Environmental Engineering Reference
In-Depth Information
Table 6. Determination of the strategic index (SI): Project (ii)
Strategic benefits:
Corporate Ranking (a) Project strategic score value (b)
(a) x (b)
Strategic benefit 1.
10
7.8
78.0
Strategic benefit 2.
10
5.1
51.0
Strategic benefit 3.
9
6.5
58.5
Strategic benefit 4.
8
7.1
56.8
Strategic benefit 5.
9
5.1
45.9
Strategic benefit 6.
10
5.5
55.0
Strategic benefit 7.
6
2.9
17.4
Totals
62
362.6
The strategic index 362.6/62
5.8
Table 7. Calculation of environmental score values: Project (i)
Key Environmental Factors:
Score values determined by appraisal management team
Member
(iii)
Member
(iii)
Member
(iii)
Member
(iv)
Member
(v)
Average
Score
1.
Landfill (tons of waste per year)
5.8
4.1
4.6
3.8
5.1
4.7
2.
Emissions and Waste (per unit of product)
7.8
7.7
8.2
8.1
8.7
8.1
3.
Biodegradable / compostable (%)
8.1
8.4
8.0
8.7
8.7
8.4
4.
Hazardous air emissions
8.0
8.0
7.5
7.9
7.7
7.8
5.
Hazardous waste
9.1
7.7
8.9
8.5
8.2
8.5
6.
Toxic pollution
9.0
8.0
9.1
9.4
8.8
8.9
7.
Total energy used
7.2
7.1
7.2
7.8
7.3
7.3
members agree their individual score values for
each factor, from which an average score value is
calculated (see Tables 7 and 8). A weighting is then
applied to the average score values to arrive at an
environmental score index for each project. This
weighting, determined by corporate management,
is required to reflect the level of 'importance' of
the individual environmental factors - not all fac-
tors will have the same level of importance to the
organisation. The index reflects positive aspects
i.e. reductions in environmentally polluting fac-
tors. So the higher the index the more favourable
the outcome.
The environmental score indices of the two
projects show (see Tables 9 and 10):
The environmental importance of each project
is highlighted by the environmental score index
of 48.8 (77%) for project (i), and 39.3 (62%) for
project (ii). This shows that project (i) has a sig-
nificantly higher level of environmental impor-
tance than project (ii).
Given these summary results, management
must now decide which of the two alternatives is
the most attractive based on their policies, strate-
gies, financial standing, operational requirements
and goals. Overall, adopting the NPV rule only,
project (ii) would be accepted, but based on the
other criteria perhaps project (i) is the one to be
favoured. The FAP model provides a comprehen-
sive overview of the two investment opportunities.
