal Cost-Effectiveness
Calculations
The following steps are completed in the marginal cost-effectiveness
analysis:
1. Identify the feasible treatments for each analysis period based on the
projected condition and established trigger levels;
2. Calculate the effectiveness (E) of each combination of strategies
(effectiveness is generally the area under the performance curve
multiplied by some function of traffic);
3. Calculate the cost (C) of each combination in net present value terms.
4. Calculate the cost-effectiveness (CE) of each combination as the ratio of
E/C, where the highest value is the best.
5. Select the treatment alternative and time for each section with the best
CE.
Marginal Cost-Effectiveness
Calculations
6. Calculate the marginal cost-effectiveness (MCE) of all other strategies for
all sections as follows:
MCE = (Er - Es)/(Cr - Cs)
where:
Es = effectiveness of the strategy selected in step 5
Er = effectiveness of the strategy for comparison
Cs = cost of the strategy selected in step 5
Cr = cost of the strategy for comparison
If the MCE is negative, or if Er is less than Es, the comparative strategy is
eliminated from further consideration; if not, it replaces the strategy
selected in 5.
This process is repeated until no further selections can be made in any year
of the analysis period.
Incremental Benefit/Cost (IBC)
The seven dots on the following graph each represent the
costs and benefits associated with seven strategies; a donothing and six repair strategies labeled 1 through 6.
Each line segment was drawn by starting at the do-nothing
point and drawing the segments in such a way that no
strategy points exist above the line, and no line segment has
a bigger slope than the previous line segment. This
segmented line is called the ‘efficiency frontier’
Incremental Benefit/Cost (IBC)
Efficiency Frontier
Strategy 6
EFFICIENCY FRONTIER
BENEFIT
S
Strategy 4
Strategy 3
Strategy 2
Strategy 1
Strategy 5
IBC
DoNothing
COST
from Deight on Associates Ltd.
Incremental Benefit/Cost (IBC)
Equivalent Uniform Annual Benefit (EUAB)
EUAB = PVB [r (1+r)n]
[(1+r)n - 1]
Equivalent Uniform Annual Cost (EUAC)
EUAC = PVC [r (1+r)n ]
[(1+r)n - 1]
where:
PVC = Present Value Cost
PVB = Present Value Benefit
r = Discount Rate
n = Number of Years
Incremental Benefit/Cost (IBC)
Calculate Incremental Benefit/Cost
IBC j = (EUABj - EUABj-1)
(EUACj - EUACj-1)
•Treatment for each section are sorted by increasing EUAC
•Negative IBC’s are eliminated
•Strategies which fall on the efficiency frontier provide the
most benefit per unit cost for the agency
•Selects the best strategy for each road section to
maximize benefits without exceeding budget levels
Incremental Benefit/Cost (IBC)