PUB00152

• Year: 2007
• Title: Chatfield, Cherry Creek, and Bear Creek Colorado Reallocation Feasibility Study
• CWCB Section: Administration
• Author: US Army Coprs of Engineers
• Description: Chatfield, Cherry Creek, and Bear Creek Colorado Reallocation Feasibility Study
• Publications - Doc Type: Tech Report

management measure should also be included in th~ permutations. When measures and
scales are combined, the cost and output of each co~stituent part of the combination is
summed. Each combination thus has an associated ~otal cost and total output.

(3) All possible combinations of ecosystem restora#on measures and scales (which are,
in effect, all possible alternative plans) will be sortefl in terms of increasing output. This
will be done as a prelude to cost effectiveness analy~is.
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(4) Once all possible plans have been formulated aryd sorted by increasing output, the
next step will be to conduct a cost effectiveness ana~ysis. Cost effective means that, for a
particular level of output, no other plan costs less. F~rthermore, no plan yields more
output for the same or less cost. Graphing cost effeqtive plans in terms of their respective
costs and outputs can help visually display the relatipnship between the increasing
financial investment required for increasing environ~ental outputs. Each of the cost
effective plans produces its associated level of outpu:t at the least cost; no other plan can
provide as much output for the same level of investment. This is an important point to
make in ecosystem restoration evaluations, and an iQIPortant criterion in qualifying plans
for further evaluation.

(5) The next step will be to examine the efficiency of each of the cost effective plans,
which is accomplished through incremental cost analysis. In incremental analysis those
cost effective plans that are most efficient in production are identified. These plans,
known as "Best Buy" plans, provide the greatest increase in output for the least increase
in cost. They have the lowest incremental costs per upit of output. Beginning with the
"No Action" alternative, we will compute the incremental cost, incremental output, and
incremental cost per unit of incremental output adva*ing from the No Action alternative
to each successive alternative. The incremental cost i~ the additional cost incurred in
selecting one plan over another. Similarly, the incremental output is the additional output
gained in selecting one plan over another. The increIl1ental cost per unit of incre~ental
output is the incremental cost divided by the incremental output. It shows the change in
cost from No Action to each other alternative plan in ~ per unit basis.

(6) The next step will be to recalculate the incremental cost per unit Of incremental
output of implementing each remaining plan instead of the last selected plan. The same
decision rule still applies: of the remaining plans (all larger than the first Best Buy plan),
select the plan with the lowest incremental cost per unit of incremental output, then
remove from consideration (in this analytical process) any plans that provide a smaller
output level than the selected plan. This process of recalculating incremental cost per
incremental unit for each remaining plan over the last selected Best Buy plan is reiterated
until the incremental unit cost for the last remaining plan has been recalculated. The
number of iterations is dependent upon the number of plans and on the respective cost
and output data of each. The purpose of the iterative J?rocess is not to eliminate plans
from the possibility of being selected, but rather to ide,ntify those plans (and their
corresponding level of output) where there is a marked increase in production costs. By

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