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77 Cost-Benefit Model In the examination of potential parameters, it was con- cluded that there is no need for additional inspections or for A cost-benefit model was developed to assist operators in additional flight crew training. Time taken for deicing and determining whether incorporating diluted fluids into their anti-icing is not affected by the use of dilute fluid, so that operations would be financially advantageous. parameter was also excluded. Finally, whereas there may be Development of the cost-benefit model was completed a quantitative value associated with reduced environmental using a two-step approach. The first step identified potential impact of lower glycol usage, this is not a factor lying within the parameters for use in the model, assessed their typical values, potential user's financial budget, and thus this factor was also and estimated their influence from a cost-benefit perspective. eliminated from the model development. The second step used the selected parameters to develop a The remaining six parameters on the list were incorporated model. into the cost-benefit model. Step 1: Examination of Potential Step 2: Cost-Benefit Model Development Cost-Benefit Model Parameters and Testing A detailed examination of potential parameters was under- The cost-benefit model went through several iterations taken to determine their impact on model outcome. In the before the final version was completed. The various aspects of course of this examination, typical values for each parameter the model and its functionality are described below. were established. These values were then combined in a pre- liminary assessment of potential savings by aircraft type, and an estimate of the number of deicing events necessary in order Model Objective to recoup the investment. The preliminary assessment showed The model was built to determine the financial and glycol that use of fluid dilutions may be cost beneficial depending costs/savings that operators could achieve by incorporating upon the cost of deicing equipment, cost of fluid, and the num- diluted fluids into their operations. The model evaluates two ber of deicing operations per season. potential changes: A detailed examination of potential cost-benefit model parameters is provided in Appendix D. 1. Switching from Type I ready-to-use fluid to buffer fluid; In addition to its use for selecting parameters to be included and in the model, the examination provided parameter values that 2. Switching from Type II/III/IV neat fluid to a combination may be useful to operators in their application of the model. of neat fluid and diluted fluids. Typical costs for purchasing different fluid blends are docu- mented, as well as supplemental capital costs for proportional The model can be used to evaluate the impact of a Type I blending systems, and operational costs for additional training change alone, a Type II/III/IV change alone, or the impact of and maintenance. The examination discusses typical fluid changing both Type I and Type II/III/IV fluids. amounts dispensed for various aircraft types. Use of these parameter values may enable the user to conduct a preliminary feasibility study using the model, before going to the effort of Model Structure developing costs specific to their own situation. The model was developed as a Microsoft Excel workbook. The potential parameters considered for the cost-benefit There are six worksheets (or pages) in the workbook. The model are given in the following list: user works sequentially from the first page to the last page, following the instructions provided on the first page and at 1. Deicing equipment with proportional blending versus the bottom of each subsequent page. Specific instructions conventional equipment; and/or comments for some cells are provided in notes attached 2. Cost of aircraft de/anti-icing fluids; to the cells. The content of each of the six pages is described 3. Additional training of deicing personnel; below. 4. Additional inspection requirements; Instructions: This page describes what the model will do, 5. Additional training documentation; provides general instructions for using the model, describes 6. Additional training for the flight crew; some of the assumptions in the model, and provides a dis- 7. Additional maintenance requirements; claimer about the use of the model. 8. Environmental concerns--savings; Assumptions: This page lists the assumptions used in the 9. Savings in de/anti-icing time; and model. The user is able to alter several default values on this 10. Preliminary estimate of cost/fluid savings using dilutions. page.
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78 Background: This page requires user input. It contains a model assumes the user is currently using a Type I ready- number of background questions. These questions determine to-use and/or a Type II/III/IV neat fluid. if the model will be used for Type I fluid, Type II/III/IV fluid, 2. The model assumes if a switch is made to diluted Type I or both. They also determine variables unique to the user and buffer fluid, all Type I fluids will be diluted to a selected their current operation. buffer, even fluids used in the first step of a two step Costs: This page also requires user input. The user is required operation. to enter costs involved in making the change or changes to the 3. As glycol recovery costs are typically assessed on the type of fluid being used. There are four cost categories: capital amount of fluid, not glycol dispensed, no savings for gly- costs, one time set-up costs, annual fixed costs, and variable col recovery costs were built into the model. costs. 4. The model makes no distinction between Type II, Type Results: This page provides the results of the model analysis. III, and Type IV fluid. This was done as most stations have The key results are the annual financial savings, annual glycol only one of these fluid types available. savings, and number of years to breakeven. 5. The model does not include a factor for inflation, nor does Breakeven Schedule: This page shows the annual change in it include a calculation to determine current value of future cash flow year by year. The key item on this page is the year that cash flows. This is relevant to the breakeven analysis. the initial investment (capital costs plus one time set-up costs) 6. In the glycol savings calculation, it is assumed that Type I is paid off by the savings in fluid consumption. concentrate is 100% glycol. 7. The percentage concentrate of Type I fluid required to achieve a specific FFP is assumed to be the same for all Type User Inputs Required I fluids (the percentages used in the model are the average In order to complete the model, users must have the follow- values of twelve Type I fluids), even though small differ- ing information available: ences are known to exist, specifically between propylene and ethylene based fluids. · Operations per winter season at different temperature 8. The default FFP buffer for Type I fluids is 10°C. The user ranges (for the fluid type or types that will be considered by can modify the buffer to 15°C or 20°C on the assumptions the model); page. · Average amount of fluid used per winter season (for the 9. Assumptions were made in the calculation of fluid savings. fluid type or types that will be considered by the model); These are described in detail in the following sections. · Glycol percentage in currently used fluid(s); · Price of currently used fluid(s); Calculation of Type I Fluid Savings · Price of fluid(s) to be used in diluted operation. Net cost of new equipment required to implement a diluted fluid oper- Several assumptions had to be made in order to estimate the ation, i.e., blending and storage equipment; amount of concentrate Type I fluid that would be required for · Set-up costs, including: cost to gain in-house approval from diluted fluid operations. This section describes these assump- all affected branches to proceed; cost to develop, publish, tions and the specific calculations that are used in the model. and approve new procedures; cost to include new proce- To calculate the volume of Type I concentrate required to dures in airline deicing program and get approval; and cost produce the volume of Type I ready-to-use fluid currently used to develop training materials; annually, three figures are required: · Cost of additional annual training that will be required for ground crews; and · The volume of fluid required at each OAT; · Additional maintenance costs for blending/storage equip- · The required FFP for each OAT; and ment. · The percentage concentrate of fluid required to achieve the required FFPs for the OATs. Assumptions Used in the Model To determine the volume of fluid required at different The model makes several assumptions in its calculations. OATs, the user-entered data for annual number of operations Some of these assumptions are stated up front, some are user at specific temperature ranges and the total amount of Type I controlled, and some reside within the formulae in the work- fluid used per season were compared to determine the volume book. The assumptions are listed on the assumptions page of fluid required in each temperature range. The lowest OAT and described here: in the range was assumed to be the OAT for all operations in the range. 1. If the user indicates a switch to a Type I buffer fluid and/or The FFP required for each OAT is determined by the FFP a diluted Type II/III/IV fluid is being considered, the buffer selected. The default value in the model is a 10°C buffer,
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79 but a 15°C or 20°C buffer can also be selected. For example, if · The volume of fluid required at different OATs; and the OAT is -3°C and a 10°C buffer is required, the fluid must · The percentage of operations that will use neat, 75/25, and have a FFP of -13°C. 50/50 fluid at each OAT. The percentage concentrate required for each FFP was determined using a FFP curve developed using FFP--fluid The volume of fluid required at different OATs is derived concentrate content data collected for 12 Type I fluids. The from the user-entered data for annual number of opera- data for the 12 fluids are shown in Table 46. tions at specific temperature ranges and the total amount The percentage concentrate required for each FFP was then of Type II/III/IV fluid used per season. multiplied by the volume of fluid required at each FFP to deter- The percentage of operations that use neat, 75/25 and 50/50 mine the annual volume of Type I concentrate required. For fluid at each OAT has to be estimated. The model uses the example, if 2000 liters of ready-to-use fluid are used in opera- default values show in Table 47, but these values can be tions at -15°C, then 2000 liters of fluid with a FFP of -25°C are changed by the user on the assumptions page. The default val- required for a 10°C buffer operation. Since the average amount ues were set based on consultations with several individuals of concentrate required for a FFP of -25°C is 48%, the model responsible for operations currently using diluted fluids. will calculate 960 liters of concentrate (2000 L × 48%) are To calculate the volume of neat fluid required for the diluted required to produce 2000 liters of Type I fluid at the appropri- fluid operation, the volume of fluid required at each OAT is ate FFP. divided into the volume of fluid of each dilution. The volume of neat fluid required can then be calculated. For example, based on the usage information provided in Table 47, if 10,000 Calculation of Type II/III/IV Fluid Savings liters of fluid are required in the "< -3 to -6°C" temperature Several assumptions had to be made in order to estimate range, 50% of these operations would use neat fluid (50% × the amount of neat Type II/III/IV fluid that would be 10,000 liters × 100% = 5000 liters neat fluid required) and 50% required for diluted fluid operations. This section describes would use 75/25 fluid (50% × 10,000 liters × 75% = 3750 liters the assumptions and the specific calculations that were used neat fluid required) for a grand total of 8,750 liters neat fluid in the model. required (5000 + 3750 liters). To calculate the amount of neat fluid required for a Type II/III/IV diluted fluid operation, two figures are required: Model Output The primary outputs of the model are the annual financial Table 46. Concentrate required to achieve and glycol savings to be gained by implementing the selected Type I FFPs. changes in fluid use. The number of years until the initial investment is recouped (years to breakeven) is also calculated. Concentrate Required for FFP FFP The annual financial savings are determined by: (°C) Fluid Fluid Fluid Fluid Fluid Fluid Fluid A B C D E F G -9 28% 26% 27% 28% 25% 26% 27% · Calculating the annual savings in fluid costs by comparing -13 32% 34% 35% 35% 30% 33% 33% the cost of fluid in the current operation (volume of fluid -16 n/a n/a n/a 38% 35% 36% 37% required in the current operation × price of current Type I -20 43% 44% 45% 43% n/a 41% 42% ready-to-use and/or Type II/III/IV concentrate fluid) to the -25 n/a n/a 50% 50% n/a 48% 47% cost of the fluid in a diluted operation (volume of concen- -30 n/a n/a n/a 53% 48% n/a 51% -35 57% 59% 59% n/a 55% n/a 55% -40 n/a n/a n/a 60% n/a 60% 58% Table 47. Operations (%) using different Type II/III/IV fluid dilutions at given OAT ranges. Concentrate Required for FFP FFP Fluid Fluid Fluid 12 Fluid Operations Using Each Fluid Dilution (°C) Fluid I Fluid J OAT Range H K L Average Neat 75/25 50/50 -9 21% 28% 28% 31% 20% 26% > 0°C 0% 50% 50% -13 27% 35% 35% 35% 27% 33% < 0 to -3°C 25% 50% 25% -16 32% 40% 40% 38% 32% 36% < -3 to -6°C 50% 50% 0% -20 36% 45% 45% 43% 38% 42% < -6 to -10°C 75% 25% 0% -25 42% 53% 51% 48% 44% 48% < -10 to -15°C 100% 0% 0% -30 46% 58% 56% 53% 49% 52% < -15 to -20°C 100% 0% 0% -35 50% 63% 62% 57% 54% 57% < -20 to -25°C 100% 0% 0% -40 55% 68% 67% 60% 58% 61% < -25°C 100% 0% 0%