Environmental Contamination A Manufacturing Facility Has Been Used As A Disposal Sit 3089400

Environmental Contamination A manufacturing facility has been used as a disposal site for hazardous chemicals in 55-gallon drums. Thousands of drums of waste are assumed to be buried at the plant, but the exact number is unknown. The company has decided to remediate the site, but management is not sure whether they should build an on-site incinerator or contract with a waste management disposal firm located 10-miles away. Since the cost of either alternative is dependent on many factors, this problem was forwarded to your analysis team to provide guidance. Figure 1 shows the influence diagram for the decision. And Table 1 contains the cost estimates provided by the company accounting and finance teams.
There are two alternatives: Build Contract for services. They should be compared based upon the costs
listed under each alternative. The totals to be compared should be entered in the shaded boxes (they
are the sum of the underlying costs listed below each shaded box).
Drum removal costs = # Drums x Excavation cost per drum
Ground remediation costs = Remediation SqYd x Ground remediation costs per SqYd

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INDE 583, Decision Analysis STUDENT NAMES:____________________________________ Build Incinerator or Contract for Services Environmental Contamination A manufacturing facility has been used as a disposal site for hazardous chemicals in 55-gallon drums. Thousands of drums of waste are assumed to be buried at the plant, but the exact number is unknown. The company has decided to remediate the site, but management is not sure whether they should build an on-site incinerator or contract with a waste management disposal firm located 10-miles away. Since the cost of either alternative is dependent on many factors, this problem was forwarded to your analysis team to provide guidance. Figure 1 shows the influence diagram for the decision. And Table 1 contains the cost estimates provided by the company accounting and finance teams. FIGURE 1: Waste disposal influence diagram. Incinerator Operating Incinerator InstallationCostsIncinerator EquipmentEMV of Incinerator CostsCostBuild Incinerator or Contract for Number of Drums Remediation CostsServicesGround RemediationCost per DrumRemediation AreaExcavation/Removal TABLE 1: Data from company finance and accounting teams. Variable Units Low Base High Incinerator Equipment Millions of $ 2 4 5 Installation Millions of $ 3 4 6 Operating Costs Millions of $ 2 6 8 Remediation Cost per drum =100,000 Dollars/Drum 40 =600,000 Dollars/Drum 25 =1,500,000 Dollars/Drum 15 Number of drums Thousands 100 400 1,200 Excavation/removal cost Dollars/Drum 5 10 15 2Remediation area Yards 4,500 14,500 29,000 2Remediation area cost $/yard 2 4 8INDE 583, Decision Analysis STUDENT NAMES:_________________________________ There are two alternatives: Build Contract for services. They should be compared based upon the costs listed under each alternative. The totals to be compared should be entered in the shaded boxes (they are the sum of the underlying costs listed below each…

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