Dominion Chemicals produces a wide variety of products including ammonia, chlorine, sulfuric acid, ammonium nitrate, and

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Dominion Chemicals produces a wide variety of products including
ammonia, chlorine, sulfuric acid, ammonium nitrate, and
nitrocellulose. Investors are calling for growth, and
company leadership is planning construction of a new facility near
University City. There are two architectures available
and the CEO must choose one of them in the face of significant
uncertainty. The chemicals associated with the different
facility types are very different, and each type of facility comes
with its own unique risk.
An Alpha architecture will result in construction of facility
that uses relatively benign methods and will produce comparatively
stable chemicals using techniques considered safe, both within the
industry and in the eyes of the public. Unfortunately,
the annual operating cost of such a plant is quite
expensive. In contrast, a Beta architecture costs much
less to operate, but involves more risk to people and property in
the area adjacent to the facility, and there is significant public
pressure being exerted by representatives of the Universal City
residents in opposition to construction of such a plant so close to
their homes.
Operating Costs
The annual operating cost of an Alpha plant is $90M while the
cost for a Beta plant is only $50M.
Revenue & Demand
The amount of revenue generated by the plant operations will be
influenced by the demand for its chemicals. Alpha plant
chemicals have a long and stable history of demand and revenue
which can be categorized as high, medium, or low. The
demand for either type of plant’s chemicals is partially determined
by the reputation of the facility’s architecture and its safety
record at other locations around the world. The
chemicals produced by Beta plants are necessary as starter
chemicals for other companies who produce more complex but
higher-value polymers. However, certain segments of
industry have boycotted chemicals produced at Beta plants in
response to public pressures and amidst concern over accident
rates.
The expected demand, probability of that demand, and the revenue
generated for each level of demand at each type of plant is
provided in Table 1.
Table 1: Revenue Table for Plant Type,
Demand, and Revenue
Plant Type
Demand
Probability
Annual Revenue
Alpha
High
0.4
$160M
Medium
0.5
$150M
Low
0.1
$140M
Beta
High
0.4
$140M
Medium
0.3
$135M
Low
0.3
$130M
Beta Plant Safety & Security Architecture
A Beta plant includes a state-of-the-art safety and security
system. Beta plants develop chemicals that are produced
by using catalysts to trigger reactions that lead to the creation
of new chemicals. These chemical reactions can release
substantial quantities of heat, resulting in rapidly rising
temperatures and system pressures. If the pressures
climb high enough, a catastrophic structural failure is
possible. This would release dangerous chemicals into
the atmosphere, threatening the lives of local residents and
causing damage to property.
Beta Safety System
The Beta Plant provides safety services by implementing two
critical functions that are executed in sequence. The
first function is a temperature regulating function and the system
used to deliver that function is designed to maintain temperatures
within limits prescribed through regulations for the
industry. The second function is a pressure regulating
function and is designed to maintain stable pressures within all
chemical vessels throughout the facility. The cooling system
functions must be enabled prior to the venting functions as the
cooling system is also responsible for maintaining acceptable
temperatures in the venting system hardware.
The cooling system is made up of two functions. The
first is a temperature monitoring function. Based on the
temperature readings, the system will cool any part of the system
as required to maintain temperatures within
limits. Similarly, the pressure regulating system is
also comprised of two functions. The first is a pressure
monitoring system, and the second is a pressure relief system made
up of three independent venting functions. When
pressures become unstable and threatens to exceed limits, an
automatic set of pressure release valves is designed into the
architecture to relieve pressure. As a backup to the
primary system, an emergency system is available to release
pressure if the primary system fails to function or if the pressure
build up exceeds the capacity of the primary system. A
manual venting function is also available and is provided by a
human operator who may monitor and adjust system pressure
independently of the automated systems.
Beta Security System
In addition to safety concerns regarding accidental failures,
Beta plants have been targets of sabotage attempts by activists
seeking to influence the industry to avoid developing Beta plants
due to the potential effects of an accident. Sabotage
may be committed by company insiders or by outsiders, and Beta
plants protect against both. Insiders are deterred by an
internal security system that functions by requiring key cards and
employs a variety of surveillance devices. For outsiders
to successfully sabotage a plant, they must circumvent an external
security system that is activated any time the internal security
system is functioning. The external security system is
comprised of two redundant systems, either of which will preclude
external attacks if functioning. The first function is a
passive security system comprised of a network of fences, cameras,
and other physical barriers and deterrents. The second
function is an active security system whose function is allocated
to human guards and guard dogs.
A complete decomposition of the safety and security system is
provided in the form of functional flow block diagrams at the end
of this document.
Beta Plant Data
Occurrence of a chemical reaction in a Beta plant’s storage
tanks has occurred at other similar facilities at an average rate
of 3 events every twenty years, resulting in an annual probability
of about 15%. If an environmental incident should occur
at a Beta plant in the vicinity of University City, regardless of
its cause, it is estimated that the damage and injuries caused by
the airborne chemicals would cost $2 billion in damages due to the
harmful effects to property and injuries to the local
population.
This type of catastrophic outcome will occur if either the
safety or security system fails to prevent the accident or sabotage
event. System reliability data is provided in the table
below. For the safety system, data is conditioned on the
event of a chemical reaction. The security system is not
affected by the chemical reaction.
Table 2: Safety & Security System
Failure Probabilities
Alpha Plant Data
Sabotage attempts are not expected at an Alpha plant. The
process used at an Alpha plant does not require the use of a
catalyst, and the chemicals are relatively stable even in the
presence of contaminants. Because of this
characteristic, the possibility of a chemical reaction
occurring in chemical storage facilities is much lower than
that of a Beta plant, 0.003. However, if a reaction does
occur, an environmental incident is much more likely. If
no reaction occurs, the probability of an environmental incident is
0.0015, but if one does occur, the probability jumps to
0.05. If an environmental incident occurs at an Alpha
plant, regardless of cause, the expected cost for damage and repair
is $75 million.
Functional Flow and Decomposition
The following diagrams illustrate the functional flow of the
safety and security system at four levels of decomposition.
Figure 1: Level 1 Decomposition
Figure 2: Level 2 Decomposition
Figure 3: Level 3 Decomposition
Figure 4: Level 4 Decomposition
Assignment (30 points possible)