• Industrial Engineering and Management Systems
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• v.9 no.2
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• pp.107-120
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• 2010

In today's uncertain economic environment, the evaluation of safety for investment alternatives is of practical importance in manufacturing companies. This paper examines a method of quantitatively evaluating profitability and risk for multiple alternatives using the total-cost unit-cost domain. The paper assumes such factors as unit sales price, sales and production volume, unit variable cost, fixed cost, and yield for each alternative. The paper incorporates the relationship between production capacity and demand, distinguishing between cases of production capacity surplus and shortage for each year over the entire planning horizon. The paper investigates the case in which the values of each factor independently move in the direction of decreasing profit each year, and clarifies the procedure of comparing safety among multiple investment alternatives on a single consolidated total-cost unit-cost domain. The difficulty of the problem lies in the method of consolidating multiple total-cost unit-cost domains into a single domain since the combination of years of capacity surplus and shortage depends upon the change values in each factor under consideration. A systematic method of evaluating profitability as well as risk is presented, and the validity of the proposed method is verified using a numerical example.

• Journal of the Korean Operations Research and Management Science Society
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• v.22 no.4
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• pp.93-113
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• 1997

In studying an EOQ-like inventory model for a manufacturing process, a number of findings were made. The system can "go out of control" resulting in a relatively minor problem state or "break-down". When the production system is in the minor problem statei produces a number of defective items. It is assumed that each defective piece requires rework cost and related operations. Once the machine breakdown takes place, the production system produces severely defective items that are completely unusable. Each completely unusuable item is immediately discarded and incurs handling cost, scrapped raw material cost and related operations. Two investment options in improving the production process are introduced : (1) reducing the probability of machine breakdown, breakdowns, and (2) simultaneously reducing the probability of machine breakdowns and setup costs. By assuming specific forms of investment cost function, the optimal investment policies are obtained explicitly. Finally, to better understand the model in this paper, the sensitivity of these solutions to changes in parameter values and numerical examples are provided.amples are provided.

• Proceedings of the KIEE Conference
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• 1993.07a
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• pp.36-38
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• 1993

This study considers the economic aspect of the distribution automation system, which is the decision-making criteria of the electric utilities for the investment. The feeder automation candidate region is divided into two types of the urban and the rural. The total investment cost of the feeder automation for each type is estimated. The annual cost, is also estimated, by finding the fixed charge rate. To compare the annual cost and the economic effect cost, for the investment decision-making, the costs are quantitatively estimated on the following effects : the manpower replacement, the outage cost saving, the main transformer utilization improvement, the feeder utilization improvement, and the line loss reduction.

• Journal of the Korean Institute of Gas
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• v.7 no.3 s.20
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• pp.1-6
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• 2003

This study has suggested a decision method which determine optimum investment level for safety management by process risk assessment at gas governor station. Hazard and operability study(HAZOP), fault tree analysis(FTA) and consequence analysis(CA) were carried out and potential accident cost and benefit for safety management were estimated. As a result, we could be found the trend of safety cost and benefit by the nonlinear regression method and could be determined the optimum investment level for safety management from analysis of safety management cost and potential accident cost.

• Journal of the Korean Institute of Illuminating and Electrical Installation Engineers
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• v.24 no.8
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• pp.1-7
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• 2010

The reliability of a power system has close relationship with the maintenance of the distribution systems. This paper presents the method of the maintenance planning of the distribution systems by minimizing the interruption cost. The interruption cost for the equipment failures is formulated using time varying failure rate and minimized by optimization of the object function. The proposed method provides the priority list for the investment of the maintenance subject to the limited investment budget by the economic analysis. In order to test the proposed method, the modified distribution system of a rural area is introduced for the testing system. Test results show that the proposed method is good enough by evaluating the improvement of the reliability of the power system.

• The Journal of Sustainable Design and Educational Environment Research
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• v.10 no.1
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• pp.10-25
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• 2011

Area Offices of Education in Korea assign and execute government budget based on the evaluation of school buildings' safety rating and degree of their deterioration. However, it is never easy to estimate the most appropriate investment amount for old buildings under consideration of their service lives and residual values together. A model of estimating optimum investment cost for obsolete school building is developed taking its life cycle cost into account. The model is also applied to six old buildings in five different schools and found that some of the facilities hardly needed further investment and were better to be rebuilt. The study results will be a great beneficial for officers to make right decision on maintaining obsolete school buildings and to maximize tax payers' money.

• The Journal of Fisheries Business Administration
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• v.39 no.1
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• pp.63-85
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• 2008

The objective of this study is to review the methodology of economic analysis of fishing ports by examining the economical feasibilities of a national fishing port (Jeongja Port) in Ulsan. This study utilized market value evaluation method to measure the benefits and costs related to the development of ports. The benefit variables are income effects resulting from the developments while the cost variables are sum of construction costs and maintenance costs. The income effects are measured in two ways: (1) income from individual project resulting from the developments, (2) the income effects by utilizing investment multipliers. The results shows that the BC ratio (Benefits/Costs) of Jeongja port by using (1) income from individual project resulting from the developments was 1.07 while the BC ratio by using (2) the income effects by utilizing investment multipliers was 1.10 due to a relative short period of useful life for investment multipliers. However, the income variable utilizing investment multipliers is more sensitive to the period of duration than the income variable from individual project.

• Journal of the Korean Operations Research and Management Science Society
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• v.34 no.3
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• pp.155-163
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• 2009

We develop a probability model to evaluate information security investment portfolios. We assume that organizations install portfolios of information security countermeasures to mitigate the damage such as loss of the transaction being processed, damage of hardware and data, etc. A queueing model and Its expected value analysis are used to derive the lost cost of transactions being processed, the replacement cost of hardwares, and the recovery cost of data. The net present value for each portfolio is derived and organizations can select the optimal information security investment portfolio by comparing portfolios.

• Korean Journal of Agricultural Science
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• v.44 no.3
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• pp.424-439
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• 2017

This study was undertaken to examine the profit efficiency and its determining factors, the investment opportunity, and the challenges of shea butter producers in the northern region of Ghana. The methods employed in this research were the Stochastic Profit Frontier (SPF) model, gain-cost and investment return analyses, as well as Kendall's W statistic using primary data collected from 120 purposively-selected respondents. Results from the analysis indicated that profit efficiency was positively influenced by sex, household size, marital status, educational level, transportation cost, store rent, and price of shea nut with a gain in profit efficiency of 58.5%. The investment analysis demonstrated a net gain per person of $8,077 equivalent to GH₵ 28,270 Ghanaian cedi (GH₵) using 2016 exchange rate (GH₵ 3.5 = $1). Among the challenges identified, the poor quality of shea nuts was the most prioritised challenge with 72.8% agreement among the respondents. Based on these findings, it was recommended that proper training and education, as well as improvement in shea nut quality, should be promoted to improve the profit efficiency of shea butter producers.

• Journal of Information Technology Applications and Management
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• v.15 no.3
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• pp.195-208
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• 2008

In an emergency management case, evaluating the economic value of information technology investments is a challenging problem due to the effects of decision making, uncertainty of disasters, and difficulty of measurements. Risk assessment and recovery process, one of the major functions in emergency management, consists of (1) measurement of damages or losses, (2) recovery planning, (3) reporting and approving budgets, (4) auctioning off recovery projects to constructors, and (5) construction for the recovery. Specifically and of our interest, measurement of damages or losses is often a costly and time-consuming process because the wide range of field surveys should be performed by a limited pool of trained agents. Managers, therefore, have to balance accuracy of the field survey against the total time to complete the survey. Using information technologies to support field survey and reporting has great potential to reduce errors and lowers the cost of the process. However, existing cost benefit analysis framework may be problematic to evaluate and justify the IT investment because the cost benefit analysis often include the long-run benefit of IT that is difficult to quantify and overlook the impact of managerial control upon the investment outcomes. Therefore, we present an alternative cost-centric control model that conservatively quantifies all cost savings to replace benefits in cost benefit analysis and incorporate the managerial control. The model provides a framework to examine how managerial decision making and uncertainty of disaster affect the economic value of IT investments. The current project in Emergency Agency in South Korea is introduced as a case to apply the cost-centric control model. Our work helps managers to better evaluate and justify IT-related investment alternatives in emergency management.