How to get the most out of (Vegetable) Waste Oil for your Small or Medium Business: CDA-ESM can help you to select the best option

How to get the most out of (Vegetable) Waste Oil for your Small or Medium Business: CDA-ESM can help you to select the best option

Jan 15th, 2010

Waste Oil for your Small or Medium Business

Reportedly, some fast food chains started (2007) to use their waste cooking oil to make biodiesel. In one example encompassing 1200 restaurants, the entire corporate truck fleet of 155 vehicles was converted to biodiesel, which means 6.1 million liters of waste oil put to use on the roads. Other sources reveal that McDonald’s trucks in Austria have been using biodiesel “for a few years.”

Waste Oil for your Small or Medium Business

Czech bramboráček bread being deep fried
photo: Chmee2

In order to show how Comparative Decision Analysis-Economic Safety Margin (CDA-ESM) can help in the selection of the best Vegetable Waste Oil management alternative, we consider as an example a restaurant, i.e. a commercial kitchen (for example an ”average sized” fast food restaurant, of roughly 150m2, or less than 500m3 construction volume) or any equivalent Medium Sized Business (MSB).

The MSB’s Management wants to find a better way to deal with their waste frying oils, but also wants to avoid the implementation of the filtering station necessary for an automotive use of its waste oils. Furthermore, the MSB does not have enough vehicles to make the fleet conversion economically feasible/reasonable.

Management is also fully aware that, reportedly, some large chains like Burger King and McDonald’s would like to use frying oil to heat water, but has heard they don’t have the space for a redundant system and fast-food restaurant personnel may not have the time nor the ability to operate a more complex burner system. However, Management has recently learned that there are off-the-shelf solution with burners capable of burning waste oils that are simple to use, can even accommodate several fuels, and, with some restrictions, can be inserted in existing furnaces, thus avoiding expensive replacements.

Management has therefore to decide whether they want to maintain the status quo, i.e. the presently active waste frying-oil management/disposal or to switch to a new installation which would include a burner capable of using those waste oils to generate useful heat. The new installation should not be redundant (no need for extra room) with the present one, and should either use the existing furnace with a new burner, or replace the old system with a brand new one.

This Paper shows how to set up the data necessary for the alternative selection using an innovative alternative evaluation methodology called CDA/ESM (Comparative Decision Analysis/Economic Safety Margin) (C.+F. Oboni, 2009). CDA/ESM brings to MSBs the opportunity to apply Risk Based Decision Making to the alternative selection process and to explore how two code compliant and perfectly legitimate alternatives may differ on the long term, not only in their costs, but also in their risk profile (upside and downside risks, i.e. opportunities and failures).

CDA/ESM eliminates the pitfalls of NPV (see below) and has been used at preliminary design level (Oboni and Oboni 2007, 2008; Oboni 1999-2000, 2005) to support decisions in many industries/situations by comparing alternatives in financial terms, including:
a) life’s cycle economic balance encompassing internal and external risks and
b) project implementation and demobilization costs and risks.

CDA/ESM has been successfully applied to date to industrial alternatives such as: rope v.s. road transportation, surface v.s. underground solutions, environmental rehabilitation projects, water treatments alternatives, transportation networks and go/no-go decisions.

CDA/ESM is particularly useful when comparing long term projects, as its “risks included” cumulative cost evaluation eliminates the “zeroing effect” and the “rosy scenario syndrome” linked to NPV.

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Category: Risk analysis, Risk management

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