Cost-Benefit Analysis for Sprinkler - Article Example

COST-BENEFIT ANALYSIS OF A SPRINKLER STUDENT NAME INSTITUION NAME DATE OF SUBMISSION TUITOR NAME Cost-benefit analysis of a sprinkler Introduction Cost-benefit analysis of a sprinkler is concerned with the assessment of the functionalities and significance of sprinklers which are used in various homesteads and different places. This essay will be able to cover the two major parts of the analysis which are the determination of the cost of the of various sprinklers, maintenance, purchase, and repairs. The other analysis will be based on the gains or benefits which are accrued from the use of various sprinklers at performing various water dispensing. It is clear that the two major parts of this analysis will largely depend on one another since the cost of any machine has to consider the benefits that it is going to be gained (Thomas, et al., 2006). When a machine is being constructed, the cost of producing it will be based on the benefits of the machine in performing various activities that it is designed to do. The study that has put much consideration to the significance of sprinklers is the pilot analysis. There are a lot of estimates from data stored by the United Kingdom fire statistics which are very useful in assessing the benefits of the sprinklers. There are several types of sprinklers which are available in the market (Thomas, et al., 2006). They are classified based on their operation during fire breakouts. There are four main types of sprinklers as discussed below; Pre-action This is a kind of sprinkler system which is filled with water and air which are triggered by a fire signal. This system has smoke and fire detectors which send a signal to the circuits which operate an automated system which releases water and air to the building where the fire is detected. The system is triggered by two, the detectors and smoke alarm switches. The system is well suited for apartments which are not affected by false alarms which cause the sprinklers to release water in the absence of fire and hence destroying properties which are damageable by water. Deluge This type of sprinkler is similar to the pre-action or the automated sprinkler. The sprinklers have open nozzles which dispense water from large storage tanks and are used over a wide area such as industrial parks and big buildings. They detect the spread of flammable liquids and release water to prevent any fire break out. Dry pipe The dry pipe sprinklers are characterized by the nozzles which are connected to compressed air tanks and water. This is also triggered automatically by detectors and fire alarm switches. The compressed air is released before the water hence suitable for apartments which are used to store a large amount of properties like the warehouses. Wet pipe Wet pipe sprinklers are unique in that they always contain water in the pipes and are readily dispensable. This is usually installed in buildings and is easily operated during a fire outbreak. It is one of the most efficient sprinklers considering the cost and its maintenance. Sprinkler systems discussed above vary regarding installation, cost, effectiveness and operation. The automatic sprinkler system is normally cost effective since the dispensing water since they don’t require people who operate it. There are several unexpected events which occur during operation of sprinklers. The time taken for different systems to respond to fire breakout has not been accurately determined due to various factors which occur during fire breakout. It has been approximated to between 2.5 minutes to 17 minutes. The shorter the time taken to respond to the fire outbreak the more dangerous the fire. This is because the detectors can detect high hazards quicker than light hazards. In some systems, the fire breakout may not be able to activate the alarm hence slow response (Thomas, et al., 2006). According to Ramac, (2000), The effectiveness of the sprinkler is judged on its performance in reducing the amount of property that is damaged. In industries, the rate of damage reduction through the use of sprinklers has been cut by a factor of 2 in business buildings. In the textile industry, the damage rate is much lower, only 15 percent of goods are normally approximated to be damaged during major fire outbreak. Different research in the United States and the United Kingdom have indicated that buildings which do not have sprinklers experience losses up to 4.5 times that of the building installed with sprinklers. The National Fire Protection Association in the United States has been able to report a great reduction of losses associated with fire in buildings installed with sprinklers. The cost of installation also plays a key role in choosing the type of sprinkler and the size of the room to be installed. The equipment used in the supply determines the amount of internal water and depends on the following Pressure of water in the building The height of the building Sprinkler effectiveness Effects of fire on occurrence Sprinkler size When there is more equipment involved in the installation of the water supply system then, the cost will also increase. The number of sprinkler heads also affects the cost of installation of the supply system. However, there are several benefits of installing the water supply and sprinkler system. The premiums paid by the company is reduced when there are a water supply system and sprinklers installed in the company premises. This is because to the fact the company would be faced with minimal damages during an occurrence of fire. However, the company will also enjoy various grants and tax allowances. The government of United Kingdom gives tax offsets to companies which have properly developed their emergency response system like that of fire. They are given 25 percent grants on sprinkler system installed hence reducing the cost of installation. Residential sprinkler also plays a role in response to fire in various homesteads. When a home is installed with residential sprinklers, it can reduce the damages caused by fire outbreaks. When this are installed in the residence, there are a lot of benefits associated with it as the reduction of taxes and risks of property damage. Above all the owners of the residence will incur minimal losses from fire breakouts (Butry, et al., 2007). The domestic regulatory impacts assessment of sprinklers by the government of Wales has developed an easy way in which sprinklers are managed. The installation of sprinklers in various residential houses and flats to prevent the losses caused by the uncontrolled fire breakout. However, the analysis will fall short of data if the Pilot analysis is considered (Williams, et al., 2004). This due to the insufficient data available on the cost and benefits of various sprinklers. The solution to this is the use of the indirect analysis method which provides an easy way of determining the impact of various sprinklers. This study can determine the risk of injury, death, loss of property and other damages that are experienced during different fire breakouts. The size of the fire has a greater impact on the type of sprinkler to be used during fire breakout. The flats developed in the country of Wales have been installed with sprinklers as cited in Williams, et al., (2004). However, it is not all the flats that have been installed with sprinklers as per the assessment. The benefit of installation of sprinklers is seen to be low as compared to those in the houses. The flats have a small present value total cost of £ 10.8 million and total benefits of £12.4 million. This is very minimal indicating that most flats have not been installed with sprinklers, and yet they are mostly affected by fire accidents. However, it has been able to save 7.3 lives of residents and another 297 from injuries. This indicates that the value of lives saved is approximately £ 1.5 million with a net present value of £ 1.6 million. This indicates that the few installed fire systems are saving the lives of many people and their property as seen in the table. The case of NIST provides the measure of the economic growth expected when the fire sprinklers have been installed in various buildings and residential buildings. This can indicate clearly the benefits of investing in the installation of fire sprinklers. However, the reports which were released initially indicated that the installation of sprinklers was not cost-effective hence the small number of residential building that installed them in 1984. This report can provide more details on the analysis of sprinklers for the past 30 years. It has been able to raise $ 4994 to various residential building owners as shown in Table ES-1. From the analysis in the table, it is evident fatalities that could have costed $3725.57 is averted. The insurance averted is also a reasonable amount of $948.41. this leads to installation of 50 percent markup which translates to $2075.08 in a colonial, $1895.17 in Townhouse and $828.66 in a ranch. The J-value is a term which refers to the judgment value which is applied in the illustrating valuation of how fatality risk varies across various regulations and regimes. Examples of J-values that have been used are the following; Road and Rail: The Department for Transport The transport department estimates the required value of averted fatality in the road transport sector to be £ 1.22 million in 2003. The rail transport sector had the value of averted fatalities as £ 3.43 million. For the above cases, to obtain a J-value, there have to be the periods which the amount was spent and the period for the benefits. Assuming that the benefits are uniform over all the periods m years. Then the saving of one year is the reciprocal (1/m) lived that have been saved. The decrement in hazard per person is h(t) {1/(mN) y-1. According to Guarino, (1998), Assuming spend is annual, m =1. £1.22 million will be used annually to prevent the death of one person. Hence, a’pop will be £1.22/y. The loading is taken to be 40.9 x 109 passenger kilometer for 2003/2004. The average speed is taken as 80 km/h N= 58 500 (number of travelling people). Assuming that the population is distributed according to ages then the UK undiscounted life expectancy will be 41.9 y. The hazard rate reduction annually will be; 1/N = 1/58500 = 1.71 x 10-5 This will have an impact on the life expectancy ∆Xd = 0.02y. The gross domestic product in 2003 was £ 18 389 J = {(q / NG) * (Xd / ∆Xd)} a’pop = 0.143 / (53500 x 18389) (41.19 / 0.02) * 1.22 x 106 = 0.34 This indicates that the time rate of preference is 0 percent. Then the J value is multiplied by 2.8 to cater for the averted dead in railway. J = 0.95 When a time rate is included, preference will then become 2.5% y-1 which produces a J value of 0.49 in the case of transport through roads and 1.36 for averted deaths in railway. Health and Safety Executive: Offshore Oil Industry There is £6 million which was reserved for averting fatalities in an offshore oil exploration in 2003. The number of employees is 200 with age between 20 and 60. Hence, the J value will not be critical. The average life expectancy will then be 40.36, and the £6 is annually and is equal to a’pop which is used to save employees’ lives. The rate of hazard will be (1/200) = 0.005y-1 hence the life expectancy of 5.15y. From the above equation J = {(0.143/(200x18389) *(40.36/5.15)} x 6 x 106 = 1.82 The time preference rate of 2.5% annually will give a discounted reduction in life expectancy of 24.17y and a change of 2.32y. J = {(q / NG) * (Xd / ∆Xd)} a’pop = {(0.143/(200x18389) *(24.17/2.32)} x 6 x 106 = 2.43 When J-value it means that cost of everting deaths is increasing, and hence, the benefits accrued from the venture is minimal (Thomas, and Jones, 2010). When If J-value , it mean that the cost of averting deaths is reduced hence the benefits of the venture is increased. Bibliography Thomas, P.J., Stupples, D.W. and Alghaffar, M.A., 2006. The Extent of Regulatory Consensus on Health and Safety Expenditure: Part 2: Applying the J-Value Technique to Case Studies across Industries. Process safety and environmental protection, 84(5), pp.337-343. Williams, C., Fraser-Mitchell, J., Campbell, S. and Harrison, R., 2004. Effectiveness of sprinklers in residential premises. BRE report, 204505. Ramac Wilson, D.K., 2000. The Economics of Fire Protection. Fire Technology,36(2), p.131.handran, Ganapathy. The economics of fire protection. Routledge, 2002. Guarino, N., 1998. Formal ontology in information systems: Proceedings of the first international conference (FOIS'98), June 6-8, Trento, Italy (Vol. 46). IOS press. Thomas, P.J. and Jones, R.D., 2010. Extending the J-value framework for safety analysis to include the environmental costs of a large accident.Process Safety and Environmental Protection, 88(5), pp.297-317. Butry, D.T., Brown, M.H. and Fuller, S.K., 2007. Benefit-Cost Analysis of Residential Fire Sprinkler Systems. US Department of Commerce, National Institute of Standards and Technology. Appendix Read More