(An) analysis of cost allocation method in multi-purpose projects

Abstract

This thesis is concerned with the method of cost allocation which occurs in the multi-purpose projects such as cogeneration power plants and multi-purpose water projects. Among many allocation methods, the method which is widely used at the present time is the "Separable Costs - Remaining Benefits" method. In this thesis, the merits and demerits of separable costs - remaining benefits method are analyzed, and an alternative method of cost allocation is proposed. In order to determine the weights of factors which constitute the allocation base of proposed method, the eigenvector method is used. The method of separable costs - remaining benefits and proposed method are compared through the sensitivity tests. The results show that the proposed method is consistent and more effective to prevent the misallocations.