Cost/Benefit And Risk Assessment Procedure for the Product Evaluation Program.Volume 1. Product Evaluation Model. Final Report

摘要

The Product Evaluation Model (PEM) is designed to enable the Product ResourceInvestment Deployment and Evaluation program (PRIDE) of the Arizona Department of Transportation (ADOT) to determine the likelihood that a new product is a worthwhile investment from an economic point of view, namely that its benefits outweigh its costs. The model defines characteristics, (or 'attributes'), associated with products, utilizes their appropriate units of measure (metrics) and translates these product characteristics into the estimated costs and benefits that occur over a user-defined analysis period. The main feature of the model is to measure the relative change in metrics that occurs with the use of a new product and to forecast the net present value (NPV), or the discounted, present day value of all benefits minus all costs, associated with this change. The resulting estimate of economic benefits allows transportation officials rank or choose among alternative products based on economic criteria.