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Highways Decision Making ToolsHDM Tools

EBM-32 Version 1.0

Expenditure Budgeting ModelFor 32 Bit Personal Computers

February, 1999

Rodrigo Archondo-Callao

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This report presents the Expenditure Budgeting Model (EBM-32) prepared by RodrigoArchondo-Callao. The EBM-32 Model is a modified version of the ExpenditureBudgeting Model (EBM ) developed by Thawat Watanatada and others, The World Bank.

Although the EBM-32 Model does not require any other program to be used in order toperform budget optimizations, being a stand alone program, it is well suited to be usedwith the Highways Design and Maintenance Standards Model (HDM-III) and the HDMManager, the Highway Development and Management Model (HDM-IV), and PavementManagement Systems.

Copyright 1999Rodrigo Archondo-Callao

All rights reservedManufactured in the United States of AmericaFirst printing February 1999

EBM-32 is designed for use on 32 bit personal computers running Windows 95, 98, andNT4.0. It requires a hard disk of 20 megabytes and minimum installed memory of 16 MB.

The author makes no representations or warranty with respect to the EBM-32 Model. Theuser assumes all risk for the installation and use of, and results obtained from, theprogram. The author shall not be liable for any error contained in the program or in thesupporting manual or documentation supplied with the program or for incidental orconsequential damage resulting from furnishing, performance, or use of the program.

Although every effort has been made to test EBM-32 and ensure its accuracy, the authoris not in a position to provide user support.

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The EBM and EBM-32 Models

The Expenditure Budgeting Model (EBM-32) is a customized enhanced version of theExpenditure Budgeting Model (EBM) included in the 1989 release of the World Bank's

Highway Design and Maintenance Standards Model (HDM-III). The EBM model, aproduct of collaboration between the World Bank's Transportation Department andEconomic Development Institute (EDI), is an analytical tool for optimizing multiyearprograms of expenditures under multiple budgetary and other resource constraints. For agroup of projects and a series of feasible project-alternatives, the EBM is an optimizationprogram used to select, under budgetary constraints, for each project an alternative thatmaximizes the net benefits for the group of projects.

EBM-32 is customized to analyze highways investments or maintenance projects (e.g.,maintenance, construction, reconstruction projects) that are subject to two budgetaryconstraints: (a) capital expenditures, and (b) recurrent expenditures. EBM-32 isparticularly useful when used with the HDM-III and the HDM Manager programs or theHighway Development and Management Model (HDM-IV), because it reads the projectdata generated by these programs. If EBM-32 is used with these programs, each projectrepresents a road to be improved or maintained; or a homogeneous road class that is partof a representative matrix used to analyze a road network.

EBM-32 main enhancements in relation to EBM are the capability to handle up to 400projects with each project having 17 project-alternatives (EBM can handle 50 projectswith 5 alternatives each), the capability to export the results to Excel, the inclusion of afront-end/back-end Excel workbook, and the possibility to link EBM-32 to PavementManagement System. The differences between EBM and EBM-32 are given in Table 1.

Table 1 - The EBM and EBM-32 Models

EBM EBM-32

Maximum number of projects 50 400Maximum number of alternatives 5 17Maximum number of years 20 20Maximum number of budget periods 20 12Maximum number of resources 3 2Default resource 1 name RES1 CAPITALDefault resource 2 name RES2 RECURRENTImproved optimization report No YesQuicker reading of HDM output files No YesQuicker reading of simplified budget problem No YesOptimizations in batch mode No YesDisplay optimization report No YesSave optimization report No YesPrint optimization report No YesExport optimization report to Excel No YesAutomatic linkage with a PMS system No YesExcel front-end/back-end workbook No Yes

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Stores roughness, traffic, vehicle operating costs No Yes

This manual presents the EBM-32 description, the program installation, the programcommands, and two demonstration runs.

The EBM-32 Model

EBM-32 is an optimization program used for selecting an optimal set of project-alternatives for a series of projects under multi-period budget constraints. EBM-32 solvesthe problem described below.

First, you define a set of up to 400 projects (e.g., road maintenance, construction,widening projects). Each project contains up to 17 mutually exclusive project-alternatives. Each project-alternative has annual values (up to 20 years) of economic costsand benefits relative to some base alternative and annual amounts of the two resourcesneeded to implement the alternative (financial capital and financial recurrent resources).

All this information constitutes the project data.

Next, you define up to twelve budgetary periods. For example, if your analysis period is20 years, you could define two budgetary periods: (a) the initial period (4 years), and (b)after the initial period (16 years); or you could define five four-year budgetary periods.Next, you enter one budgetary constraint per budgetary period and type of resourceconstraint (capital or recurrent), and the discount rate used to compute present values.The budgetary periods, the budgetary constraints, and the discount rate constitute theproblem data.

Finally, when you give the optimization command, EBM-32 examines the resources

consumed and the NPV produced from the implementation of each project-alternative.Within the constraint that it must choose only one alternative for each project, theprogram selects the group of alternatives that produces an optimal (maximum) total NPVfor all projects within the resource constraint limits for the defined budgetary periods.This is the optimization process.

In addition, the program allows pre-selection of a particular project-alternative for anyproject to be part of the final solution. The program then selects alternatives for theremaining projects to produce the optimal NPV with the remaining uncommittedresources.

The project data is stored in a text file in one of the following formats: a) a free format

data file that contains annual values of economic costs, economic benefits, and financialresources for all project-alternatives, b) a simplified fixed format data file that containsonly the present values of economic net benefits and financial resources for all project-alternatives, c) an HDM-III or 1995 HDM Manager generated data file that contains theeconomic net benefits and financial resources information in a fixed format file, and d) anHDM-IV or 1999 HDM Manager generated data file that contains the economic netbenefits, financial resources, roughness, traffic, and vehicle operating costs information ina fixed format file. Therefore, you can create the project data file (free format or

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simplified fixed format) using a text editor or you can use the project data files created bythe HDM programs.

The project data is defined only once, while the problem data is defined differently foreach desired budget scenario to be analyzed. Consequently, the project data is stored in atext file before EBM-32 is executed and it is read once by EBM-32. The problem data,however, is defined interactively (i.e., on-line) so it can be changed repeatedly. AfterEBM-32 performs an optimization, you have the option of displaying, printing, saving, orexporting to Excel the optimization report. If you wish, you can then change the problemdata (for example to change the budgetary constraints or the discount rate) and performanother optimization. EBM-32 may be represented as shown in Table 2.

Table 2 - Road Network under Budgetary Constraints

ROAD 1 ROAD 2 ROAD 3 ROAD 4 ROAD 5

Possible ALT0 ALT0 ALT0 ALT0 ALT0maintenance ALT1 ALT1 ALT1 ALT1alternatives ALT2 ALT2 ALT2 ALT3

ALT3 ALT3

EBM-32 solution ALT2 ALT2 ALT0 ALT3 ALT3with no budgetaryconstraints

EBM-32 solution ALT2 ALT1 ALT0 ALT2 ALT1for moderate budgetaryconstraints

EBM-32 solution ALT1 ALT0 ALT0 ALT1 ALT0for severe budgetaryconstraints

Installing EBM-32

To install EBM-32 on your hard disk, follow the steps below:

1. Insert the program disk in drive A:

2. At the DOS prompt or Windows Start & Run prompt, enter the command:

A:INSTALL

The installation program expands the EBM-32 compressed files located on the system diskand copies them into a directory called EBM-32. The files supplied on the system disk arethe following:

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EBM-32.EXE EBM-32 programEBMHELP.DAT EBM-32 help fileEBMSTD.TXT EBM-32 standard options fileREAD.ME EBM-32 latest newsTESTHDM.EBM EBM-32 HDM-III format demonstration data fileTESTNETW.NET EBM-32 HDM-IV format demonstration data fileTESTLOAD.TXT EBM-32 simplified fixed format demonstration data fileTESTREAD.TXT EBM-32 free format demonstration data fileEBM-32.DOC EBM-32 documentationEBM-32.XLS EBM-32 Excel front-end/back-end

Using EBM-32 Interactively

You can use EBM-32 interactively or use an Excel front-end/back-end workbook toexecute EBM-32 within Excel.

To start the program interactively, follow the steps below.

1. Change to the EBM-32 directory using the Windows Explorer.

2. Run the EBM-32 program by clicking the file:

EBM-32.EXE

If you wish you can create a shortcut to EBM-32.EXE in Windows. If EBM-32 is loadedsuccessfully, it displays the logo, and the ==> prompt. At this prompt, enter your desiredcommand. After checking your input, the program either performs the required action and

returns to the ==> prompt, for a new command, or gives an error message and returns tothe ==> prompt. To get help, enter the command HELP and to exit the program, enterthe command BYE.

The Commands

The EBM-32 commands are format free. That is, additional spaces between names andnumbers do not matter. An input line (72 characters long) is composed of names,numbers, and delimiters, defined as follows:

Names are defined as a string of letters (A-Z) and/or digits (0-9). Note that a name

must begin with a letter and not with a digit.

Numbers are defined as a string of digits (0-9) with or without a decimal point andwith or without a minus sign.

Delimiters are defined as a space, a comma, or a hyphen. One or more of thesemust be used to separate one name or number from another.

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Names are used for commands, project names, and alternative names. Only the first fourcharacters of a name are significant. Hence, all project and alternative names are only fourcharacters long and all commands can be reduced to the first four characters of each word.Note that a name must begin with a letter and not with a digit. Table 3 lists the EBM-32commands.

Table 3 - EBM-32 Commands

COMMAND ACTION

READ Read project data in free format text fileLOAD Read project data in simplified fixed format

text fileHDM Read project data in a HDM-III format

text fileNETWORK Read project data in an HDM-IV format

text fileSTANDARD OPTIONS Read problem data from a text fileDISCOUNT RATE Define discount rateTIME PERIODS . Define budgetary periodsCAPITAL .. Define capital resourcesRECURRENT .. Define recurrent resourcesPRESELECT Pre-select project-alternativesOPTIMIZE Perform the optimizationDISPLAY Display last optimization reportOUTPUT Print last optimization reportFILE Save last optimization reportEXPORT Export last optimization reportHELP Display help screensBYE Exit the program

The Project Data

The project data consists of a set of projects that are composed of project-alternatives thatcontain annual values for economic costs and economic benefits relative to some base caseand the resources necessary to implement the project-alternative (capital and recurrentfinancial expenditures). You should store the project data in a text file in one of thefollowing possible formats:

a) Free Format Data File. Each project-alternative can have up to 20 years ofeconomic costs, economic benefits and financial resource requirements (capital andrecurrent). The information stored in this file is free format. That is, the numberof spaces between names and numbers does not matter.

b) Simplified Fixed Format Data File. Each project-alternative contains only onevalue that represents the net benefits of implementing the alternative (net presentvalue) and, similarly, it contains only one value that represents the financial capital

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resource requirements and another value that represent the financial recurrentresource requirements (present values of the capital and recurrent resources). Thisfile has a fixed format. That is, the position of the names and values does matter.

c) HDM-III Format Data File. Each project-alternative has up to 20 years ofeconomic net benefits and financial capital and recurrent resource requirements.This file is created by the HDM-III or 1995 HDM Manager programs and has afixed format.

d) HDM-IV Format Data File. Each project-alternative has up to 20 years ofeconomic net benefits, financial capital and recurrent resource requirements,roughness, daily traffic, and vehicle operating costs. This file is created by theHDM-IV or 1999 HDM Manager programs and has a fixed format.

Free Format Data File

A free format data file is a text file created with a text editor. A maximum of 400 projectscan be defined and each project can consist of up to 17 mutually exclusive alternatives.To each project and to each project-alternative, you give a four-character name (e.g.,PV01, ALT0) and annual values are entered in rows. An example of a free format projectdata file is given in Figure 1.

Figure 1 - Free Format Data File Sample

PROJECT PV01 MAINTENANCE

ALTERNATIVE ALT0

ANNUAL VALUES

1 0. 0. 0.000 1.396

2 0. 0. 0.000 1.3963 0. 0. 0.000 1.436

4 0. 0. 0.000 1.729

ALTERNATIVE ALT1

ANNUAL VALUES

1. 60. 0.000 75.000 1.396

2. 0. 33.456 0.000 1.396

3. 0. 68.594 0.000 1.436

4 0. 19.204 46.598 1.396

PROJECT PV02 MAINTENANCE

ALTERNATIVE ALT0

ANNUAL VALUES

1 0. 0. 0.000 1.182

2 0. 0. 0.000 1.182

3 0. 0. 0.000 1.2104 0. 0. 0.000 1.242

ALTERNATIVE ALT1

ANNUAL VALUES

1. 70. 0.000 88.000 1.182

2. 0. 7.275 0.000 1.182

3. 0. 7.716 0.000 1.229

4 0. -3.761 26.606 1.182

The data is specified as follows:

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PROJECT MAINTENANCEALTERNATIVE ANNUAL VALUES

..

ALTERNATIVE ANNUAL VALUES

.. ..

ALTERNATIVE ANNUAL VALUES

..

PROJECT MAINTENANCEALTERNATIVE ANNUAL VALUES

Each alternative has a four-character name and up to 20 years of annual data. The annualdata consist of economic costs, economic benefits, financial capital resources and financialrecurrent resources. Economic costs and benefits are relative to some base, which may ormay not be present as an alternative.

Note that in the project data file shown in Figure 1 there are two maintenance projects(PV01 and PV02), each project has two maintenance alternatives (ALT0 and ALT1), andeach maintenance alternative has data for four years. Note also that the number of spacesbetween names and numbers does not matter.

READ Command

The READ command instructs the program to read the project data from a Free FormatData File. EBM-32 analyzes each line on the file and collects valid information. Followthe steps below:

1. Enter the READ command.

READ

2. Enter the filename of the file you want to read.

After you enter a valid filename, EBM-32 loads all project data.

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Simplified Fixed Format Data File

A simplified fixed format data file is a text file created with a text editor. You can storethe project data in a simplified fixed format data file if you want to solve a simpleoptimization problem defined as follows:

- You define up to 400 maintenance projects

- You define up to 17 maintenance alternatives per project

- You provide the present value of net benefits (NPV) of each project-alternative

- You provide the present value of the resources required (capital and recurrent) toimplement each project-alternative

In this case, you enter the present value of the net benefits and the required resources, not

the annual values as in the free format file. Therefore, only one budgetary period isdefined. An example of a simplified fixed format data file is given in Figure 2.

Figure 2 - Simplified Fixed Format Data File Sample

PRJ1 ALTA 4.000 2.000 0.000

ALTB 7.000 5.000 0.000

ALTC 8.000 7.000 0.000

PRJ2 ALTA 3.000 1.000 0.000

ALTB 6.000 3.000 0.000

ALTC 8.000 5.000 0.000

| | | | |

1 4 9 20 30 40Columns

Information in a simplified fixed format data file is defined as follow:

Project Alternative PV of PV of PV of Name Name Net Benefits Capital Recurrent

(NPV) Resources Resources

Columns Columns Columns Columns Columns1 to 4 6 to 9 11 to 20 21 to 30 31 to 40

PRJ1 ALT1 bb.bbb cc.ccc rr.rrr ALT2ALT3.ALTn

PRJ2 ALT1ALT2ALT3.

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ALTnPRJ3 ALT1

.

..PRJm

where PRJx is the project name, ALTx is the alternative name, bb.bbb are the net benefits,cc.ccc are the capital resources, and rr.rrr are the recurrent resources.

LOAD Command

The LOAD command instructs the program to read the project data from a simplifiedfixed format data file. Follow the steps below:

1. Enter the LOAD command.

LOAD



HDM-III Data File

The HDM-III and 1995 HDM Manager programs create EBM-32 ready HDM-III data

files. These files are similar to the free format data files, but the annual economic costcolumn is always zero and the economic benefits column represents net economic benefits.That is, positive values represent benefits and negative values represent costs.

An HDM-III data file can be read using the READ command but this procedure takestime because the READ command considers the file a free format file and has to examineand break-up each line. The fastest method of reading an HDM-III data file is to use theHDM command.

HDM Command

The HDM command instructs EBM-32 to read the project data from an HDM-III datafile. Follow the steps below:

1. Enter the HDM command.

HDM


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HDM-IV Data File

The HDM-IV and 1999 HDM Manager programs create EBM-32 ready HDM-IV datafiles. These files contain, for up to 20 years, economic net benefits, financial capital andrecurrent resources, roughness, daily traffic, and vehicle operating costs in a fix format.To read these files use the NETWORK command.

NETWORK Command

The NETWORK command instructs the program to read the project data from an HDM-IV data file. Follow the steps below:

1. Enter the NETWORK command.

NETWORK



The Problem Data

The problem data consist of budgetary periods (up to twelve), budgetary resourceconstraints (one per resource type and budgetary period), a discount rate for computingpresent values, and pre-selected project-alternatives (if any).

Budgetary Periods

The budgetary periods (up to twelve) are specified in the following form:

TIME PERIODS

The years may be calendar years or relative years. For example:

TIME PERIODS 1-4 5-20 Defines twobudgetary periods

TIME PERIODS 1981-1981 1982-1983 1984-1988 1989-1995 Defines fourbudgetary periods

Time periods must be specified before entering resource constraint levels, and timeperiods must neither overlap nor leave any gap between successive periods. For example,the following time periods are invalid:

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TIME PERIODS 1981-1985 1984-1988 Overlappingyears

TIME PERIODS 1981-1985 1987-1988 Gap left in theperiods

In case you loaded the simplified fixed format data file, you do not need to specify theTIME PERIODS command. The program automatically assigns: TIME PERIODS 1-1.

Budgetary Resource Constraints

The commands for entering budgetary resource constraint are the following:

To define capital budgetary constraints

CAPITAL . . . .

To define recurrent budgetary constraints

RECURRENT . . . .

where n is the number of defined budgetary periods. For example:

CAPITAL 40 500 Defines two capitalconstraints: 40 for thefirst time period and

500 for the secondtime period

RECURRENT 10 25 30 Defines threerecurrent constraints:10 for the first timeperiod, 25 for thesecond time periodand 30 for the thirdtime period.

Discount Rate

A discount rate is defined with the command:

DISCOUNT RATE

For example:

DISCOUNT RATE 12 Defines discount rateequal to 12%

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Pre-Selected Project-Alternatives

You can pre-select an alternative for a project to be part of the solution. To pre-select aproject-alternative use the following command:

PRESELECT

where prjname-altname is a four-letter valid project name and a four-letter alternativename separated by a hyphen (-). If more than one project alternatives are selected for thesame project, the last alternative specified will be used. Any number of projects can havepre-selected alternatives. Project-Alternatives may be continued on another line withoutre-specifying the PRESELECT command. Note that an input line is only 72 characterslong.

The Standard Options Command

You may opt to store some problem data commands that you use repeatedly in a text file

that is read whenever the STANDARD OPTIONS command is used. For example, youmay choose to define the discount rate to be 12 and to use two budgetary time periods (1-4 and 5-20), so after entering the STANDARD OPTIONS command these options willbe active.

The STANDARD OPTIONS command causes EBM-32 to read a standard options file(EBMSTD.TXT) in which you can store a standard set of commands. To use thiscommand, the file EBMSTD.TXT must be on your default directory (i.e., the EBM-32directory).

The Optimize CommandThe OPTIMIZE command causes EBM-32 to select project-alternatives that produce theoptimal (maximum) NPV for the set of projects, given the resources required for eachproject-alternative and the resource constraints for each budgetary period. Theoptimization cannot be performed unless the following conditions are met:

1) At least one project, one time period, and one resource constraint have been defined.

2) The time periods are properly defined (without overlapping periods or gaps betweenthe periods).

3) The resources required for the pre-selected alternatives do not exceed the resourceconstraints.

4) The minimum resources required to implement one alternative for each of the projectsdo not exceed the resource constraints.

5) The budget constraint for each resource (capital or recurrent) and time period is greaterthan zero.

To perform the optimization enter the command:

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OPTIMIZE

After EBM-32 performs the optimization, the program displays continuously theoptimization report that is, without pausing when the screen is full. This is done onpurpose to allow the program to perform a series of optimizations unattended. AfterEBM-32 displays the optimization report, you have the option of displaying it again (thistime with pauses) using the DISPLAY command. To examine the optimization report,you have the following options:

- Display the report- Print the report- Save the report- Export the report

A sample of an optimization report is given in Figure 3.

Figure 3 - Optimization Report Sample

EBM-32 SOLUTION (METHOD TOTE) AT 12.0 % DISCOUNT

PROJECTS 4 PERIODS 2 RESOURCES 2 YEARS 20

ALTERNATIVE PRESENT VALUE PRESENT VALUE PRESENT VALUE

PROJECT SELECTED OF NET BENE_ OF CAPITAL OF RECURRENT

FITS (NPV) RESOURCES RESOURCES

------- ----------- ------------- ------------- -------------

IRI2 ALT3 34.354 14.146 2.804

IRI4 ALT3 104.022 64.213 2.774

IRI7 ALT3 94.849 64.213 2.774

GRAV ALT3 112.326 22.321 6.446

ALL PROJECTS 345.551 164.894 14.798

CAPITAL RECURRENT

YEAR RESOURCE RESOURCE

---- ------------ ------------

1 98.00 1.10

2 .00 1.10

3 28.00 1.10

4 .00 3.52

5 .00 3.52

6 .00 3.52

7 .00 1.32

8 .00 1.33

9 .00 1.35

10 .00 1.40

11 81.67 1.37

12 49.00 1.34

13 16.33 1.34

14 .00 1.34

15 .00 1.35

16 .00 1.37

17 .00 1.38

18 .00 1.38

19 .00 1.41

20 .00 1.43

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TOTAL TOTAL RESOURCES

BUDGETARY RESOURCES RESOURCES USED

RESOURCE PERIOD AVAILABLE USED PER YEAR

---------- ----------- ---------- ---------- ----------

CAPITAL 1 TO 4 10000.00 126.00 31.5000

5 TO 20 10000.00 147.00 9.1874RECURRENT 1 TO 4 10000.00 6.82 1.7050

5 TO 20 10000.00 26.14 1.6339

NETWORK NPV AT 12.0% = 345.55

Display Optimization Report

Use the DISPLAY command to display the last optimization report. The scroll stopswhen the screen is full. Press the key to continue.

Print Optimization Report

Use the OUTPUT command to print the last optimization report. Make sure your printeris ready before sending this command.

File Optimization Report

Use the FILE command to save (into a text file) the last optimization report. Theprogram will prompt for the filename to save the report.

Export Optimization Report

Use the EXPORT command to export to Excel or other spreadsheet the last optimizationreport. The program will prompt for the filename to save the report. The program savesthe report in a delimited with commas text file that can be imported into Excel or otherspreadsheet package. It is suggested that you should give this file a .CSV extension,because Excel recognizes .CSV as the extension of delimited with commas text files. Toimport the file into Excel, just open the file.

The delimited text file created by EBM-32 contains not only the optimization report, it

also contains for the alternative selected for each project the following useful information:

- Annual net benefits- Annual capital resources- Annual recurrent resources- Annual roughness- Annual traffic- Annual vehicle operating costs

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You can also use the TAB command to create a tab delimited text file containing the sameinformation as the comma delimited text file created with the EXPORT command.

The Print Commands

The EBM-32 program allows you to display the project data or the problem data by usingthe PRINT command.

The PRINT INPUT command displays the project data showing annual economic costs,economic benefits, and resource requirements for a given project or alternative. It canalso print a summary of the data entered for all project alternatives. The formats of theprint commands are:

PRINT INPUT Prints the annual valuesfor the project-alternativesprj1-alt1 and prj2-alt2.

PRINT INPUT ALL Prints all alternatives for project prj1.

PRINT INPUT ALL Prints all the project for allproject-alternatives.

PRINT INPUT SUMMARY Prints a summary of inputdata for all the projects.

The PRINT PROBLEM command displays the project data as they are used in theoptimization, i.e., all annual data are aggregated by budget period and NPV, computedusing the current discount rate. It can also print a summary of the problem data includingthe resource constraints, discount rate, and pre-selected project-alternative choices. ThePRINT PROBLEM command works the same way as the PRINT INPUT command,except that instead of printing annual values it prints out the total resources required foreach time period and the computed net present value.

The Help Command

The HELP command provides on-line description of EBM-32 commands. For example:

HELP Displays the help screens

The Bye Command

The BYE command terminates the EBM-32 session. For example:

BYE Quits EBM-32

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EBM-32 Interactively Demonstration Runs

First Demonstration Run

To execute the first EBM-32 demonstration run, follow the steps below:



EBM-32.EXE

EBM-32 displays the logo and the ==> prompt appears on the screen.

3. Start off by reading in the project data stored in TESTREAD.TXT. Use the READcommand:

==>READ

The program prompts:

Enter filename =>

Enter:

TESTREAD.TXT

The program displays the message:

Reading file: TESTREAD.TXT

After the file is read, the program displays:

End reading file. 0 errors found.

The TESTREAD.TXT file contains project data for four road maintenance projects, eachproject has annual values (twenty years) for four possible alternatives. Note that since theTESTREAD.TXT file was created by HDM-III, you could have used the HDM commandto read the file. If you had used the HDM command, the reading procedure would havetaken less time.

4. To display a summary description of the current project data, enter:

==>PRINT INPUT SUMMARY

The program displays the following report:

ANNUAL DATA : SUMMARY

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FIRST LAST YEARS

PROJECT TYPE ALTERNATIVE YEAR YEAR OF DATA

------- ----------- ----------- ---------- -------

IRI2 MAINTENANCE ALT0 1- 20 20

ALT1 1- 20 20

ALT2 1- 20 20

ALT3 1- 20 20IRI4 MAINTENANCE ALT0 1- 20 20

ALT1 1- 20 20

ALT2 1- 20 20

ALT3 1- 20 20

IRI7 MAINTENANCE ALT0 1- 20 20

ALT1 1- 20 20

ALT2 1- 20 20

ALT3 1- 20 20

GRAV MAINTENANCE ALT0 1- 20 20

ALT1 1- 20 20

ALT2 1- 20 20

ALT3 1- 20 20

Note that the project names are: IRI2, IRI4, IRI7, and GRAV, and the alternatives namesfor each project are: ALT0, ALT1, ALT2, ALT3. Once all the project data is loaded, thenext step is to define the problem data interactively.

5. Define the discount rate:

==>DISCOUNT RATE 12

6. Define two budgetary periods. One for the first 4 years and the other for the following16 years.

==>TIME PERIODS 1-4 5-20

7. Enter the financial capital and recurrent resource constraints for each time period. Forthe first optimization, enter very high constraints inputs to obtain the solution for anunconstrained budget scenario:

==>CAPITAL 10000 10000

==>RECURRENT 10000 10000

8. Before doing the optimization, display the current problem data.

==>PRINT PROBLEM

The program displays the following report:

PROBLEM DATA : SUMMARY

----------------------

RESOURCE CONSTRAINT

NAME PERIOD LEVEL

---------- --------- ----------

CAPITAL 1- 4 10000.00

5- 20 10000.00

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RECURRENT 1- 4 10000.00

5- 20 10000.00

DISCOUNT RATE = 12.0 %

PREDETERMINED

PROJECT CHOICE ALTERNATIVES DEFINED

------- ------------- --------------------------------------------------IRI2 ALT0 ALT1 ALT2 ALT3

IRI4 ALT0 ALT1 ALT2 ALT3

IRI7 ALT0 ALT1 ALT2 ALT3

GRAV ALT0 ALT1 ALT2 ALT3

9. Issue the command to perform the optimization.

==>OPTIMIZE

The program produces the following optimization report.






------- ----------- ------------- ------------- -------------

IRI2 ALT3 34.354 14.146 2.804

IRI4 ALT3 104.022 64.213 2.774

IRI7 ALT3 94.849 64.213 2.774

GRAV ALT3 112.326 22.321 6.446

ALL PROJECTS 345.551 164.894 14.798

CAPITAL RECURRENT


---- ------------ ------------

1 98.00 1.10

2 .00 1.10

3 28.00 1.10

4 .00 3.52

5 .00 3.52

6 .00 3.52

7 .00 1.32

8 .00 1.33

9 .00 1.35

10 .00 1.40

11 81.67 1.37

12 49.00 1.34

13 16.33 1.34

14 .00 1.3415 .00 1.35

16 .00 1.37

17 .00 1.38

18 .00 1.38

19 .00 1.41

20 .00 1.43




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---------- ----------- ---------- ---------- ----------

CAPITAL 1 TO 4 10000.00 126.00 31.5000

5 TO 20 10000.00 147.00 9.1874

RECURRENT 1 TO 4 10000.00 6.82 1.7050

5 TO 20 10000.00 26.14 1.6339


Note that the program displays the optimization report without pausing when the screen isfull. To display the report with pauses give the DISPLAY command:

==>DISPLAY

If you have a printer attached, give the OUTPUT command to print the report.

==>OUTPUT

Note that for this unconstrained scenario (input constraint levels much higher thanresources needed) the best alternative for all projects is alternative ALT3, we need 126.00

capital resources in the first budgetary period to implement the solution, and that the NPVfor all projects is 345.55.

10. To find the solution for the scenario in which we have only 100 available for capitalresources in the first budgetary period, reduce the available capital to 100.

==>CAPITAL 100 10000

11. Once again, perform the optimization with the OPTIMIZE command.

==>OPTIMIZE

This time, the program produces the following optimization report:






------- ----------- ------------- ------------- -------------

IRI2 ALT3 34.354 14.146 2.804

IRI4 ALT3 104.022 64.213 2.774

IRI7 ALT3 94.849 64.213 2.774

GRAV ALT1 83.632 .000 5.366

ALL PROJECTS 316.857 142.573 13.717

CAPITAL RECURRENT


---- ------------ ------------

1 98.00 1.64

2 .00 1.64

3 .00 1.65

4 .00 1.65

5 .00 1.66

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6 .00 1.66

7 .00 1.67

8 .00 1.68

9 .00 1.71

10 .00 1.64

11 81.67 1.62

12 49.00 1.58

13 16.33 1.5714 .00 1.57

15 .00 1.58

16 .00 1.58

17 .00 1.58

18 .00 1.58

19 .00 1.59

20 .00 1.60




---------- ----------- ---------- ---------- ----------

CAPITAL 1 TO 4 100.00 98.00 24.5000

5 TO 20 10000.00 147.00 9.1874RECURRENT 1 TO 4 10000.00 6.59 1.6465

5 TO 20 10000.00 25.88 1.6173


Note that with the 100 capital constraint, the best alternatives for the GRAV project haschanged to ALT1, the NPV for all projects has decreased to 316.86, and of the availablecapital resources (100) we are using 98 to implement the solution.

12. Next, reduce the capital available in the first period to 50 and optimize again.

==>CAPITAL 50 10000

==>OPTIMIZE

The program produces the following optimization report:






------- ----------- ------------- ------------- -------------

IRI2 ALT3 34.354 14.146 2.804IRI4 ALT3 104.022 64.213 2.774

IRI7 ALT0 .000 48.935 2.761

GRAV ALT1 83.632 .000 5.366

ALL PROJECTS 222.008 127.295 13.704

CAPITAL RECURRENT


---- ------------ ------------

1 49.00 1.64

2 .00 1.64

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3 .00 1.65

4 .00 1.65

5 77.00 1.66

6 .00 1.66

7 .00 1.67

8 .00 1.68

9 .00 1.71

10 .00 1.6211 49.00 1.61

12 32.67 1.58

13 16.33 1.57

14 .00 1.57

15 .00 1.58

16 .00 1.58

17 .00 1.58

18 .00 1.58

19 .00 1.59

20 .00 1.60



RESOURCE PERIOD AVAILABLE USED PER YEAR---------- ----------- ---------- ---------- ----------

CAPITAL 1 TO 4 50.00 49.00 12.2500

5 TO 20 10000.00 175.00 10.9374

RECURRENT 1 TO 4 10000.00 6.59 1.6465

5 TO 20 10000.00 25.84 1.6150


Note that the best alternative for link IRI7 has changed to alternative ALT0 and the NPVis reduced to 222.01. Note also that in this exercise we are maintaining the recurrentresources and the capital resource in the second budgetary period unconstrained.

13. To create a file containing the last optimization report to be retieved by Excel, enterthe command:

==>EXPORT

Enter the filename with a .CSV extension:

TEST1.CSV

Later, you can retrieve this file in Excel by opening the file. This file contains theoptimization report and also the annual net benefits, capital resources, and recurrentresources. Note that if the project file was created with HDM-IV or 1999 HDM Manager

and the NETWORK option was used to read the file, the exported file would also containthe length of each project and the annual roughness, daily traffic, and vehicle operatingcosts.

14. Finally, exit EBM-32 with the command:

==>BYE

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Second Demonstration Run

To execute the second EBM-32 demonstration run, follow the steps below:



EBM-32.EXE

EBM-32 displays the logo and the ==> prompt appears on the screen.

3. Start off by reading in the project data stored in TESTLOAD.TXT. This time, use theLOAD command:

==>LOAD

The program prompts:

Enter filename =>

Enter:

TESTLOAD.TXT

The TESTLOAD.TXT file contains project data for a simplified budgetary problem. Thefile describes two maintenance projects and each project has three alternatives. For eachalternative, we define the net benefits (NPV) and the present value of capital and recurrentresource requirements. Note that in this example the recurrent resource requirements arezero. The contents of TESTLOAD.TXT is given below:

PRJ1 ALTA 4.000 2.000 0.000

ALTB 7.000 5.000 0.000

ALTC 8.000 7.000 0.000

PRJ2 ALTA 3.000 1.000 0.000

ALTB 6.000 3.000 0.000

ALTC 8.000 5.000 0.000

^ ^ ^

| | |

Net Capital Recurrent

Benefits Resources Resources

Note that the project names are PRJ1 and PRJ2, the alternative names are ALTA, ALTBand ALTC.

Since this is a simplified budgetary problem where only the present values are defined, theprogram sets the budgetary periods to one (1-1) and does not use the discount rate toperform the optimization.

4. Enter the capital constraint input for the first optimization.

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==>CAPITAL 1000

5. Optimize and display.

==>OPTIMIZE

==>DISPLAY

The following optimization report will be created:

EBM-32 SOLUTION (METHOD TOTE) AT .0 % DISCOUNT





------- ----------- ------------- ------------- -------------

PRJ1 ALTC 8.000 7.000 .000

PRJ2 ALTC 8.000 5.000 .000

ALL PROJECTS 16.000 12.000 .000

CAPITAL

YEAR RESOURCE

---- ------------

1 12.00




---------- ----------- ---------- ---------- ----------

CAPITAL 1 TO 1 1000.00 12.00 12.0000

NETWORK NPV AT .0% = 16.00

6. Reduce the capital constraint input and optimize again.

==>CAPITAL 6

==>OPTIMIZE

==>DISPLAY

EBM-32 SOLUTION (METHOD TOTE) AT .0 % DISCOUNT





------- ----------- ------------- ------------- -------------

PRJ1 ALTB 7.000 5.000 .000

PRJ2 ALTA 3.000 1.000 .000

ALL PROJECTS 10.000 6.000 .000

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CAPITAL

YEAR RESOURCE

---- ------------

1 6.00


BUDGETARY RESOURCES RESOURCES USEDRESOURCE PERIOD AVAILABLE USED PER YEAR

---------- ----------- ---------- ---------- ----------

CAPITAL 1 TO 1 6.00 6.00 6.0000

NETWORK NPV AT .0% = 10.00

Note that if you enter a capital constraint of 2, the program displays a message indicatingthat it is not possible to find a feasible solution.

7. Finally, exit EBM-32 with the command:

==>BYE

Using EBM-32 in Batch Processing Mode

You can execute EBM-32 within a Pavement Management System (PMS) or any otherprogram in batch mode. In this case, the other system creates the files needed by EBM-32, EBM-32 runs automatically, and the other system reads the results from the EBM-32output files. The steps are the following:

a) The PMS has to create the following files and place them in the EBM-32 directory.

PMS_IN.HDM with the project data in HDM-III format data file (HDM)

or

PMS_IN.NET with the project data in HDM-4 format data file (NETWORK)

and

PMS_IN.TXT with the problem data and sequence of command to execute inbatch mode

b) The PMS has to execute the EBM-32.EXE program located on the EBM-32 directorywith one of the following options:

EBM-32.EXE A to execute EBM-32 and read PMS_IN.HDM andPMS_IN.TXT automatically

or

EBM-32.EXE A B to execute EBM-32 and read PMS_IN.NET and

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PMS_IN.TXT automatically

c) EBM-32 reads the project and problem data from the corresponding input files andcreates the following output files:

PMS_OUT.TXT a text file with all the optimization results.

and

PMS_OUT.CSV a comma delimited text file with all the optimization results

d) The PMS collects the results from the EBM-32 output files.

On the problem data file, you can add the following command after each optimization tosave the results of that optimization on a comma delimited file (.CVS).

PMS xxxx

where xxxx is a four character maximum file name. For examples:

PMS out1

creates a file named out1.csv on the EBM-32 directory.

The EBM-32 front-end/back-end Excel workbook included with EBM-32 uses theseprinciples to create a front-end to EBM-32, where users enter the project and problemdata in Excel, and a back-end to EBM-32, where Excel collect collects the results of

EBM-32 and presents them on a practical manner.

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References

1. Watanatada, T., Harral, C., Paterson, W.D.O., Dhareshwar, A.M., Bhandari, A., andTsunokawa, K., The Highway Design and Maintenance Standards Model, Volume 1: Description

of the HDM-III Model, Volume 2: User's Manual for the HDM-III Model, Baltimore: JohnsHopkins University Press, 1987.

2. Archondo-Callao, R., Purohit, R.K., The Highway Design and Maintenance Standards Model,User's Guide and PC Disks., Washington, D.C.: World Bank Software, 1989.

3. Archondo-Callao, R., HDM Manager Version3.0, User-friendly Shell Environment for HDM,Washington, D.C.: World Bank Software, 1994.

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