Question 2. (30 marks) *This is a hypothetic question motivated by industry reality. Many of the names and organizations

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Question 2 30 Marks This Is A Hypothetic Question Motivated By Industry Reality Many Of The Names And Organizations 1 (58.8 KiB) Viewed 37 times

Question 2 30 Marks This Is A Hypothetic Question Motivated By Industry Reality Many Of The Names And Organizations 2 (71.73 KiB) Viewed 37 times

Question 2 30 Marks This Is A Hypothetic Question Motivated By Industry Reality Many Of The Names And Organizations 3 (79.75 KiB) Viewed 37 times

Question 2. (30 marks) *This is a hypothetic question motivated by industry reality. Many of the names and organizations in the question are composed for examination purpose only. With the development of vertical take-off and landing aircraft, urban air mobility (UAM) services are being considered in many cities. For example, Joby Aviation tested a series of air taxi flights over San Francisco Bay. Volocopter also tried out services in Singapore. Some analysts argued that such services would have a bright future, because it possesses some competitive advantages over traditional helicopter operations. For example, with the promises of incorporating unmanned operations, the operation costs would be lower because there is no need to pay high pilot salaries. The new generation of aircraft can be more environmentally friendly because the engines are of lower noise and produce no air pollution. These are important benefits because it is easier to establish landing and take-off infrastructures (i.e. "airport" for such aircraft). Hong Kong is also looking into the possibility of introducing such services. For example, it can be an attractive option for passengers commuting between central and the airport. In the long term, such services may be extended to the whole Greater Bay Area. Source: Joby aviation. Source: Volocopter. However, safety is a concern to be addressed, because it is difficult to precisely predict the operation performance of services yet to be introduced in large scale. Johnson Ng is a consultant in a planning firm based in the City of Southernshore, and a strong believer of UAM. He believes such services can be more quickly adopted in Southernshore, if it can be shown that the safety performance of existing transport services can be improved with UAM, rather than to prove that UAM is safer than helicopters. He obtained some "unofficial" data from friends and internet search, so that he could do some simple cost and benefit analysis using the information bala
below: . It is estimated that about 20,000 car trips are made each day between the airport and the city center. The chance of major car accident in the city is 2 accidents per 1×10 trips, with 2 persons killed in each major accident on average. The car related asset damage is US$0.2 million. • Johnson estimates that about 5% of the car trips can be replaced by the same number of UAM trips (i.e. 1,000 daily aircraft movements), because UAM aircraft being developed have similar carrying capacity as cars. The UAM service is expected to be safer than car, with only 1 major accident per 1x10 trips (aircraft movements). However, on average 4 passengers would lose their lives in each major UAM accident, and aircraft related damage is USS0.5 million. The UAM system planned, including landing/take off infrastructure and 100 aircraft, will cost US$100 million to install, and USS 10 million to operate each year. The system is expected to be entirely replaced after 10 years. According to the current safety regulation, a fatality rate below 1 *10* per trip / movement is acceptable. Fatality rate below 1×10 is tolerable, abovel x10 is regarded as not tolerable. The Disproportion Factor for fatality in the tolerable region is 5, and in the acceptable region is 1. The monetary cost/damage of one fatality is SUS 5 million. (a) Based on the available information obtained by Johnson, conduct a cost-and-benefit study for the proposed UAM project. Report the benefit-to-cost ratio, and briefly describe the calculation process. For simplicity, there is no need to convert future costs and benefits to present value (i.e., no need to consider discount rates). (15 marks) Provide your answers below: The benefit-to-cost ratio of the proposed UAM project is: Briefly describe your calculation process (you will get most of the points if your calculation process is correct, even if the final numbers are not correctly computed). One ISE3016 student David concludes that making the decision of whether to introduce UAM based on the above calculations can be hugely misleading. He argues that UAM not only increases safety. but also offers other benefits such as convenience, passenger time saving, pollution and congestion reduction. Therefore, Johnson's calculation of benefit-to-cost ratio is significantly underestimated. However, his classmate Jessica disagrees. She argues that Johnson's calculation doesn't consider other major safety risks such as aircraft crashes on high-rise buildings in the city center, would lead to hugely costly disasters. After hearing these comments, Johnson feels that both David and Jessica raised some good points. However, these comments may not be sufficient for practical decision making. There are too many uncertainties associated with a service yet to be
rates). (15 marks) Provide your answers below: The benefit-to-cost ratio of the proposed UAM project is: Briefly describe your calculation process (you will get most of the points if your calculation process is correct, even if the final numbers are not correctly computed). One ISE3016 student David concludes that making the decision of whether to introduce UAM based on the above calculations can be hugely misleading. He argues that UAM not only increases safety, but also offers other benefits such as convenience, passenger time saving, pollution and congestion reduction. Therefore, Johnson's calculation of benefit-to-cost ratio is significantly underestimated. However, his classmate Jessica disagrees. She argues that Johnson's calculation doesn't consider other major safety risks such as aircraft crashes on high-rise buildings in the city center, which would lead to hugely costly disasters. After hearing these comments, Johnson feels that both David and Jessica raised some good points. However, these comments may not be sufficient for practical decision making. There are too many uncertainties associated with a service yet to be introduced. Johnson concludes that a better analysis needs to take uncertainties into consideration. (b) Provide your comments on the views of David and Jessica. You should indicate whether Johnson's calculation overestimates or underestimates the benefit-to-cost ratio. If you believe you cannot tell based on information available, explain what additional information should be obtained, and how such information can be used to help your decision (10 marks). Provide your comments and recommendation on Johnson's view on uncertainty. If you agree there is significant uncertainty, suggest how the relevant safety decisions can be made (5 marks).