Browsing by Subject "Asset valuation"
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Item A methodological framework for cross-asset resource allocations to support infrastructure management(2016-08) Porras-Alvarado, Juan Diego; Zhang, Zhanmin, 1962-; Machemehl, Randy; Walton, Michael; Bhasin, Amit; Gao, LuResource allocation mechanisms have become a major issue for transportation agencies in the United States and around the world. For this reason, transportation agencies are exploring alternatives to modify traditional allocation mechanism due to budgetary challenges generated by the decrease in funding and the increasing cost of preserving and operating transportation systems. Transportation asset management (TAM) practices enable agencies to change the operation and management of transportation infrastructure from the traditional concept of “public-owned” systems to more business-oriented processes. One of the main concerns with the TAM framework and its implementation is the absence of an organized process for cross-asset resource allocations. Additionally, most of the alternative methods for funding allocations focus on maximizing infrastructure performance under budget constraints, but ignore the consideration of equity or fairness. The objective of this study is to develop an innovative methodological framework for cross-asset resource allocations, yielding a data-oriented approach to enhancing infrastructure management. The allocation module is comprised of three resource allocation mechanisms following a top-down approach: a fair division approach based on asset performance, a performance-based multi-objective optimization, and an asset value-based multi-objective optimization. In the first mechanism, the fair division method is used to allocate resources in such a way that all parties involved believe they are receiving a fair share of the available resource based on established utility functions. Then, Collective Utility Functions (CUFs) are employed to perform the resource allocation, which results in total utility and total envy values. These values are used to conduct trade-off analyses of the different allocations based on the CUFs. Under the second procedure, a multi-objective optimization formulation is employed to integrate efficiency and equity, where equity is taken into consideration by using utility and envy concepts, while efficiency is incorporated by maximizing performance. In the third mechanism, an innovative asset value methodology is integrated into the cross-asset resource allocation process, serving as a common comparative measure between assets. To demonstrate the applicability of the proposed methodological framework, a case study was conducted using two asset groups, pavements and bridges, from the roadway network of the Austin District located in Texas. Results from the case study shows that the proposed methodological framework has great potential as a tool to support highway agencies in performing cross-asset resource allocations at the network level.Item A methodological framework for the valuation of transportation infrastructure(2013-12) Peters, Diniece Danielle; Zhang, Zhanmin, 1962-Transportation infrastructure, a vital component to sustain economic prosperity, represents the largest public-owned infrastructure asset in the U.S. With over a trillion invested dollars invested into long-lived physical assets such as roads and bridges, transportation agencies are tasked with maintenance and rehabilitation efforts to ensure that the access to transportation facilities is readily available and that the infrastructure is properly preserved. The management of these assets and the determination of their value, however, have been at the forefront of discussions in many state agencies and local governments. As a consequence, asset valuation has become a key component in asset management because it links the performance of infrastructure and deterioration process with the value of the infrastructure and its depreciation, providing critical information for decision makers at various levels to make more informed decisions. A utility-based methodological framework for the valuation of transportation infrastructure is presented along with a case study to demonstrate its applicability. A general framework is presented with emphasis on the valuation of pavement infrastructure. The results from the framework is then compared to existing valuation methods in addition to a series of sensitivity analysis on the variation of performance measures and their effect on the value of an asset. The development of this valuation approach serves as a starting point for assessing, in addition to the physical condition of an asset, the operational measures that can often make an asset less useful to its customers and managing agency. Utility theory can be utilized to combine the effect of performance indicators of varying measures and scales on the value of an asset. The proposed framework can assist state and local transportation agencies in the optimization of resource allocation procedures for better coordination of asset investments, facilitating benefit-cost analyses to quantify the impact of infrastructure investments. This tool allows agencies to detect deficiencies if any, in the management of its assets, providing a feedback mechanism that can foster an introspective review of its current management practices that may need further refinement or possibly elimination.Item Overpriced mergers and acquisitions in the chemical industry(2009-12) Momin, Farid L.; Lewis, Kyle, 1961-; Duvic, Robert Conrad, 1947-Mergers and acquisitions within the chemical industry is a common practice to increase market presence and customer base. Common justifications for M&A include synergy, business growth and competitive advantages, and management reasoning. Synergies are benefits a combined firm is able to receive through cost reductions, market expansion, and efficiencies in processes. As a result, firms are able to grow and position themselves competitively. To prevent an overpriced acquisition, numerous valuation techniques exist. The discount cash flow examines the value of a firm based on future cash flow. The market multiple compares target firms to similar firms in the industry. Lastly, the asset valuation determines the value of a firm based on the liquidation of the firm. To maximize the return on an acquisition, proper due diligence should be conducted based on the needs and goals of the purchaser, and the value added by the target firm. The premium paid for an acquisition should be based on the valued added through the synergies identified. Current business cycles and future outlook should also factor into the pricing of the acquisition. Having a thorough analysis of a target firm can help the acquirer to clearly understand what is being purchased and hence, determine an appropriate price for the acquisition.