Team: FP-180 (Arjun Karthik, Mofeoluwa Osibanjo, Nicholas White, Varunan Varathan)
3PX3 is a level two course at McMaster University that is mandatory for all engineering students. It is a design studio course, similar to 1P13P:
The course focuses on Engineering Finance and understanding how the engineering design process is driven by costs and risks. For the technical and theory portion of the course, lessons were primarily based on measuring costs, making decisions and understanding risks. The course involved a midterm and a final exam. For the Design Project, groups were asked to choose a design idea and assess the financial feasibility of the project. For our project, our team selected a bus stop indicator system that would help transit users determine when the next bus is. The goal was to make it easier to use the system, and thus encourage ridership across the Hamilton Street Railway network.
All analyses not found below can be found in our team’s complex report.
Each team member was also to write up a technical analysis on an are that they are familiar with. My technical analysis was on LED lights that would be used for the screen. The analysis contains parameters for understanding the cost and complexity of the manufacturing and implementation as well as details on how the product ages over time.
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Technical Analysis - Individual
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To generate our net value function, we considered the following assumptions based on an improved transit experience:
In addition, several environmental, societal and ethical concerns were considered as part of our Net Value Function. In the end, the net value function is as follows:
NV = HSR Increased Revenue + Carbon Tax/Person Savings + HSR Transit Savings Via
Route Optimization – (Cost of Labour + Software Maintenance + Cost of Infrastructure + Cost
of Production + Cost of Installation)
The detailed formula in its numerical form can be found in the simple report
Our sensitivity analysis determines which parameters when changed in our initial design would affect the final cost the most. This is vital as it helps our team identify what components and costs are the most important from a financial perspective. We found that the relevant infrastructure costs far outweigh much of the other parameters. Infrastructure costs include the necessary land and machinery required for the manufacturing of the equipment and a place to store vehicles and spare parts.
Below is our Value flow diagram derived for our values used to determine our Net Present Value. This graph shows the investments required for the project and when the project itself returns value to the user and stakeholder.
The analysis (shown in the reports itself) shows that optimizing the material cost by optimizing the volume of each material used in design (after considering its technical requirements and each material’s purchasing and manufacturing costs) will not significantly affect our net value. However, other parameters like infrastructure costs and software costs do not have a lot of variables for an Excel solver to optimize because they are entirely dependent on the amount of data design will need to process which will be a fixed value.
Below is the project plan we created to execute and create the bus stops. This design was required to show the variability in the time frame in which the project can be completed.
In addition to the other analyses, here is our risk matrix done to determine the cost of the various problems that may arise in our project. This matrix associates risk with the likelihood of an event happening and the cost of said event taking place. The riskiest events have a high likelihood of happening with a relatively high cost associated to it. Unlikely events that will likely happen with an interval of greater than 10 years on average were omitted.
