CHAPTER 6 The economic factor, design strategies, systems analysi ‘The majority of roads are public facilities built with tax dollars in one form or another. In other cases, a primary source of revenue is from loans from bank- ing agencies, but even here, it is necessary to pay off loans through some sort of taxation or road user levies. ‘The same philosophy applies to airport pavements, in that they are largely built with public monies and it is necessary to plan and construct them on a sound economical basis. A primary aim of the paving engineer is to design a facility to handle the anticipated traffic within the economic limitations of his area. It should be em- phasized at the outset that economic analyses can form a basis upon which the engineer can make his final judgment, but economic justification certainly is not the only factor that the engineer considers. TECHNIQUES AND LIMITATIONS Figure 6.1 shows two alternate design strategies. In the figure, serviceability index is plotted as function of time. In the upper portion of the figure, three overlays are considered in the design, whereas, in the lower portion, just one overlay is considered. The above principles and philosophies are also illustrated in Figures 1.9 and 1.10. Especially in developing areas, the most economical approach frequently is to build the road in stages rather than to provide an initial outlay of large sums of money. This is illustrated in Figure 1.10. Since the basic philosophy under- lying the design is to provide a facility for accumulated traffic, a major decision confronting the design engineer is the one relative to the point of time in the life of the structure which will govern the design. Change of grade and alignment often make the road obsolete before the physical condition of the road reaches the point where it must be replaced. Life studies suggest that a bituminous road 195196 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS Initial serviceability = ¢9 (Ps)—> Serviceal Time —> Figure 6.1. Alternate design strategies. (See also Figures 1.9 and 1.10, Chapter 1.) will last, under ordinary circumstances and with proper maintenance, for a period of from 15 to 20 years. At the end of this period, it becomes necessary to apply a resurface to the pavement so that it can be used for another 15- to 20-year period. Thus, the total design life (called analysis period) is the sum of the two stages mentioned above, or in this case a maximum of 40 years. If stage construction is illustrated in Figure 6.1 is to be considered, it is axiomatic that the road must be maintained properly and at the specified points of time in the analysis period. Hence, the techniques to be discussed herein may be used as guides only, and the analysis is but one tool the engineer can use to arrive at a final decision. Another limitation to this type of analysis is that the analysis is no better than the input of data that goes into it. For example, estimations of routine main- tenance costs are often difficult to accomplish and they are no better than approx- imations at best. Likewise, the interest rate used in the analysis becomes very important, By assuming relatively high interest rates, it is possible to change the indicated answer from that which would be obtained if lesser interest rates were assumed. Therefore, the reader is cautioned that the results of the optimization process, wherein different design strategies are evaluated, should be used as guides and that the final decision must of necessity rest with the engineer's experience and judgment of the area under consideration. PAVEMENT COSTS Adequate planning of a highway facility includes consideration of both con- struction and maintenance costs. Unfortunately, routine maintenance costs arePAVEMENT COSTS. 197 difficult to determine at best, since these costs are often hidden in administra- tive costs. In addition to construction and maintenance costs, and for certain problems, some consideration must be given to operating costs of vehicles using the pave- ment. This is particularly true when considering gravel surfaces as opposed to paved surfaces and when considering the alternate of one type of paving against another, However, data are meager relative to the difference in operating costs of vehicles using a paved surface that is in bad condition as compared to one that is in excellent condition. Therefore, the analysis for paved surfaces generally in- cludes constant operating costs and consequently, this factor drops out of the analysis when comparing one type of paved surface with another. Major costs for pavements are not uniform over an analysis period, but are paid out at different specified periods during the life of the pavement. ‘The purpose of maintaining a pavement surface is to increase its serviceability and bring the serviceability to a point that is nearly the same as that after initial construction, Figure 1.9 illustrates serviceability trends as a function of age for the general case. Here it is seen that initial serviceability may be high but as traffic is applied to the road, the serviceability decreases as the pavement deterio- rates under the action of traffic. If routine day-to-day maintenance is applied to the road surface, the loss of serviceability with age is less than the loss of serviceability that results if no routine maintenance is applied to the road, Further, at some specified period of time in the pavement life it may be resurfaced or reconstructed and the service ability then increases to a point that may be nearly the same as the initial serviceability and then deterioration again takes place. Hence, it is necessary to distinguish between routine day-to-day maintenance and major planned main- tenance when considering cost studies of highway pavements, Major Maintenance. Major maintenance, as used herein, is defined as resur- facing of the pavement surface or reconstruction that brings the road surface back to its original as-constructed condition. As shown in Figure 6.1, major main- tenance funds are expended at specified times during the life of the pavement: the length of time between major maintenance operations depends upon the type of road surface. Major maintenance generally takes the form of adding an overlay to the pave- ment to restore its riding qualities. In the case of surface treatments, major maintenance generally consists of an additional surface treatment or the applica- tion of a seal coat to the entire road surface. Roads that are paved initially with asphalt concrete may be overlayed at specified periods of time with additional layers of an asphalt paving mixture. Routine Maintenance. Routine maintenance, as used herein, includes cor- rection of pavement distress as it occurs rather than at specified periods of time after construction. This type of maintenance includes patching of all types in- cluding both temporary and permanent patches, and seals of all types including fog seal, sand seal, chip seal, and slurry seal. Although ideally a pavement surface should be maintained on a routine day- to-day basis, in many cases the road is permitted to deteriorate so long as it is198 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS useable, Hence, though no great amount of routine day-to-day maintenance is applied to a specific road, it is generally necessary to spend more time and money on certain sections of a road than on others just prior to major maintenance. This “end-of period” maintenance may consist of patching, addition of a resurface to correct rutting, removal of badly worn areas, recompaction, and other operations. For purposes of this discussion, routine maintenance may include both of the types mentioned above (routine day-to-day or end-of-period maintenance). In the discus- sion that follows, distinction will be made between major planned maintenance and routine maintenance. A factor that must be considered when dealing with routine maintenance costs is unit costs assigned in the analysis. For example, the ratio of unit construction costs where work is carried out piecemeal as opposed to mainline construction may be very high (see Table 10.2, Chapter 10 for typical values). Too often the engineer falls into the trap of assuming the same unit cost for repair as for original construction. As an example, the unit construction cost for continu- ously reinforced concrete pavement in a certain area was $9.50 per square yard. Due to several factors this particular pavement showed extensive failures after just 1 or 2 years of traffic. The unit cost for repair of this same pavement was $220.00 per square yard. The need for taking the “cost ratio” (ratio of unit maintenance to unit original costs) into account should be apparent.* Road User Costs. Road user costs as used herein refer to one of two types of costs. 1, Running costs of vehicles, which is a function of terrain, type of vehicle, and so on. 2. Added user costs resulting in delay of traffic brought about by shutdown of a facility. Running user costs (RUC) are important when considering unpaved surfaces as possible alternates to paved surfaces. For example, increased costs of operating a heavy truck over a gravel surface may be an important factor. Running costs of various types of paved surfaces, however, are nearly the same and hence, this factor drops out except in the above-mentioned case. ‘The second cost mentioned above, added user costs (AUC), can be an important consideration on heavily traveled facilities such as freeways and high-traffic air- ports. In these cases shutdown of the facility itself may cause an increase in costs which may swing the design over to the adoption of fairly heavy sections to preclude practically all maintenance procedures at a later date. On the other hand, for low-traffic roads, added user costs brought about by maintenance are generally minimal, since it is possible to keep the facility operational even though it is necessary to slow down the traffic during maintenance. Subsequent paragraphs will discuss in detail the sensitivity of these various factors. * The reader is referred to Chapter 10, particularly pages 885 to 887 for a detailed discussion of the cost ratio.ECONOMIC ANALYSIS. 199 ECONOMIC ANALYSIS ‘An economic analysis of construction and maintenance costs is particularly important from the standpoint of stage construction, In the analysis that is given below, consideration will be given only to those costs that are relative to the pavement alone. Definition of Symbols Used in the Analysis. In the economic analysis that is presented in the next paragraphs, several symbols and notations have been adopted as described below. CR = capital recovery factor (converts to average annual cost) AAG = average annual cost PW = present worth factor SF = sinking fund factor n= number of years in the analysis period interest rate on the investment = salvage value initial cost = major maintenance costs (resurface, etc.) M, = routine maintenance costs (patching, etc.) RUC = running user costs (running vehicle costs) AUC = added user costs (resulting from maintenance, etc.) In addition to the above, several special cases are discussed; the symbols used for these are defined in the text. Interest Rate and Its Effects. As in any economic analysis, rates of interest available for money to be spent at some later date greatly influence the total cost of the investment. Interest has the effect of reducing maintenance costs, since by not spending this money at the time of original construction, the government agency can realize a “profit” on this money by investing it elsewhere or, in the case of tax dollars, money earns interest for the taxpayer prior to the time the tax is paid at a later date. Pavement alternates with large initial cost and low maintenance or user costs are favored by low interest rates, Conversley, high interest rates result in selection of alternates that combine low initial costs with high maintenance and user costs. Selection of Interest Rates. Since the interest rate used in the analysis plays such an important role in selecting design strategies, this point deserves careful attention by the designer. Winfrey (22) has summarized several factors that should be considered. Included among these are the price that citizens are currently paying, earning rate of private investments, probable rates of return on public works in the area, and probable rates paid by governments concerned. ‘Winfrey suggests that the rate should be determined on the basis or viewpoint of the individuals furnishing the capital. Risks and uncertainties are difficult at best to estimate. Another factor that enters the problem is the unbalanced inflation rates that might exist for various pavement components. For example, surfacing materials may increase in price at a greater rate than subbase or base200 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS. materials depending upon scarcity of natural resources and many other factors. These must all be accounted for in the analysis. Present Worth. If P dollars are invested now, this money will have additional worth at the end of the investment period as shown in equation 6.1. M = PA +i* (6.1) Conversely: M ’ "Oth - P = MW) (6.3) | 1 where PW = 7-5. (6.4) = present worth factor i = interest rate n number of years in the analysis period The Present Worth factor (PW) is the worth at the present time of a unit of money that will be spent at some future date. For example, if an agency had M dollars to spend on maintenance in 20 years, and if the money would earn 8 percent compound interest if it were invested now, its worth (assuming year- end payments) at the present is: M a (1 + 0.08)2° Table 6.1 gives values of PW for various interest rates and periods of time. In the above example the present worth is M(0.2145). The effect of computing present worth of future investments is illustrated in Figure 6.2. = M(0.2145) (6.5) —— Actual cost ———Present worth cost Major maintenance = Accumulated pavement cost 30 yx Time ———> Figure 6.2. Comparison of actual and present worth cost.ECONOMIC ANALYSIS 201 TABLE 6.1. Single-Payment Present Worth Factors 1 pw = 1 at+4 0% = 2% 4% 6% B%_——10%_— 12% 15% 20% 25% 11,0000 0.9804 0.9615 0.9434 0.9259 0.9091 0.8929 0.8696 0.8333 0.8000 21,0000 0.9612 0.9246 0.8900 0.8473 0.8264 0.7972 0.7561 0.6944 0.6400 3 1.0000 0.9423 0.8890 0.8396 0.7938 0.7513 0.7118 0.6575 0.5787 0.5120 4 — 1,0000 0.9238 0.8548 0.7921 0.7350 0.6830 0.6355 0.5718 0.4823 0.4096 51,0000 0.9057 0.8219 0.7473 0.6806 0.6209 0.5674 0.4972 0.4019 0.3277 6 — 1.0000 0.8880 0.7903 0.7050 0.6302 0.5645 0.5066 0. 0.2621, 7 1.0000 0.8706 0.7599 0.6651 0.5835 0.5132 0.4523 0. 0.2097 8 —1,0000 0.8535 0.7307 0.6274 0.5403 0.4665 0.4039 0. 7 0.1678 9 — 1,0000 0.8368 0.7026 0.5919 0.5002 0.4241 0.3606 0.2843 0.1938 0.1342 10 11,0000 0.8203 0.6756 0.5584 0.4632 0.3855 0.3220 0.2472 0.1615 0.1074 11 1,0000 0.8043 0.6496 0.5268 0.4289 0.3505 0.2875 0. 12 1,0000 0.7885 0.6246 0.4970 0.3971 0.3186 0.2567 0. 13 1,0000 0.7730 0.6006 0.4688 0.3677 0.2897 0.2292 0. 14 1.0000 0.7579 0.5775 0.4423 0.3405 0.2633 0.2046 0.1413 0.0779 0.0440 15 1,0000 0.7430 0.5553 0.4173 0.3152 0.2394 0.1827 0.1229 0.0649 0.0352 16 1.0000 0.7284 0.5339 0.3936 0.2919 0.2176 0.1631 0.1069 0.0541 0.0281 17 1,0000 0.7142 0.5134 0.3714 0.2703 0.1978 0.1496 0.0929 0.0451 0.0225 18 1.0000 0.7002 0.4936 0.3503 0.2502 0.1799 0.1300 0.0808 0.0376 0.0180 19 1.0000 0.6864 0.4746 0.3305 0.2317 0.1635 0.1161 0.0703 0. 0.0144 20 1.0000 0.6730 0.4564 0.3118 0.2145 0.1486 0.1037 0.0611 0.0261 0.0115 25 1.0000 0.6095 0.3751 0.2330 0.1460 0.0923 0.0588 0.0304 0.0105 0.0038 30 1,000 0.5521 0.3083 0.1741 0.0994 0.0573 0.0334 0.0151 0.0042 0.0012 40 1,000 0.4529 0.2083 0.0972 0.0460 0.0221 0.0107 0.0037 0.0007 0.0001 50 1,0000 0.3715 0.1407 0.0543 0.0213 0.0085 0.0035 0.0009 0.0001 100 1.0000 0.1380 0.0198 0.0029 0.0005 0.0001 Average Annual Cost. In the economic analysis, costs are sometimes expressed as an average annual cost even though the money is spent in a Iump sum. The average annual cost is given by equation 6.6. AAG = I(CR)« (6.6) where CR = capital recovery factor i" GQ+)"-1 ©) initial cost As an example, if any agency were to spend J, dollars to build a road, and if the analysis period is 20 years with a compound interest rate of 8 percent, the average annual cost assuming the money is “spread” over 20 years is 0.08(1 + 0.08) “AG + 0.08)" — 1 Table 6.2 shows values of CR. ) I, (0.1019)202 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS 12% 15% 1.12000 1.15000 0.59170 0.61512 0.41635 0.43798 0.32923. 0.35027 0.27741 0.29832 0.24323 0.26424 0.21912 0.24036 0.20130 0.22285 0.18768 0.20957 0.17698 0.19925 0.16842 0.19107 0.16144 0.18448 0.15568 0.17911 0.15087 0.17469 0.14682 0.17102 0.14339 0.16795 0.14046 0.16537 0.13794 0.16319 0.13576 0.16134 0.13388 0.15976 0.12750 0.15470 0.12414 0.15230 0.12130 0.15056 0.12042 0.15014 TABLE 6.2. Capitol Recovery Factors al + i) CR = (+a an 0% = 2% A BT BMW 1 1.00000 1.02000 1.04000 1.06000 1.08000 1.10000 2 — 0,50000 0.51505 0.53020 0.54544 0.56077 0.57619 3 0,33333 0.34675 0.36035 0.37411 0.38803. 0.40211 4 — 0,25000 0.26262 0.27549 0.28859 0.30192 0.31547 5 0.20000 0.21216 0.22463 0.23740 0.25046 0.26380 6 0.16667 0.17853 0.19076 0.20336 0.21632 0.22961 7 0.14286 0.15451 0.16661 0.17914 0.19207 0.20541 8 012500 0.13651 0.14853 0.16104 0.17401 0.18744 9 — OLILIL 0.12252 0.13449 0.14702 0.16008 0.17364 10 0,10000 0.11133 0.12320 0.13587 0.14903. 0.16275 11 0,09091 0.10218 0.11415 0.12679 0.14008 0.15396 12 0,08333 0.09456 0.10655 0.11928 0.13270 0.14676 13 0.07692 0.08812 0.10014 0.11296 0.12652. 0.14078 14 0.07143 0.08260 0.09467 0.10758 0.12130 0.13575. 15 0.06667 0.07783 0.08994 0.10296 0.11683 0.13147 16 0.06250 0.07365 0.08582 0.09895 0.11298 0.12782 17 0,05882 0.06997 0.08220 0.09544 0.10963 0.12466 18 0.05556 0.06670 0.07899 0.09236 0.10670 0.12193 19 0.05263 0.06378 0.07614 0.08962 0.10413 0.11955. 20 = :0.05000 0.06116 0.07358 0.08718 0.10185 0.11746 25, 0.05122 0.06401 0.07823 0.09368 0.11017 30 0.04465 0.05783 0.07265 0.08883 0.10608 40 0.02500 0.03656 0.05052 0.06646 0.08386 0.10226 50 0.02000 0.03182 0.04655 0.06344 0.08174 0.10086 0.10001 100 0,01000 0.02320 0.04081 0.06018 0.08004 ‘The sinking fund factor is equal to: SF = (PW)(CR) 8 = (cm) (a=) - 0.12000 0.15000 i (a +i)" 20% 25% 1.20000 1.25000 0.65455 0.69444 0.47473. 0.51230 0.38629 0.42344 0.33438 0.37184 0.30071 0.33882 0.27742 0.31634 0.26061 0.30040 0.24808. 0.28876 0.23852 0.28007 0.23110 0.27349 0.22526 0.26845 0.22062 0.26454 21589 0.26150 0.21388 0.25912 0.21144 0.25724 0.20344 0.25576 0.20781 0.25459 0.20546 0.25366 0.20536 0.25292 0.20212 0.25095 0.20085 0.25031 0.20014 0.25003 0.20002. 0.25000 0.20000 0.25000 (6.8) (6.9) Salvage Value. A road that is designed to last for a period of m years may or may not have some salvage value at the end of the analysis period depending on several factors. In some cases, the surface of the road itself will have some value, but changes in right of way, deterioration of structures, culverts, and other features leave this point open to question. If the salvage value is designated by S, the total present worth is: Total present worth = I. — S(PW) (6.10) Major Maintenance Costs. Major maintenance costs are paid out in lump sums at specified periods during the life of the pavement (Figure 6.1). In addi-EFFECT OF GROWTH AND VARIABLE COSTING 203 tion, however, the road will receive routine maintenance throughout the life of the pavement. If the major maintenance at the end of n, years is designated My, and the total analysis period is m years, the present worth of the costs are: Present worth = J, + Mmn(PW): — S(PW)» (6.11) It should be recognized that values of routine maintenance costs and/or road user costs can be substituted in the equation in lieu of My. Hence, the general form becomes: Total present worth = Le + 35 (s)(PW); — S(PW)s (6.12) 7 where x becomes values of costs applied at intervals regardless of their type and PW is the present worth factor for the years at which x is spent. Baldock (4) has proposed a modification of equation 6.12 as follows: AAC = [. + M,(PW), + Ma(PW)2 — (: = *) ataew),| (CR), + My (6.13) In equation 6.18 it will be noted that the last terms (I — ¥/X)M, within the brackets represent the salvage value. In addition, the following definitions apply: Y = Number of years between the last major maintenance and the end of the analysis period. X = Estimated life of the last resurface. M, = Routine maintenance costs of the pavement per year. ‘Average Annual Costs versus Present Worth. When comparing alternates of different pavements, there is little need, as a rule, to compute the annual cost. Rather, it is more convenient to merely compare the total present worth of the alternates. Use will be made of present worth in the remainder of this text. EFFECT OF GROWTH AND VARIABLE COSTING Traffic growth influences the cost of highway pavements in several ways. First, the relative costs of construction as a function of traffic are obvious. Secondly, the cost of maintaining the surface is dependent upon surface type, traffic and availability of materials. Third, road user costs are influenced directly by amount of traffic. Assume, for example, that it is desired to compute user costs and that these costs are given in terms of dollars per vehicle. The rate of traffic growth is r percent per year and the rate of return on the investment is i percent per year. Nr (PW), RUC = >> V"(865)(F)(R) (6.15) T RUC = S [ (365) | ((PW),] (6.14)204 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS where Ny = initial average daily traffic (or vehicles of a given class) F = vehicle operating costs, dollars per vehicle (Pw). ~ (PW), (PW); = present worth for interest R (PW), = present worth for traffic growth ESTIMATING COSTS Road User Running Costs (RUC). In an economic analysis of alternate pave- ment designs, it is sometimes necessary to make an estimate of road user cost. The operating costs of vehicles are dependent upon type of road surface and speed. Speed in turn is a function of the rate of rise and fall of the roadway. The upper portion of Table 6.3 shows the average running speed of passenger cars and trucks for three road surfaces, and the lower portion of the table indicates the present reduction in speed from level speed as a function of rate of rise and fall. Alter an estimate is made of the average running speed of the vehicle, the average running costs for different cars and trucks can be estimated by means of data shown in Tables 6.4 and 6.5. The trucks considered in Table 6.5 are illustrated in Figure 6.3 TABLE 6.3. Speed by Typo of Vehicle, Type of Road, and Rete of Rise and (@) Speed in km/hr by Road Type on Level Tangent Sections ‘Type of Vehicle Paved Gravel Earth Passenger cars 80 64 56 ‘Trucks 72 56 48 () Percent Reduction in Speed from Level Speed for Rate of Rise and Fall (meters per 100 meters) of ‘Type of Vehicle 1 2 4 6 8 Passenger cars 7 14 23 Truck I MW 22 33 Truck IT 15 30 42 ‘Trucks HI & IV 7 18 42 60 7 * From DeWeille.ESTIMATING COSTS 205 TABLE 6.4. Operating Costs for Different Cars as a Function of Speed and Type of Road Surface” European Car Average Car American Car Paved Gravel Earth Paved Gravel Earth Paved Gravel Earth Speed (km/hr) 88 72 64 8872 8872 Cost ($/1000 km) 19.21 24.17 30.90 25.25 31.77 40.77 31.27 39.34 50.59 Speed (km/hr) 80 64 56 80 6456 80 6456 Cost ($/1000 km) 19.84 25.49 32.59 26.10 33.48 42.65 32.29 41.34 53.21 Speed (km/hr) 72 56 48 @ 6 48 72 56 a8 Cost ($/1000 km) 20.64 27.06 35.04 27.10 35.42 46.00 33.50 43.71 56.91 Speed (km/hr) 64 48 40 64 48 = 40 64 48 40 Cost ($/1000 km) 22.04 29.53 38.65 28.87 38.49 50.44 35.63 47.61 62.24 * From DeWeille. It should be noted that operating costs of cars and trucks are considered to be a constant value for all types or paved surfaces and that it is not possible to account for differences in operating costs for surfaces in various stages of deterioration. Added Road User Costs (AUC). Various studies have been made of added costs resulting from shutdown due to maintenance. Some of these studies have expressed delay costs mathematically while others have resulted in tabulated Passenger cars = a ees co os A Truck I ‘Truck IT (1 Ton) (3.5 Ton) (Panel) (Pickup) (Stake) (Van) (15 Ton) (18 Ton) (Tractor~semitrailer, 2-S2) (Tractor~semitrailer. 3-S? Figure 6.3. Silhouettes of vehicles. (From DeWeille)“MEMPC WO » 1s"0zz, (wrx 0001/8) 803, 8ST LBETL H1"BL 61ezt 19° Wlzl 06°6L SHrzS 20°08 GI'9S OL" 6E fa OF 9s ze OF 9s we OF 9s ee oF 9s (G2y/an)) paads: BhLe OST 1H BL HO'OIS BEFI LL LL IeIzl ser 9e ISZL HIS 19°9E (#4 0001/8) 18029 oF 8b *9 OF 8b *9 OF oF OF 8 +9 (ay/ary) paadg 1061S BOI LLL 62°60 16 IZL ST 6L OB LIT S9°eL 06°29 Glee ag"SE (ary 0001/8) 1809) oF 95 aL 8 9s oe 8 9¢ 8b 9¢ oe (ay/ary) paads SH9IZ 9OLZI OF zB B1'2OZ «BWI 2H'HB ISS] Zg"eL gaze 6849 $L'Sh 90'SE (ay 000T/$) 3800, 9s +9 og 9g +9 og 9s +9 o8 9¢ #9 08 (ay/ury) paadg queg paw poaeg yueg —jaaeig —paaeg yueg ppaeigpoaeg queg jaaeiy paar ALON, Tp Tn, Tp 2o}ins peoy jo ed) puo peads Jo uoysun » so syon1j uesoyIa Jo tte BuNDedD “Sp TTYLESTIMATING COSTS 207 typical values of costs. It must be recognized that these costs are dependent upon a large number of variables. For example, in remote areas, where vehicular traffic is low, the calculations may be little better than mathematical exercises. ‘The reason for the above is that on low-traffic roads, it is possible to maintain traffic with little difficulty, and the matter of road user delay costs has little significance. There is little doubt that on roads that carry high traffic, the delay costs become quite significant. The matter of road delay costs is further compounded by the method of traffic control used at the site. On two-lane roads, the traffic in the lane that re- ceives an overlay may be shunted around the shoulder, or it may be delayed with one-way traffic permitted in the opposite lane. On multiple-lane roads, a variety of methods may be used to handle traffic during maintenance. In any case, it becomes necessary to estimate the speed profiles around the road barricades. This factor must be estimated for each local condition under consideration. In the case of airports, loss of revenue due to shutdown can be estimated using current figures for landing fees, and so on. Figure 6.4 shows data for added costs resulting from speed changes for three types of vehicles (a) passenger cars, (6) single-unit trucks, and (c) semitrailers having tandem axles on both the tractor and trailer (designated 3-52). Major Maintenance Costs (Overlays). The costs for major maintenance can be estimated using several techniques. First, design charts generally relate required thickness with accumulated axle loads; thickness in turn can be con- verted to a function of time. Methods for accomplishing this are given in the chapters of this book dealing with design.” Methods of evaluation and design of overlays are presented in Chapter 20, along with data dealing with techniques for maintenance. Overlay costs can be estimated with some certainty using these overlay design methods. Routine Maintenance. From a quantitative point of view, one of the most difficult economic factors to estimate is routine maintenance. The reason for this is that routine maintenance is interrelated with other factors. For purposes of this discusion, routine maintenance is concerned entirely with pavement sur- face, but cost records kept by most agencies include costs for shoulder main- tenance, snow removal, and so on, in the data. Various cost models have been developed for estimating maintenance (15, 16). These models, however, are approximations and should be treated as such. Because of the above, routine maintenance costs must be evaluated for each case, and is becomes necessary to rely upon past records for the geographical area under consideration. Changes of Routine Cost with Time. For the usual case, the amount of money spent for routine maintenance on a given road increases with time. This can be demonstrated by referring to Figure 6.2. Immediately after construction of a pavement, very little expenditure is made for maintenance, but as time goes on, it is necessary to spend more and more money each year as the pavement de- teriorates. * Chapters 14 and 15 present data for asphalt pavements and Chapters 16 and 17 present data for concrete pavements.lee ied e T Teste 45} =| > | 850 | . 4 ry Passenger cars 3 ‘Single-unit trucks B35] 78 | & $40 4 5% 42 i & B25 =| 2 3 & 30 4 = 20 42 & s 215 8 2 | & 10) 10) an > 0 0 Oo 10 2 30 40 50 60 70 8 oO 10 20 30 40 30 60 70 ‘Speed reduced to and returned from (miles/hour) ‘Speed reduced to and returned from (miles/hour) oo oot 250 }— oe 3-82 trucks 4 8 | Dollars per 1000 speed change cycles T 1 0 10 20 30 40 50 60 ‘Speed reduced to and returned from (miles/hour) Figure 6.4, Added user costs resulting from speed changes. (From Curry and Anderson, NCHRP Report 183.) Note: Numbers on curves are values of initial speed in mph, 208SENSITIVITY OF THE COST FACTORS 209 According to the concepts shown in Figure 6.2, the rate of change of expendi- tures is itself a function of time. However, it is generally assumed that the rate of change is constant and can be given as shown in Equation 6.16. M, = M? + (K)(n — 1) (6.16) where M, = routine costs during any year n routine costs during first year increase in costs per year n= years Types of Routine Maintenance. Estimates of routine maintenance costs can be determined by accounting for the type of maintenance applied to a given pavement. For asphalt pavements this type of maintenance includes sealing of pavement surface perhaps every 10 years, and patching and sealing of cracks as needed. For concrete pavements the routine expenditures are primarily sealing of all joints and cracks and patching as needed. SENSITIVITY OF THE COST FACTORS The economic analysis presented in previous paragraphs produces a numerical answer that can be used as a guide for the engineer in establishing his design. These must be used as guides only, since the factors that are used are subject to judgment of the analyst and are interrelative with many other factors. Pavement design in its strictest sense has historically been concerned with evaluation of soil strength and estimation of traffic to be applied to the pave- ment; from these data the engineer selects a structure. Generally, the design life of the pavement structure is assumed, or at least implied in the analysis. If one considers the matter of serviceability, and in particular the factor of personal opinion as it influences serviceability, it becomes apparent that a specific design can vary as much as 100 percent and that little argument can be propounded to substantiate or negate the hypothesis upon which the design is predicated. ‘When considering alternate designs some of the factors become critical whereas others become insensitive; the designer must keep these in mind at all times. The following paragraphs will present a short discussion of the sensitivity of the factors that influence the economic analysis. Effect of Salvage Value. The salvage value of the pavement investment is, as shown in equations 6.10 through 6.12, reduced to the present worth of the salvage value at the end of the analysis period and it decreases as the analysis period increases. If, for example it is assumed that the salvage values is 80 per- cent of the initial cost at the end of 20 years, and assuming an interest rate of 10 percent, the present worth factor (PW) at 20 years is 0.1486; for a 40-year period it is 0.0221. This means that for the assumed conditions the present worth of the salvage is as shown below: At 20 years: Present worth of salvage = /,(.80)(0.1486) = 0.04451, Expressed as a percentage the value of 7, thus is equal to 100 — 4.45 = 5.5 percent210 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS At 40 years: Present worth of salvage = I.(.30)(0.0221) = 0.00663 The effective initial cost, expressed as a percentage of the actual value I,, for this case is equal to 100 — 0.66 = 99.3 percent If the analysis period is taken to be as long as 40 years, the salvage value, therefore, can be assumed to be equal to zero. Even for lesser analysis periods, salvage value may have little effect on the final decision. Sensitivity of Traffic. The amount of traffic that will be applied to a road has a significant effect on the cost analysis in many cases. Table 6.6 shows the effect of traffic on cost for several assumed conditions. For poor subgrades (CBR = 2%) the optimum staging as shown in Table 6.6 is seen to be influenced significantly by traffic. On the other hand, for good subgrades (CBR = 11%) the effect of traffic growth becomes less sensitive. In general, for low traffic and for relatively thin pavements, optimum staging is nearly independent of traffic, for this case being from 10 to 12 years. On the other hand, for poor subgrades which require thick pavements, the optimum staging increases as traffic rate for growth increases. On the basis of the above, for heavily trafficked roads, it becomes uneconomical to use planned stage construction, since shutdown of a facility and added user cost resulting from this shutdown may be so high as to preclude anything but an initial heavy design that requires little maintenance (refer to CBR = 2%, EAL = 1x 108 and r = 10%). However, for low-traffic roads, the most economical approach may be to use stage construction, generally at 10-year intervals. TABLE 6.6. Effect of Traffic on Costs. (Added User Costs are Considered and the Interest Rate is 6%) Subgrade CBR Initial Traffic Growth Optimum Stage (%) Yearly EAL* (%) Gr) 2 5 xX lot be 10 6 pes 10 13 1X 108 2 12 6 18 10 25 n 5 xX 108 2 10 6 10 10 10 1 x 108 2 10 6 " 10 14 # Equivalent 18,000-pound single-axle loadsSENSITIVITY OF THE COST FACTORS 21 TABLE 6.7. Effect of Added User Corts, (Intorest Rate is 13% and Traffic Growth Is 6%) Subgrade CBR Initial Added Costs Optimum Stage (%) Yearly EAL* Considered? (yr) 2 5 X 108 Yes 9 No 9 5X 10° Yes 20 No 15 ul 5 Xx 10 Yes 10 No 10 5 X 108 Yes 17 No 14 # Equivalent 18,000-pound single-axle loads. Effect of Added User Cost. Table 6.7 shows the effect of several variables on staging, wherein the added user costs brought about by shutdown of the facility is of prime concern, For low-traffic roads, especially for good subgrades wherein relatively thin sections can be used, the added user costs resulting from main- tenance is of little consequence and has little effect on the analysis. For very-high-traffic roads, the added user cost becomes significant and many times it is the overriding factor that dictates the design. This point relative to user costs deserves very careful consideration by the engineer, since on freeways and other highways that carry very large amounts of traffic, the shutdown may be so costly as to preclude any maintenance what- soever. For these cases, initial construction of strong sections wherein main- tenance costs are kept to a minimum should be adopted wherever possible. Sensitivity of Interest Rates. One of the major factors which affect the analysis is the rate of interest assigned to the investment. This is illustrated in Table 6.7 for three rates of interest. Increasing the rate of interest, in effect, gives a decided advantage to deferring payments on the investment for as long as possible. For interest rates as high as 20 percent, even for very high traffic, it can be demonstrated that stage construc- tion is the most economical approach since this defers much of the payment of the investment to some later date. When analyzing these problems, it is best to at least make solutions for two interest rates before final decisions are made on the design to be adopted. Length of Analysis Period. ‘The length of analysis period to use depends, in part at least, upon salvage values that are assumed. Most economists agree that, for the sake of conservatism, the analysis period should be low. Use of relatively low periods is further justified for pavement analysis, since it becomes necessary to make certain assumptions relative to the condition of the pavement at various time intervals. Recognizing that the analysis is a planning tool, final decisions relative to the exact type of major maintenance cannot be212 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS TABLE 6.8. Eflect of Interest Rate. (Added User Cotte Are. nsidored and Rate of Traffle Growth Is 6%). Subgrade CBR Initial Interest Rate Optimum Stage (%) Yearly EAL* (%) (yr) 7 5 X 10¢ 6 aed 13 9 20 ie 5X 108 6 35 13 20 20 12 uN 5 xX lot 6 10 13 10 20 10 5X 108 6 35 13, 7 20 12 * Equivalent 18,000-pound single-axle loads. made until the time actually arrives for the maintenance, Generally, deflection measurements are made and final decisions relative to overlay depth, and so on, are made at that time. Inflation. The economic analysis is based on current prices, These same prices are applied to estimates of future costs, Winfrey (22) points out that inflation is probably more difficult to forecast than price, and, if attempted may introduce another uncertainty in the economic analysis. Gertainly, use of an inflation factor gives preference to higher investments today. On the other hand, national economy also expands and inflation effects are balanced out, Winfrey concludes that “it is preferred practice and concept to omit any inflation factor.” ‘The above idea is widely held and it is common practice to omit inflation as a factor when comparing alternates. Only when inflation becomes “unbalanced” does it have a real effect. For example, if the real price of resurfacing increased at a higher rate than the general price trend, this would be true. If there was a significant differential between the increase in the price of resurfacing and the general price trend in the economy, use of stronger initial pavement sections might be justified. ILLUSTRATIVE EXAMPLES OF COMPUTATION The following paragraphs demonstrate several computations for a variety of conditions. For the purpose of illustrating the methods, the problems are brief and are worked in parts to demonstrate the techniques. For a given real problem, it is necessary to account for all factors that might influence the decision. Hence, in some cases, the computations are lengthy if one is to consider user costs, routine maintenance, and major maintenance costs in a single problem.ILLUSTRATIVE EXAMPLES OF COMPUTATION 213 Unit Costs. For the problems that follow, user costs are those shown in ‘Tables 6.3 through 6.5 and Figure 6.4. Material costs are as given below. It should be recognized that these costs are relative and that they change with time and location Any changes in these costs have the net effect of increasing or decreasing the dollar value by a fixed ratio; the selection of alternates does not change. Asphalt concrete, $25 per ton in place, $1.25/yd2/inch Granular base, $5.00 per ton in place, $0.25/yd2/inch Granular subbase, $3.00 per ton in place, $0.15/yd2/inch, Surface treatment in place, $0.75/yd? per layer Seal coat in place, $0.50/yd? per layer Ilustrative Example 6.1, Major Maintenance. For this example the ADT is 1000 initial vpd, with 40 percent trucks, 80 percent single unit, and 10 percent $-2 trucks. Two alternatives are shown as follows: Alternate No. 1 Alternate No. 2 (20-year life) (10-year stage) Surface 4 in. Surface Qin. Base 6 in, Base 6in. Subbase 18 in. Subbase 18 in. Seal @ 10 years Resurface, 2 in. @ 10 years The example computations are shown in Table 6.9. Note that for this exam- ple, the actual required resurface at 10 years on the second alternate is 14 inches. However, accounting for a “wear-out factor,” a 2-inch resurface is planned. TABLE 6.9, Example 6.1, Comparison of Alternates Molor Maintenance (i = 8% per year) Trem Alternate No. 1 Alternate No. 2 ($/yd*) (8/yd?) Surface 1. = (4) (1.25) I, = (2) (1.25) = 2.50 Base I, = (6) (0.25) I. = (6) (0.25) = 1. Subbase I, = (18) (0.15) I, = (18) (0.15) Total I. Maintenance Seal = 0.50 Mn = 2(1.25) @ 10 years (Seal) (PW) = (0.3) (.463) (M,) (PW) = (2. 0) 463) 0.23 Total present worth $9.43/yd? $7. ssn Less 30% Salvage (.3) (9.20) (.215) = —.59 (.3) 6. 0) (.215) = —.43 $8.82 $7.36 Cost per 24-foot roadway per mile (zero salvage): Alternate No, | = (9.43) (8) (1760) Alternate No. 2 = (7.86) (8) (1760)214 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS. Alternate No. 2 is seen to be most economical. The matter of using inflation factors may in some cases be warranted. The use of inflation factors are justified only when the price increase is unbalanced and disproportionate. If significant price differences between future costs of resurfacing relative to the general price trends are expected with a high degree of certainty, the effect of inflation should be studied by means of a sensitivity analysis. This may result in reversing the conclusion for the Example 6.1. For this analysis the salvage value is a function of the original investment. It is obvious that different salvage values would need to be applied to the resurface. In any case, the salvage value is so low that its effect is generally ignored. If the rate of return is greater than about 7%, salvage values generally become insensitive in the analysis. Mlustrative Example 6.2, Routine Maintenance. All factors are the same as those for example 6.1. The initial routine maintenance cost is $75 per mile, with a rate of increase of $15 per year (Table 6.10). The primary difference between alternates No. I and No. 2 is that the second alternate re-starts routine cost at the eleventh year. TABLE 6.10. Example 6.2, Routine Maintenance Costs Alternate No. | Alternate No, 2 Present Present (PW). Cost Worth Cost Worth tn (8%) ($/mile) —_($/mile) (8/mile) —_($/mile) 1 0.926 5 69.45 5 69.45 2 0.857 90 77.13 90 77.13 3 0.794 105 83.37 105 83.37 4 0.735 120 88.20 120 88.20 5 0.681 135 91.94 135 91.94 6 0.630 150 94.50 150 94.50 7 0.584 165 96.36 165 96.36 8 0.540 180 97.20 180 97. 9 0.500 195, 97.50 195 97. 10 0.463 210 97.23 210 97. Wl 0.429 225 96.52 5 32. 12 0.397 240 95.28 90 35. 13 0.367 255 93.58 105 38 14 0.340 270 91.80 120 15 0.310 285 88.35 135 16 0.292 300 88.35 135, 7 0.270 315 85.05 165 18 0.250 330 82.50 180 19 0.232 345 80.04 195 20 0.214 360 77.04 210 Total $1770.54 $1305.50ILLUSTRATIVE EXAMPLES OF COMPUTATION 215 Adding the routine costs to the total present worth of example No. 1 results in: Alternate No. 1 $132,774 + 1770 = $135,544 Alternate No. 2 $110,528 + 1305 = $111,833 Example 6.3, Running User Costs and Cost of Gravel versus Paved Surface. Given Initial ADT = 50 vpd Traffic growthr = 4% Interest rate i = 8% Traffic makeup Average car = 50% ADT Truck I = 20%, ADT ‘Truck II = 20% ADT ‘Track IT = 10% ADT Level terrain (speeds given Table 6.3) PW factors given (Table 6.1) TABLE 6.11. Example 6.3, Running User Costs and Variable Maintenance Costs (Rate of traffic growth r = 4%; interest i = 87%.) Year (PW), (PW); (PW): (Pw), a (Traffic 4%) (Interest 8%) (PW), Pw), 1 0.9615 0.9259 0.963 0.963 2 0.9246 0.8573 0.927 1,890 3 0.8890 0.7938 0.892 2.780 4 0.8548 0.7350 0.859 3.641 5 0.8219 0.6806 0.828 4.469 6 0.7903 0.6302 0.797 5.266 7 0.7599 0.5835 0.767 6.033 8 0.7307 0.5403 0.739 6.772 9 0.7026 0.5002 0.711 7,483 10 0.6755 0.4632 0.686 8.169 u 0.6496 0.4789 0.660 8.829 12 0.6246 0.3971 0.636 9.465 13 0.6006 0.3677 0.612 10.077 4 0.5773 0.3405 0.589 10.666 15 0.5553 0.3152 0.567 11.233, 16 0.5339 0.2919 0.547 11.780 17 0.5136 0.2703 0.526 12.305 18 0.4939 0.2502 0.506 12.812 19 0.4746 0.2317 0.488 13.300 20 0.4564 0.2145 0.469 13.769ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS. Paved surface (costs dollars per 1000 km per year) RUG, cars, 80 km/hr (0.5)(50)(26.1)(365) = $288,162 RUG, Truck 1, 72 km/hr (0.2)(50)(35.58)(365) = 129,867 RUG, Truck I, 72 km/hr (0.2)(50)(51.33)(865) = 187,354 RUG, Truck 111, 72 km/hr (0.1)(50)(79.15)(865) = (144,448 $699,831 Gravel Surface (cost dollars per 1000 km per year) RUG, cars, 64 km/hr (0.5)(50)(33.48)(365) = 805,505 RUG, Truck I, 56 km/hr (0.2)(50)(47.79)(865) = 174,438 RUG, Truck II, 56 km/hr (0.2)(50)(74.65) (365) = 272,472 RUG, Truck III, 56 km/hr (0.1)(50) (121.91) (865) = 222,485 Total $974,895 Total RUG, paved surface (20 years) 699,831 _ Too” (13-769) = $9,685/km Total RUG, gravel surface (20 years) 974,895 Tan” (18.769) = $18,428/km Alternate pavements Gravel surface 6 inches, replace every 5 years Paved surface 6-inch subbase 6-inch base Double surface treatment initial Single surface treatment at 10 years Cost of gravel Total present worth = 1.50 [1 + (PW)s+(PW):0+(PW)15] 1.50 (1+.6806 + 4682 + .3152) 1.50 (2.459) $8.68/yd? Cost of paved road 6(0.25) + 6 (0.15) + 2 (0.75) = $8.90 =I, Total present worth =I, + 0.75 (PW) = 3.90 + 0.75(.4682) = $4.25/yd?NONSURFACED ROADS VERSUS PAVED SURFACES 217 For a roadway 6 meters (19.7 ft) Gravel total cost Roadway (3.68)(.886)(6)(1000) = $18,458/km RUC = 13,428 $31,881/km Paved road total cost Roadway (4.25)(.836)(6)(1000) = $21,318 RUC = 9,635 $30,953/km For this case the paved surface is a little more economical than the gravel surface because of the running costs of the vehicles. Recall routine costs were not considered. For this particular example, the difference in costs is so small that factors other than economic would probably govern the choice of design. OPTIMUM STAGE CONSTRUCTION ‘The planner must decide on the most economical period for staging of con- struction, Many possibilities present themselves and the most economical design depends upon the relative costs of the various pavement components as well as the length of time proposed for staging in construction. Figure 6.5 shows results of an analytical study of the optimum (least-cost) initial design service life of pavement surfaces as a function of traffic. The data in Figure 6.5 were obtained by assuming a variety of design conditions and using the thickness criteria and calculating cost data for these conditions. ‘The analysis shown in Figure 6.5 was conducted with and without considera- tion of additional road user costs which result from the resurfacing operations. Further, the analysis assumes that all stages are equal in length of time to the initial stage. ‘The optimum design interval for resurfacing is seen to be dependent upon interest rates that are considered in the analysis. For low traffic volumes, the staging interval that results in least cost is generally 10 years or less depending upon anticipated traffic growth and subgrade strength. For high traffic the num- ber of years is much higher. Interest rate on the investment has great effect. Data shown in Figure 6.5 can be used as a guide for establishing staging pro- grams, but for specific cases, equation 6.12 should be used and alternate designs evaluated as demonstrated in the illustrative example computations. For plan- ning purposes, the engineer can make an alternate cost analysis for various de- signs and from this make a reasoned judgment of the most economical design to adopt for any specific locality. ‘This type of analysis can be made only if the strength values of the materials at hand and an estimate of the anticipated traffic are known. NONSURFACED ROADS VERSUS PAVED SURFACES Decisions relative to adoption of a paved surface as compared to gravel sur- faces depend upon many factors including nuisance from dust, maintenance218 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS. 20 1 T T T Subgrade CBR = 2% Subgrade CBR = 11% Traffic growth = 2% Traffic growth = 2% 15 A fa Wy 10 5 = 20 1 T T Subgrade CB Subgrade CBR = 11% Traffic growt Traffic growth = 6% 18h ‘a 4 bE 0 wi ty hy , y Ww y 10 tj a 20 i Subgrade CBR Pest] on =N& HI Traffic growth = oe Traffic growth = 10% 1s F 0 uptimun initial design life of pavement surface (yr) 1 EY 4 4 EZ T i 1 1 10° 10% 10° 10° 108 10 10° 10° Initial yeerly equivalent 18-kip, single-axle Initial yearly equivalent 18-kip, single-axle load applications load applications Figure 6.5. Optimum initial design service life of pavement surface as a function of initial yearly equivalent 18-kip, single-axle load applications. (Flexible pavements.) costs, and road user costs. Figure 6.6 shows an analysis made for a road in which the present worth cost for a gravel surface was compared to the present worth cost for a paved surface. For this particular example, the break-even point (where each surface had equal average annual cost) was approximately 180 vehicles per day. This is but one example; the decision for a given locality must be made after a careful analysis of maintenance and road user costs for the conditions at hand. Road user costs can be determined utilizing data in Tables 6.8 through 6.5. Maintenance costs on gravel surfaces depend upon climate of the area as much as any other single factor. In areas of high rainfall and where the road bed is subjected to capillary action, the gravel surface may deteriorate rapidly. In relatively arid climates, the gravel surface may last a longer period of time, but the surface may be readily lost due to dusting under the action of traffic. Oglesby and Altenhofen (13) have suggested that the break-even point for gravel as opposed to paved surfaces is in the vicinity of 100 vehicles per day although they recognize that this is dependent upon many factors and that it varies considerably from locale to locale.PROBLEMS 219 240,000 200,000 +- 160,000] 120,000 80,000 | Present worth after 10 years (Gollars per kilometer) & 0 100 200 300 400 500 600 700 800 900 1000 Initial ADT Figure 6.6, Example of cost of gravel and paved surface. SUMMARY, ECONOMIC ANALYSIS Data appearing in previous paragraphs of this chapter have suggested tech- niques for performing planning surveys and making an economic analysis of the data. All designs, whether they be for the pavement structures or drainage struc- tures depend in large part upon the ability of the engineer to predict conditions at some future date. Therefore, it is essential that due consideration be given to obtaining data throughout the life of the structure and to keeping accurate records of the performance of the structure in light of all of the factors that affect the performance. The need for keeping accurate cost records cannot be overemphasized. Perhaps the most tenuous factor to be considered in economic analysis is that regarding methods for estimating routine maintenance costs. Methods for estimat- ing routine maintenance developed for an area may or may not be applicable to other locations depending upon many factors. It should be emphasized that the economic analysis is only as good as the input of data that are used. The need for selecting tentative design values that are realistic is obvious. PROBLEMS 6.1, The unit costs of materials are as follows: a. Asphalt surface $3740/mile/12-ft lane/in. 6, Base $1415/mile/12-ft lane/in. ¢. Subbase $1050/mile/12-ft lane/in. d, Surface treatment $3000/mile/12-ft lane/layer ¢. Seal coat $2175/mile/12 ft lane/layer Two alternates are as follows: 1, 12-inch subbase, 6-inch base, 3-inch A.C. (20 years) 2. 10-inch subbase, 6-inch base, single surface treatment initial single surface treatment at 5 years single surface treatment at 10 years single surface treatment at 15 years Assume 10 percent return on investment and zero salvage, and compare alternates.220 ECONOMIC FACTOR, DESIGN STRATEGIES, SYSTEMS ANALYSIS 6.2, Recalculate Example No. 3 assuming the same costs, and distribution of traffic, but the initial ADT is 500 vpd. 6.3. Compare the alternates of Example No. 1, but use an interest rate of 3 percent per year. SELECTED REFERENCES 1. American Association of State Highway Officials, “AASHO Interim Guide for the Design of Flexible and Rigid Pavement Structure,” (two reports), AASHO Committee on Design, 1973. 2. American Association of State Highway Officials, “Road User Benefit Analyses for Highway Improvements,” AASHO Committee on Planning and Design Policies, 1959. Asphalt Institute, “Asphalt in Pavement Maintenance,” Manual Series No. 16, 1967. Baldock, R. H., “The Annual Cost of Highways,” Highway Research Board Record 12, 1963. Betz, Mathew, J., “Highway Maintenance Costs—A Consideration for Developing Areas,” Highway Research Board Record 94, 1965. 6, Curry, David A. and Dudley G. Anderson, “Procedures for Esti Air Pollution, and Noise Effects,” NCHRP Report 133, 1972. 7. DeWeille, Jan, “Quantification of Road User Savings,” World Bank Staff Occasional Papers No. 2, International Bank for Reconstruction and Development, 1966. Edwards, C. C., “Development of a Maintenance Cost Formula and Its Application,” Highway Research News, No. 16, December 1964. 9. Highway Research Board, “Maintenance Costs and Performance,” Highway Research News, 1964. 10, Landry, E. A., “Method of Allocating Ma ‘on Maintenance and Equipment. 11. Mann, Lawrence, Jr., “Predicting Highway Maintenance Cost,” Highway Research News, No. 19, June 1965. 12, Moyer, Ralph A., and Josef E, Lampe, “A Study of Annual Costs of Flexible and Rigid Pavements for State Highways in California,” Highway Research Board Record 77, 1965. 13, Oglesby, C. H. and M, J. Altenhofen, “Economics of Design Standards for Low-Volume Rural Roads,” National’ Cooperative Highway Research Program Report 63, Highway Research Board, 1969, 14, Portland Cement Association, “Maintenance Practices For Concrete Pavements,” 1954, 15, Ramjerdi, Farideh, W. L. Greceo, and Eldon J. Yoder, “A Sensitivity Analysis of Several Cost Elements of Flexible Pavements,” Third International Conference on Design of Asphalt Pavements, 1978. 16. Radzikowski, H. Board Bulletin ating Highway User Costs, tenance Funds,” Report of AASHO Committee ‘Report of the Committee on Maintenance Costs,” Highway Research 5, 195. 17, Road Research Laboratory, “The Gost of Constructing and Maintaining Flexible and Conerete Pavements over 50 Years,” RRL Report LR 256, Ministry of Transport (England), 1969, 18. Road Research Laboratory, “A Symposium on Costing the Construction and Maintenance of Road Pavements,” 1969. 19, Scrivner, F. HL, et al., “A Systems Approach to the Flexible Pavement Design Problem,” Research Report 82-11, Texas Transportation Institute, ‘Texas A & M University, 1968. 20. Smith, Gerald W., “Engineering Economy: Analysis of Capital Expenditures,” ‘The Iowa State University Press, 1968. 21. Willard, Roger H., “County Road Mainten: Board Bulletin 29, 1950. 22. Winfrey, Robley, “Economic Analysis for Highways,” International Textbook Company, Scranton, Pennsylvani: 28. Yoder, Ellon J., “Selection of Soil Strength Values for Design of Flexible Pavements,” Report to the Australia~American Educational Foundation, 1968. nce and Operation Costs,” Highway Research