PART B: Decision Making and Risk Analysis (62 marks out 100) Question B1 A large water pipeline runs beneath the City of

[answerhappygod]

Part B Decision Making And Risk Analysis 62 Marks Out 100 Question B1 A Large Water Pipeline Runs Beneath The City Of 1 (107.26 KiB) Viewed 137 times

PART B: Decision Making and Risk Analysis (62 marks out 100) Question B1 A large water pipeline runs beneath the City of Sydney and is approaching the end of its design life. The pipeline is due to be replaced in 2030, which has been timed to coincide with expected excavation works in the same part of the city. However, if the pipeline fails at any time, resulting flood damage is estimated to cost $20 million. Engineers are concerned that there is a 20% chance that the pipeline is damaged and will fail prior to replacement in 2030. They have suggested that major reinforcement works be undertaken immediately to protect the pipeline until it can be replaced. These reinforcement works would cost $5 million and reduce the chance of pipeline failure to 5%. The City of Sydney has received a quote from a pipeline inspection company that can inspect the condition of the pipeline using a pipe inspection camera. The inspection work will cost $2 million, but it is not guaranteed that it will successfully detect damage which may be present. The pipeline inspection company state that if the pipeline has been damaged in a way that would cause it to fail, there is a 75% chance that the camera will detect that damage. However, there is also a 10% chance that the camera inspection might incorrectly conclude that significant damage has occurred when it has not. a) Draw the decision tree for this situation (5 marks) b) Determine the remaining required probabilities and mark clearly on your tree (15 marks) c) Determine the best course of action to follow, showing and explaining your reasoning (5 marks) d) Determine the true value of the camera inspection (7 marks) [32 marks]