W2_AlShehhi_Boat Project

1. Problem Definition.

One of many small/medium projects my company carrying out, in order to prepare to the operation phase of the gas plant, is a “boat project”, for which a boat to be facilitated in order to use it in maintenance activities of the single point mooring (SPM).

More than one option has  been considered and each has its own cost, health & safety, operability and social impact. Which one would be a better option?

2. Identify the Feasible Alternative.

The following are the two alternatives;

  1. Outsource the project to SME entrepreneur
  2. In-house the project

Multi attribute decision making with compensatory models will be used.

 3. Development of the Outcome for Alternative

Qualitative comparative analysis of the alternatives will examine their potential impact on the previously mentioned attributes.

Below is the comparison for alternatives:

Parameter

Outsourced

In-housed

Operability Risk

If out sourced, SME could be using on irrelevant activities, and that will impose high operability risk. The boat will also be parked 25 km away from the SPM, which a source of delay in case of an emergency.

Boat parked 3 km away from SPM which implies far less operability risk.

Health & Safety

Improperly trained boat operators leading to higher likelihood of incidents occurrence.

Properly trained boat operators leading to lower probability of incidents occurrence.

Social

Very good social impact since project will out bided to the local community

Relatively more negative social impact.

Cost

– Fixed monthly payment to contractor           – Fuel cost

– Boat capital cost                                                                   – Operating Cost (fuel, regular maintenance, operator salary, operator benefits like training health insurance and social insurance.                                                                                 – Man hours cost (considered long lead item)

Table1: Alternatives and correspondent attributes

Parameter

Outsourced

In-housed

Operability Risk

1

3

Health & Safety

2

3

Social

3

1

Cost

3

2

Note: Score (1 to 3), where 1 is most difficult, risky, expensive and 5 least difficult, risky or expensive.

 

 

Table2: Weight estimate of each attribute relative to the option

After setting the alternatives, attributes and relative weight, Table 1&2 above, dimensionless value is calculated and presented in Table 3.

Attribute

 

Outsourced

Inhoused

Operability Risk

Value

1.0

3.0

Dimensionless value

1.0

0.0

Health & Safety

Value

2.0

3.0

Dimensionless value

0.5

0.0

Social

Value

3.0

1.0

Dimensionless value

0.0

1.0

Cost

Value

3.0

2.0

Dimensionless value

0.0

0.5

T able3: Dimensionless value correspondent to each alternative and its attributes

Table 4 below shows weights of attribute. These will be used in section 5.

Attribute

Ranking

Weight

Operability Risk

1.0

0.1

Health & Safety

3.0

0.3

Social

4.0

0.4

Cost

2.0

0.2

Total

10.0

1.0

 4. Selection of the Acceptable Criteria.

Highest dimensionless value is the selection criteria.

5. Analysis and Comparison of the Alternative.

Attribute

Weight

Outsourced

Inhoused

Dim Value

Weigh Value

Dim Value

Weight Value

Operability Risk

0.1

1.0

0.1

0.0

0.0

Health & Safety

0.3

0.5

0.2

0.0

0.0

Social

0.4

0.0

0.0

1.0

0.4

Cost

0.2

0.0

0.0

0.5

0.1

Total

1

 

0.25

 

0.5

Table5 above shows comparison and analysis of the two alternatives.

6. Selection of the Preferred Alternative.

It is obvious that the “boat project” to be done in-house.

7. Performance Monitoring and the Post Evaluation of Result.

After this initial result, a more detailed cost estimate can be done, like NPV, in order to make sure it is the better option.

8. References:

  1. Making Decisions with Multiple Attributes: A case in sustainability Planning, Retrieved June 9, 2014, from http://gbr.pepperdine.edu/2012/08/making-decisions-with-multiple-attributes-a-case-in-sustainability-planning/

 

  1. A Set of Tools for Multi-Attribute Decision Making, Retrived on June 9, 2014, from http://www.students.iitmandi.ac.in/~deepak_sharma/maked/tutorial.html

 

  1. Sullivan, G. W., Wicks, M. E., &Koelling, C. P.(2012). Engineering economy 15th Edition. Chapter 14 – Decision Making Considering Multiattributes., pp.551-569.

 

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